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Check Before You Invest : Dynacons Systems & Solutions Ltd

BSE: 532365 NSE: DSSL ISIN: INE417B01040
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Dynacons Systems & Solutions Ltd belong to?
Dynacons Systems & Solutions Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Dynacons Systems & Solutions Ltd a good quality company?
Dynacons Systems & Solutions Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Dynacons Systems & Solutions Ltd undervalued or overvalued?
Dynacons Systems & Solutions Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 24.96 19.05
Price to Book 7.07 5.55
Price to Sales 1.55 0.89
EV to EBITDA 14.34 11.35
Q.4 Is Dynacons Systems & Solutions Ltd a good buy now?
Dynacons Systems & Solutions Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd revenue growth is 23.7% for FY-2025, which is below its 5-year CAGR of 31.03%, indicating slower growth.

Q.2 Gross Profit margin of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.8% for FY-2025, which is above its 5-year median of 5.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.31% for FY-2025, which is above its 5-year median of 6.79% indicating increasing margins.

Q.4 Net Profit Margin of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Net Profit Margin is 5.72% for FY-2025, is above its 5-year median of 4.15%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 7.8 5.7
Operating Profit Margin (%) 8.31 6.79
Net Profit Margin (%) 5.72 4.15

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Return on Asset is 10.65%, which is above its 5-year historical median of 9.53%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Return on capital employed is 46.57% for FY-2025, which is above its 5-year historical median of 37.06%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Return on equity is 37.5% for FY-2025, which is in line with its 5-year historical median of 37.5%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Cash conversion cycle is -2734 days, below its 5-year historical median of -1778 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.86 2.3
ROE (%) 37.5 37.5
ROCE (%) 46.57 37.06
Cash Conversion Cycle -2734 days -1778 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Debt-to-Equity ratio is 0.23, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Dynacons Systems & Solutions Ltd?
Dynacons Systems & Solutions Ltd Debt to cash flow from operations is 0.81, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Dynacons Systems & Solutions Ltd?

Q.1 Promoter shareholding and pledge status of Dynacons Systems & Solutions Ltd?
Promoters hold 60.89% of the Dynacons Systems & Solutions Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Dynacons Systems & Solutions Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Dynacons Systems & Solutions Ltd vs industry peers?
Dynacons Systems & Solutions Ltd revenue CAGR is 31.03%, compared to the industry median CAGR of 2.48%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 23.7 2.5
Gross Profit Growth (%) 33.8 18.3
Operating Profit Growth (%) 34.6 18
Net Profit Growth (%) 33.3 22
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.86 0.46
ROE (%) 37.5 3.97
ROCE (%) 46.57 6.41
Cash Conversion Cycle (days) -2734.15 36

Valuation & price assessment

Q.1 Stock return of Dynacons Systems & Solutions Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 62.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
62.7% 74% 67.3% 45.6%
Q.2 Valuation ratios of Dynacons Systems & Solutions Ltd vs historical?
The current P/E ratio of 24.96 is higher than its historical median of 19.05, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 24.96 19.05 47.38
Price to Book 7.07 5.55 2.64
Price to Sales 1.55 0.89 4.79
EV to EBITDA 14.34 11.35 16.75

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