1. At a Glance
Dynamatic Technologies Ltd (DTL) is a rare beast: it makes parts for both tractors and aircrafts. But with a P/E of 115, sluggish sales growth, and a ROE of just 6.2%, investors are asking—does this jet have enough fuel or is it just taxiing on the runway?
2. Introduction with Hook
Imagine a company that makes tractor hydraulic gear pumps and Airbus doors under the same roof. That’s like a chaiwala also running a Michelin-star kitchen.
- Global market share: 38% in tractor gear pumps
- Aerospace clients: Airbus, Dassault, Deutsche Aircraft
- FY25 PAT: ₹43 Cr on ₹1,404 Cr revenue
- P/E: 115 | ROCE: 8.8%
The biz model is part Mahindra, part Lockheed Martin. But are investors just romanticizing “Make in India”?
3. Business Model (WTF Do They Even Do?)
Dynamatic operates in three main verticals:
- Hydraulics: Gear pumps for tractors and construction equipment (India & global leader)
- Automotive: Turbochargers, engine brackets for OEMs
- Aerospace & Defence: Aircraft doors, fuselage, escape hatches for Airbus, Boeing, and Indian MoD
Facilities in India, Germany, and the UK. Customers on 6 continents. Sounds baller, but margin discipline? Not so much.
4. Financials Overview
| Metric | FY25 |
|---|---|
| Sales | ₹1,404 Cr |
| Operating Profit | ₹158 Cr |
| OPM | 11% |
| Net Profit | ₹43 Cr |
| ROCE | 8.8% |
| ROE | 6.21% |
| Debt | ₹571 Cr |
| Interest Cost | ₹57 Cr |
| EPS | ₹67.87 |
| P/E | 115 |
Key Insight:
You’re paying 115x for a 6% ROE company with high debt and lumpy margins. Love the story, not the math.
5. Valuation
Let’s play Captain Valuator:
- Market Cap: ₹4,930 Cr
- TTM PAT: ₹43 Cr
- Book Value: ₹1,131 → P/B ~6.42x
- ROE: 6.2%
- Free Cash Flow: Positive, but not explosive
Fair Value Range: ₹3,200 – ₹4,200
Assuming normalized P/E of 50–65 for a defence/aerospace play with erratic margins.
Overvalued for now unless there’s a hockey-stick moment in defence revenues or a mega Airbus contract explosion.
6. What’s Cooking – News, Triggers, Drama
Recent Highlights:
- Airbus A220 components contracts awarded
- Dassault Falcon 6X deal signed
- Deutsche Aircraft fuselage production kicked off
- Inauguration of D328eco rear fuselage line in Bengaluru
Rating Upgrade:
India Ratings recently moved it to ‘IND A’. Translation: “We don’t hate your debt anymore.”
Trigger to Watch:
Actual topline from aerospace/defence scaling up and offsetting auto/hydraulics cyclicality.
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | ₹7 Cr |
| Reserves | ₹711 Cr |
| Borrowings | ₹571 Cr |
| Other Liabilities | ₹362 Cr |
| Total Assets | ₹1,650 Cr |
| Fixed Assets | ₹812 Cr |
| CWIP | ₹18 Cr |
| Other Assets | ₹820 Cr |
Key Observations:
- Debt is still high.
- Fixed asset base doubled from FY22
- Aerospace infra buildout visible, but now it must deliver returns.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹131 Cr | ₹-83 Cr | ₹72 Cr | ₹121 Cr |
| FY24 | ₹97 Cr | ₹47 Cr | ₹-231 Cr | ₹-87 Cr |
| FY25 | ₹144 Cr | ₹-67 Cr | ₹-96 Cr | ₹-19 Cr |
Takeaway:
Ops cash is stable. Financing outflows show debt servicing and possible cleanup. Investment cash flows—hello, aerospace Capex.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 10% | 10% | 8.8% |
| ROE | 6.2% | 6.6% | 6.2% |
| Interest Cover | 2.1x | 2.2x | 2.1x |
| Debt/Equity | 1.2x | 0.9x | 0.8x |
| CCC (days) | 112 | 142 | 140 |
Analysis:
No bankruptcy threat. But no financial fireworks either. Interest coverage is just safe. Cash conversion cycle needs yoga.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT | EPS | OPM |
|---|---|---|---|---|---|
| FY23 | ₹1,316 Cr | ₹184 Cr | ₹43 Cr | ₹67.48 | 14% |
| FY24 | ₹1,429 Cr | ₹162 Cr | ₹122 Cr | ₹192.09 | 11% |
| FY25 | ₹1,404 Cr | ₹158 Cr | ₹43 Cr | ₹67.87 | 11% |
Reality Check:
FY24 was an outlier due to ₹105 Cr other income. FY25 = back to grind.
11. Peer Comparison
| Company | P/E | ROCE | ROE | Sales (Cr) | PAT (Cr) | OPM | P/B |
|---|---|---|---|---|---|---|---|
| Dynamatic | 115 | 8.8% | 6.2% | ₹1,404 | ₹43 | 11% | 6.4x |
| Jyoti CNC | 72 | 24% | 21% | ₹1,818 | ₹109 | 27% | 13.7x |
| Kaynes Tech | 134 | 14% | 11% | ₹2,722 | ₹293 | 15% | 13.1x |
| LMW | 166 | 4.5% | 3% | ₹3,033 | ₹104 | 4.6% | 6.2x |
| Tega Industries | 64 | 17.7% | 15.5% | ₹1,639 | ₹200 | 20.7% | 9.2x |
Verdict:
DTL has worse margins, lower ROE, and still trades at a premium. Market is betting on future aerospace payoff.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 41.87% |
| FIIs | 13.29% |
| DIIs | 13.53% |
| Public | 31.32% |
| Total Shareholders | 18,737 |
Trend:
- FII & DII holding increasing = confidence
- Promoters diluted from 44.8% to 41.8%
- Retail holding stable — some sticky hands here
13. EduInvesting Verdict™
Dynamatic is that underdog from Bengaluru building doors for Airbus and escape hatches for Dassault. It’s a rare defence + aerospace + tractor hydraulics play with global reach.
But here’s the truth bomb:
- Revenue is flat
- Margins are okay, not amazing
- Debt is sticky
- Stock is priced like it’s already the next HAL
Until aerospace scale-up kicks into overdrive, this stock’s valuation feels like a pre-launch satellite—expensive, fragile, and not fully operational.
TL;DR: Cool biz. Hot stock. Lukewarm financials.
Metadata
Written by EduInvesting Analyst | 18 July 2025
Tags: Dynamatic Technologies, Aerospace Manufacturing, Tractor Hydraulics, Defence Stocks, EduInvesting Premium Research
