1. At a Glance
While the big IT boys write AI whitepapers and attend Davos, Dynacons is quietly bagging ₹100+ crore IT infra contracts from SBI, Bank of Baroda, Union Bank, LIC, PNB, and even the e-Passport project. Its stock has delivered a 5-year profit CAGR of nearly 64%, ROE in the late 30s, and a cash conversion cycle of just 15 days — a rarity in Indian IT. But the market still values it at a P/E of 16.9, because small-cap IT isn’t sexy enough until it triples.
2. Introduction
Dynacons Systems & Solutions (DSSL) is like the Swiss Army knife of IT infra — they design, supply, integrate, manage, and babysit every piece of tech hardware and software a client could need.
Incorporated in 1995, the company has evolved from a reseller to aturnkey system integrator, with solutions covering data centres, networks, cloud, cyber security, and managed services. In FY24–25, it’s been raining contracts — from a ₹101 crore SD-WAN rollout for Bank of Baroda to ₹116 crore private cloud for Union Bank, to ₹106 crore PKI & IT infra for the e-Passport project.
It has deep PSU and BFSI penetration, but also courts global names like H&M and McAfee. Unlike most small-cap ITs, DSSL plays in capex-heavy, execution-led projects — making it a rare IT business where operating leverage actually matters.
3. Business Model (WTF Do They Even Do?)
Core Segment:System Integration & Services (100% revenue)
Service Lines:
- Infra Design & Consulting– Data centre and network architecture.
- Turnkey Integration– Large network & DC infra with hardware/software supply.
- Facilities Management– Onsite & remote IT infra maintenance.
- Application Development & Maintenance– For custom client needs.
- Managed Services– Print, cloud, breakfix, and infra ops.
- Cybersecurity Projects– Including smart city SOCs.
Vendor Tie-ups:IBM, Cisco, HPE, Lenovo, Apple, etc.
Client Spread:PSUs (LIC, NPCI, SBI, BoB), BFSI (Axis Finance,
PNB), global corporates (H&M, McAfee), pharma (Pfizer).
Geography:96% domestic revenue, ~4% exports (FY22).
4. Financials Overview
| Metric | Latest Qtr (Jun’25) | YoY Qtr (Jun’24) | Prev Qtr (Mar’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 329 | 321 | 331 | 2.49% | -0.60% |
| EBITDA (₹ Cr) | 32 | 25 | 29 | 28.0% | 10.3% |
| PAT (₹ Cr) | 20 | 18 | 18 | 11.1% | 11.1% |
| EPS (₹) | 15.41 | 13.91 | 14.28 | 10.8% | 7.9% |
Commentary:
- Margins have been trending up — OPM hit 10% this quarter (vs 8% a year ago).
- PAT growth outpacing revenue shows cost discipline and better project mix.
- Flat top line QoQ likely due to staggered execution cycles on large PSU orders.
5. Valuation (Fair Value RANGE only)
Method 1: P/E Multiple
- EPS (TTM): ₹58.45
- Apply sector range for mid/small IT services: 18x–22x
- FV Range: ₹1,052 – ₹1,286
Method 2: EV/EBITDA
- EBITDA (TTM): ₹115 Cr
- Net Debt: ~₹117 Cr (Borrowings – Cash)
- EV/EBITDA: 10x–12x → EV: ₹1,150 – ₹1,380 Cr
- Per share FV: ₹905 – ₹1,085
Method 3: Simplified DCF
- Assuming FCF growth at 18% for 5 years, terminal growth 4%, discount 13% → ₹1,050 – ₹1,200
Educational FV Range:₹1,050 – ₹1,200This FV range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
- Mega Orders:
