Fundamental Analysis of DRC System India
Fundamental Analysis of DRC System India: As information technology advances, humans are able to work more efficiently. The use of technology across industries has helped companies maintain quality standards by keeping costs low and increasing customer satisfaction.
Technological evolution continues to be a growing field, and artificial intelligence has recently taken center stage in automating repetitive tasks. In this article, we will take a look at DRC Systems India, which is active in the IT sector.
Fundamental Analysis of DRC Systems India – Company Overview
DRC system It started in 2012. We have over 300 employees and offices across three locations. The headquarters is located at GIFT City, Gandhinagar. The company offers a wide range of IT solutions, including digital marketing services, AI and automation, website development, cloud-based services, enterprise solutions, mobile app development, and more.
Rather than providing one-off solutions, DRC Systems leverages its technology with partners to serve customers across a variety of industries. Our clients include corporates like IIMB, University of Hyderabad, Happiest Minds, Wipro, GMR Airports, government agencies, international brands, industry leaders and startups.
Unmerge:
DRC Systems was spun off from listed company Infibeam Avenues in 2020 following permission from NCLT. Another company, Suvidhaa Infoserve, was demerged with DRC to unlock the value of Infibeam. The DRC system issued and allocated 1 DRC share for every 412 shares of Infibeam Avenues.
take over:
In December 2022, DRC Systems acquired a 23.34% stake in Nexenders and became an affiliate of the company. However, in March 2023, the company sold a 5% stake in Nexenders and lost its affiliated company status. Finally, in July 2023, the company acquired the entire interest of DRC Systems USA LLC, making it a wholly-owned subsidiary.
segment analysis:
DRC Systems’ revenue from operations in FY23 is recognized under a single segment: Software Development, Maintenance and Other Ancillary Services. Sales by region in FY23 were 50.71% domestic (up 26.13% YoY) and 49.28% overseas (up 37.30% YoY).
Industry Overview:
The world is witnessing technological change, and India is poised to grow its IT sector to account for around 10% of its overall GDP by 2025, and India’s technology industry has the potential to increase its income to $500 billion by 2030. . Electronics and information technology in India is expected to have 60-65 million jobs requiring digital skills by 2025-26.
India’s digital economy is expected to grow to $1 trillion by 2025. These growth factors are critical for companies to understand and leverage competition to provide cost-effective, high-quality products to their customers. Now that we have come across the company overview and fundamental analysis of DRC Systems India.
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Fundamental Analysis of DRC System India – Finance
Disclaimer: Consolidated figures are provided for FY23, standalone figures are provided for FY20, FY21 and FY22.
Revenue and Net Profit:
The company’s operating revenue for fiscal 2023 is Rs. 21.81 crore compared to Rs. It increased by 11.84% to $19.5 billion in FY22. Net profit recorded 160 million won. 4.20 crore in FY23 compared to Rs. In fiscal 22, it increased 500% to $770 million. Other profits recorded 3.3 billion won, an increase of 1,177.60% compared to the same period last year. 4.22 crore due to fair value gain on investments.
On a consolidated basis, operating revenue and net profit recorded 500 billion won. 25.62 crore and Rs. 6.69 billion each in FY23.
profit:
In FY23, DRC Systems OPM increased to 34.70% from 20.60% in FY22. NPM in FY23 stood at 22.42% in FY22 and 3.55% in FY22. Both indicators show an increase in margins. However, the increase in NPM may also be due to an increase in other profits. We need a few more years to understand margin expansion.
On a consolidated basis, FY23 operating profit margin and NPM were 33.78% and 26.10%, respectively.
return margin:
DRC system RoE increased from 18.88% in FY22 to 25.60% in FY23. RoCE increased from 5.58% in FY22 to 24.46% in FY23. This increase is due to improved profitability. A RoE of over 20% is considered acceptable in any industry.
FY23 consolidated RoE and RoCE stood at 32.59% and 30.19%, respectively.
debt analysis:
DRC Systems’ Debt to Equity in FY23 was 0 and in FY22 it was 2.23. Interest coverage in FY23 was 9.98x compared to 16.13x in FY22. The company has no debt and its interest coverage ratio has decreased slightly in FY23 as its interest expense has increased to Rs. 0.07 billion to 0.62 billion. However, an interest coverage ratio of 1.5x or more is considered comfortable.
As of FY23, our consolidated D/E ratio is 0.37 and interest coverage ratio is 13.73x.
DRC System India Fundamental Analysis – Key Indicators
List of key indicators of the DRC system
Fundamental Analysis of DRC System India – Future Plans
- EMEA-LLC FZ, a wholly owned subsidiary of DRC Systems, has entered into a joint venture agreement with EZMS LLC FZ, a UAE-based company, to form a joint venture company. Holding a 50% stake, they aim to cooperate with UAE government agencies and companies.
- As part of its long-term growth strategy, the company plans to expand its product and solution offerings in areas such as artificial intelligence, machine learning, and blockchain technology.
- DRC plans to expand its presence by participating in several brand awareness programs to meet global business demands.
- They expect demand from both domestic and foreign companies to remain steady in the future.
Read more: Kaynes Technology and Syrma SGS Technology
conclusion
In conclusion, we looked at the Fundamental Analysis of DRC Systems India, which belongs to the IT field. In recent years, DRC Systems has spun off from Infibeam Street. The company is in a growth phase. DRC has been improving its financial position and will need a deeper understanding of its growth going forward.
What do you think about the company? Let us know in the comments section below.
Written by Santosh
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