DCM Limited , a diversified company with interests in IT services, real estate, and engineering, has announced a strategic move to resolve a long-standing VAT litigation with Punjab authorities. The company's Board of Directors has approved settling the dispute under a one-time settlement scheme, demonstrating a proactive approach to managing its legal and financial obligations.

Key Details of the Settlement

The dispute, which involves claims totaling Rs. 811.67 lakh, centers around the disallowance of Entry Tax credit on High Speed Diesel (HSD) by the Assistant Commissioner of Sales Tax, Ropar. Under the settlement scheme recently notified by the Punjab Government, DCM Limited will pay:

The settlement amount represents 50% of the basic tax amount, covering all claims including basic tax, penalties, and interest.

Rationale Behind the Decision

Despite legal advice suggesting that the company had a strong case, DCM Limited's management has chosen to settle. This decision appears to be driven by several factors:

1. Risk Mitigation: The settlement eliminates the potential for extended litigation.
2. Financial Prudence: It caps the company's liability, preventing ongoing interest and penalty accumulations.
3. Resource Allocation: Resolving this issue allows the company to focus on core business activities rather than legal disputes.

Implications for DCM Limited

This settlement may have several implications for DCM Limited:

1. Improved Financial Clarity: By resolving this contingent liability, the company provides clearer financial statements to investors and stakeholders.
2. Cash Flow Management: The relatively small additional payment required (Rs. 19.23 lakh) suggests minimal impact on the company's immediate cash flow.
3. Governance Signal: The decision to settle, despite having a potentially strong legal position, may be viewed as a sign of prudent management focused on business operations rather than prolonged legal battles.

Broader Context

This settlement comes at a time when DCM Limited is navigating several challenges, including:

• Ongoing industrial unrest at its engineering business undertaking, where a lockout has been in effect since October 22, 2019.
• Recent complications with a Joint Development Agreement for its land in Hisar, Haryana, where a development license has been suspended.

In light of these challenges, the VAT dispute settlement may represent a strategic move to reduce uncertainties and focus on core business issues.

Conclusion

DCM Limited's decision to settle its VAT dispute with Punjab authorities reflects a pragmatic approach to resolving legacy issues. While the company may have had legal grounds to contest the claims, the choice to settle suggests a focus on forward-looking business strategies rather than protracted legal battles. As the company continues to navigate various operational and developmental challenges, this resolution may provide some much-needed clarity and stability in its financial outlook.

DCM Limited , a diversified company with interests in IT services and grey iron casting, has reported a consolidated profit of Rs 145.00 lakh for the quarter ended September 30, 2025, compared to Rs 71.00 lakh in the same quarter last year. The company's performance shows resilience despite ongoing challenges in its engineering division and real estate operations.

Key Financial Highlights

• Revenue from operations remained stable at Rs 1,762.00 lakh versus Rs 1,663.00 lakh in the previous year.
• Other income increased to Rs 116.00 lakh from Rs 51.00 lakh in the corresponding quarter.
• The IT Services segment continued to be the primary revenue driver, contributing Rs 1,750.00 lakh to the total revenue.

Segment Performance

The IT Services segment showed strong performance, while the Grey Iron Casting segment continued to face challenges.

Ongoing Challenges

Engineering Division Lockout

The company's engineering business undertaking remains under lockout since October 22, 2019. DCM has not made provisions for wages during the lockout period, which amount to Rs 7,719.00 lakh as of September 30, 2025.

Real Estate Project Complications

DCM is facing issues with its Hisar land development project. The development license (No. 179 of 2022) for the 67.275-acre project has been suspended by the Director General, Town and Country Planning, Haryana.

Joint Development Agreement (JDA) Termination

On November 1, 2025, DCM issued a notice of forfeiture and termination of the JDA with GCD Prime (Developer) due to the developer's failure to obtain revocation of the license suspension.

Financial Position

• The company's current liabilities, including an advance of Rs 5,000.00 lakh under the JDA, exceed current assets by Rs 745.00 lakh as of September 30, 2025.
• Despite these challenges, management believes the company can continue operations by focusing on real estate operations and restructuring its Engineering Business Undertaking.

Future Outlook

DCM Limited is at a critical juncture, facing significant challenges in its engineering and real estate segments. The company's ability to resolve the ongoing issues with its Hisar land development project and the engineering division lockout will be crucial for its future performance. The IT Services segment remains a bright spot, providing stability to the company's overall operations.

Investors and stakeholders will be closely watching how DCM navigates these challenges and implements its strategies to improve liquidity and operational performance in the coming quarters.