DynamaticTech BUY Emkay 01.06.17

Dynamatic Technologies
India Equity Research | Engineering & Capital Goods

May 31, 2017
Result Update Emkay
Your success is our success
©
Refer to important disclosures at the end of this report

CMP Target Price
Muted performance Rs 2,606

as of (5/31/2017)
Rs 3,396 ()
12 months
Rating Upside
BUY () 30.3 %
Change in Estimates
 Dynamatic Technologies (DYTC) operational performance was below our expectations.
Revenues declined by 2.5% YoY. EBIDTAM declined by 330bps YoY and APAT declined EPS Chg FY18E/FY19E (%) (13.7)/NA
by 86% YoY. Target Price change (%) (4.1)
 While revenues in the hydraulics and aerospace segments increased by 3% and 15% YoY, Target Period (Months) 12
it declined by 10% YoY in the automotive segment mainly impacted by lower utilisations Previous Reco ACCUMULATE
and demonetisation linked declining sales. Emkay vs Consensus
 DYTC has received incremental orders in its automotive segment and deliveries have EPS Estimates
commenced from Q1FY18. With increasing utilization levels, management expects the FY18E FY19E
India automotive segment to break even in FY18. Emkay 95.7 148.7
 While we retain FY19E EPS, we have downgraded FY18E EPS by 13.7% to factor the Consensus 104.6 147.7
likely retrenchment cost associated with the rationalization of workforce in the Chennai Mean Consensus TP (12M) Rs 3,334
units. We recommend BUY with SoTP based target price of Rs3,396. Stock Details
Bloomberg Code DYTC IN
 Declining auto sales weighing down performance: DYTC reported revenues of
Face Value (Rs) 10
Rs3.8bn (-3% YoY) below our estimates of Rs5bn. Revenues in the aerospace segment
Shares outstanding (mn) 6
increased by 15% YoY to Rs902mn as deliveries for the new projects gain traction – India
revenues increased by 25% YoY to Rs653mn while UK revenues declined by 5% YoY to 52 Week H/L 3,656 / 2,300
Rs250mn. EBITM in the aerospace segment declined by 990bps to 23.3% as higher M Cap (Rs bn/USD bn) 17 / 0.26
proportion of Airbus phase II orders (raw materials billed in DYTC) were executed during Daily Avg Volume (nos.) 2,278
the quarter. Revenues in the hydraulic segment increased by 3% YoY to Rs700mn – India Daily Avg Turnover (US$ mn) 0.1
revenues increased by 13% YoY to Rs486mn while the UK revenues declined by 15% YoY
to Rs214mn. EBITM in the hydraulic segment improved by 40bps to 13.3%. Revenues in Shareholding Pattern Mar '17
the automotive segment declined by 10% YoY to Rs2bn impacted by demonetisation linked Promoters 50.2%
declining sales and lower deliveries to Volkswagen – standalone revenues declined by FIIs 14.7%
14% YoY to Rs188mn while the subsidiaries reported 9% YoY decline to Rs2bn. APAT at DIIs 13.2%
consolidated level was impacted by one-time expense of Rs101mn related to the
Public and Others 22.0%
foreclosure of high cost borrowings.
Price Performance
 Recommend BUY: Order book in the aerospace segment stands at over Rs60bn to be
executed over next ten years. Revenues in the aerospace segments is likely to ramp up (%) 1M 3M 6M 12M
to Rs6bn in FY20 (existing Rs3.5bn) as execution gains traction at the new aerospace Absolute (3) (10) (13) 4
facility in Bengaluru. In the automotive segment, DYTC has received incremental orders Rel. to Nifty (7) (17) (25) (11)
from Honda, Turbo Energy, Haldex, Ford, Daimler Benz etc., The Company is in the Relative price chart
process of rationalizing the workforce in its Chennai foundry and machining units and is 3375 Rs % 30
expected to incur Rs100mn as retrenchment cost. Going forward, management expects

3180 20
margin expansions in the German foundry, while the India foundry and machining
2985 10
operations are expected to break even in FY18. We recommend BUY on the stock with
SoTP based target price of Rs3,396. 2790 0
2595 -10
Financial Snapshot (Consolidated)

2400 -20
Jun-16 Aug-16 Oct-16 Dec-16 Jan-17 Mar-17 May-17
(Rs mn) FY15 FY16 FY17 FY18E FY19E
Dynamatic Technologies (LHS)
Net Sales 16,292 14,938 15,078 17,051 19,245 Source: Bloomberg

EBITDA 1,514 1,411 1,653 2,086 2,570
This report is solely produced by Emkay Global. The
EBITDA Margin (%) 9.3 9.4 11.0 12.2 13.4 following person(s) are responsible for the
production of the recommendation:
APAT 96 123 247 607 943
EPS (Rs) 15.1 19.4 39.0 95.7 148.7
John Perinchery
EPS (% chg) 142.6 28.6 101.3 145.4 55.4 john.perinchery@emkayglobal.com
ROE (%) 4.8 4.9 10.0 22.4 27.2 +91 22 66121374
P/E (x) 173.0 134.5 66.8 27.2 17.5 Amruta Deherkar
EV/EBITDA (x) 13.8 15.5 13.3 10.1 7.9 amruta.deherkar@emkayglobal.com
P/BV (x) 6.7 6.5 6.8 5.5 4.2 +91 22 66121262
Source: Company, Emkay Research
Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES.
Dynamatic Technologies (DYTC IN) India Equity Research | Result Update
Exhibit 1: Actual Vs. Emkay

Estimate % variation
(Rs mn) Actual Comments
Emkay Consensus Emkay Consensus
Sales 3,783 5,008 4,325 (24.5) (12.5) Lower sales in aerospace and automotive segments
EBITDA 388 403 403 (3.7) (3.7) Higher margins in hydraulic segment
EBITDA, margin (%) 10.3 8.0 9.3 220 bps 90 bps
Lower other income and one time cost related to
PAT (75) (12) (2) 521.7 3,630.0
foreclosure of borrowings.
Exhibit 2: Quarterly Financials - Consolidated

Rs mn Q4FY16 Q3FY17 Q4FY17 YoY (%) QoQ (%) YTD'17 YTD'16 Gr (%)
Revenue 3,878 3,520 3,783 (2.5) 7.5 15,068 14,938 0.9
Expenditure 3,351 3,184 3,395 1.3 6.6 13,424 13,527 (0.8)
Consumption of RM 2,089 1,997 2,129 1.9 6.6 8,380 8,336 0.5
as % of sales 53.9 56.7 56.3 55.6 55.8
Employee Cost 559 572 588 5.2 2.8 2,300 2,192 4.9
as % of sales 14.4 16.3 15.6 15.3 14.7
Other expenditure 703 615 677 (3.6) 10.2 2,744 2,999 (8.5)
as % of sales 18.1 17.5 17.9 18.2 20.1
EBITDA 528 335 388 (26.4) 15.7 1,644 1,411 16.5
Depreciation 138 133 151 9.9 13.5 544 524 3.7
EBIT 390 202 237 (39.3) 17.1 1,100 886 24.1
Other Income 28 11 11 (59.9) (0.9) 69 50 38.2
Interest 177 177 195 10.2 9.8 741 727 1.9
PBT 241 36 53 (78.0) 47.5 428 209 104.8
Total Tax 49 24 27 (46.0) 9.5 181 86 109.9
Adjusted PAT 192 12 27 (86.2) 125.4 247 123 101.2
Extra ord / Exceptional item - - (101) - - (101) - -
Reported PAT 192 12 (75) - - 146 123 18.8
Adjusted EPS (Rs) 30.3 1.9 4.2 (86.2) 125.4 34.8 (10.9) (417.9)
Margins (%) (bps) (bps) (bps)

EBIDTA 13.6 9.5 10.3 (330) 70 10.9 9.4 150
EBIT 10.1 5.7 6.3 (380) 50 7.3 5.9 140
EBT 6.2 1.0 1.4 (480) 40 2.8 1.4 140
PAT 5.0 0.3 (2.0) (690) (230) 1.0 0.8 10
Effective Tax rate 20.3 67.2 49.9 2,960 (1,730) 42.2 41.2 100
May 31, 2017 2

Exhibit 3: Segmental Performance - Consolidated

Segment Revenues
Hydraulics 683 695 700 2.5 0.7 2,768 2,613 5.9
Aerospace 783 874 902 15.3 3.3 3,447 2,698 27.8
Automotive 2,405 1,947 2,176 (9.5) 11.8 8,839 9,605 (8.0)
Others 7 4 4 (49.2) (2.6) 13 21 (39.1)
Total 3,878 3,520 3,783 (2.5) 7.5 15,068 14,938 0.9
Segment Results
Hydraulics 88 72 93 5.8 28.6 308 236 30.6
Aerospace 260 254 210 (19.2) (17.2) 934 666 40.4
Automotive 92 (72) 10 (89.0) - 18 109 (83.6)
Others (50) (52) (77) 54.0 47.5 (160) (124) 29.6
Total 390 202 237 (39.3) 17.1 1,100 886 24.1
Other Income 28 11 11 (59.9) (0.9) 69 50 38.2
Less- Interest Exp 177 177 195 10.2 9.8 741 727 1.9
PBT 241 36 53 (78.0) 47.5 290 109 165.7
Segment Capital employed
Hydraulics 789 847 1,359 72.2 60.4 1,359 789 72.2
Aerospace 2,970 3,501 3,626 22.1 3.6 3,626 2,970 22.1
Automotive 2,095 2,351 3,430 63.7 45.9 3,430 2,095 63.7
Others 504 514 114 (77.3) (77.7) 114 504 (77.3)
Unallocated 216 (71) (1,379) - - (1,379) 216 -
Total 6,574 7,141 7,150 8.8 0.1 7,150 6,574 8.8
Segment Margins (%) (bps) (bps) (bps)

Hydraulics 12.9 10.4 13.3 40.0 290.0 11.1 9.0 210.0
Aerospace 33.2 29.0 23.3 (990.0) (570.0) 27.1 24.7 240.0
Automotive 3.8 (3.7) 0.5 (330.0) - 0.2 1.1 (90.0)
Average 10.1 5.7 6.3 (380.0) 50.0 7.3 5.9 140
May 31, 2017 3

Exhibit 4: Quarterly Performance - Standalone

Revenue 1,209 1,284 1,360 12.5 5.9 5,054 4,314 17.2
Expenditure 910 1,069 1,148 26.1 7.4 4,078 3,571 14.2
Consumption of RM 507 609 682 34.6 12.0 2,294 1,860 23.3
as % of sales 42 47 50 15 12
Employee Cost 160 176 174 8.4 (1.3) 675 602 12.1
as % of sales 13 14 13 4 4
Other expenditure 243 284 292 20.2 2.7 1,110 1,109 0.1
as % of sales 20 22 21 7 7
EBITDA 299 215 212 (29.0) (1.3) 976 743 31.4
Depreciation 75 77 87 16.5 12.5 311 291 7.0
EBIT 224 138 125 (44.2) (9.1) 665 452 47.1
Other Income 12 38 38 230.4 - 120 40 198.0
Interest 117 144 164 40.7 14.0 571 516 10.6
PBT 119 32 (1) - - 213 (24) -
Total Tax 4 6 (8) - - 59 (37) -
Adjusted PAT 115 26 7 (94.2) (74.1) 155 13 1,095.5
Reported PAT 115 26 (72) - - 76 13 486.3
Adjusted EPS (Rs) 18.1 4.1 1.1 (94.2) (74.1) 24 2 1,095.5

EBIDTA 24.7 16.7 15.6 (910) (110) 19.3 17.2 210
EBIT 18.6 10.7 9.2 (930) (150) 13.2 10.5 270
EBT 9.9 2.5 (0.1) - - 4.2 (0.6) -
PAT 9.5 2.0 (5.3) - - 1.5 0.3 120
Effective Tax rate 3.6 18.8 - - - 27.5 - -
May 31, 2017 4

Exhibit 5: Segmental Performance - Standalone

Segment Revenues
Hydraulics 431 503 486 12.9 (3.3) 1,918 1,667 15.1
Aerospace 521 581 653 25.2 12.4 2,265 1,475 53.6
Automotive 218 167 188 (13.8) 12.9 740 1,029 (28.1)
Other 39 33 33 131 143 (8.6)
Total 1,209 1,284 1,360 12.5 5.9 5,054 4,314 17.2
Segment Results
Hydraulics 61 64 76 24.5 18.3 273 224 21.8
Aerospace 236 165 173 (26.8) 4.4 716 525 36.4
Automotive (60) (72) (85) - - (246) (247) -
Other (13) (20) (39) - - (78) (50) -
Total 224 138 125 (44.2) (9.1) 665 452 47.1
net of unallocable income (12) (38) (38) - - (120) (40) -
Interest 117 144 164 40.7 14.0 571 516 10.6
PBT 119 32 (1) - - 213 (24) -
Hydraulics 643 687 745 15.9 8.5 745 643 15.9
Aerospace 2,148 2,690 2,803 30.5 4.2 2,803 2,148 30.5
Automotive 968 777 1,162 20.0 49.5 1,162 968 20.0
Others 436 477 139 (68.1) (70.9) 139 436
Unallocated 712 1,790 1,720 141.6 (3.9) 1,720 712 141.6
Total 4,906 6,421 6,569 33.9 2.3 6,569 4,906 33.9

Hydraulics 14.1 12.7 15.6 150 280 14.2 13.4 80.0
Aerospace 45.3 28.5 26.4 (1,880) (200) 31.6 35.6 (400.0)
Automotive (27.5) (43.1) (44.9) - - (33.3) (24.0) -
Average 18.6 10.7 9.2 (930) (150) 13.2 10.5 270.0
May 31, 2017 5

Exhibit 6: Segmental Performance - Subsidiary

Revenue 2,670 2,236 2,423 (9.2) 8.4 10,014 10,624 (5.7)
Expenditure 2,441 2,116 2,247 (7.9) 6.2 9,346 9,956.3 (6.1)
Consumption of RM 1,582 1,388 1,447 (8.5) 4.2 6,087 6,476 (6.0)
as % of sales 40.8 39.4 38.2 40.4 43.4
Employee Cost 399 397 415 4.0 4.6 1,625 1,590 2.2
as % of sales 10.3 11.3 11.0 10.8 10.6
Other expenditure 460 331 385 (16.2) 16.6 1,634 1,890 (13.5)
as % of sales 11.9 9.4 10.2 10.8 12.7
EBITDA 229 120 176 (23.1) 46.0 668 668 0.0
Depreciation 63 56 64 2.2 14.8 232 233 (0.3)
EBIT 166 64 111 (32.7) 73.3 435 435 0.2
Other Income 17 (27) (27) - - (51) 10 -
Interest 60 34 31 (48.8) (8.3) 170 211 (19.4)
PBT 122 4 54 (55.9) 1,214.6 215 233 (8.0)
Total Tax 45 18 34 (24.1) 86.8 122 123 (1.0)
Adjusted PAT 77 (14) 20 (74.3) (241.1) 93 110 (15.8)
Reported PAT 77 (14) (3) (103.2) (82.3) 70 110 (36.2)

EBIDTA 8.6 5.4 7.3 (130) 190 6.7 6.3 40
EBIT 6.2 2.9 4.6 (160) 170 4.3 4.1 30
EBT 4.6 0.2 2.2 (230) 200 2.1 2.2 -10
PAT 2.9 (0.6) (0.1) - - 0.7 1.0 -30
Effective Tax rate 36.7 443.9 63.1 2,640 - 56.9 52.9 400
May 31, 2017 6

Exhibit 7: Segmental Performance - Subsidiary

Segment Revenues
Hydraulics 252 192 214 (15.2) (106.5) 850 723 17.6
Aerospace 262 293 250 (4.6) (101.3) 1,182 892 32.6
Automotive 2,187 1,780 1,988 (9.1) (100.4) 8,099 6,390 26.7
Other (31) (29) (29) (118) (92) 28.1
Total 2,670 2,236 2,423 (9.2) (100.3) 10,014 7,913 26.5
Segment Results
Hydraulics 27 8 17 (36.0) (419.2) 35 19 86.1
Aerospace 24 88 38 55.0 (13.7) 218 104 110.0
Automotive 151 (0) 95 (37.5) (138.8) 264 285 (7.1)
Other (37) (32) (38) (82) (60) 36.6
Total 166 64 111 (32.7) (120.0) 435 347 25.4
net of unallocable income 40 49 49 24.2 (38.5) 188 68 176.1
Interest 60 34 31 (48.8) (177.4) 170 158 7.6
PBT 66 (19) 31 (52.4) (185.8) 77 121 (36.5)
Hydraulics 147 161 614 318.7 690.9 614 147 318.7
Aerospace 822 811 823 0.2 (100.0) 823 822 0.2
Automotive 1,127 1,574 2,268 101.2 (92.7) 2,268 1,127 101.2
Others 68 36 (25) - - (25) 68 -
Unallocated (496) (1,861) (3,099) - - (3,099) (496) 524.3
Total 1,668 720 581 (65.1) (104.1) 581 1,668 (65.1)

Hydraulics 10.8 4.4 8.1 (270) 380 4.1 2.6 150
Aerospace 9.3 30.1 15.0 580 (1,510) 18.5 11.7 680
Automotive 6.9 (0.0) 4.8 (220) 480 3.3 4.5 (120)
Average 6.2 2.9 4.6 (160.0) 170.0 4.3 4.4 -
May 31, 2017 7

Exhibit 8: Assumptions – Consolidated

FY14 FY15 FY16 FY17E FY18E FY19E
Segment Revenue
Hydraulics 3,095 2,922 2,613 2,851 3,059 3,470
Growth 8% -6% -11% 9% 7% 13%
Automotive 10,547 10,750 9,605 9,734 9,962 10,511
Growth 6% 2% -11% 1% 2% 6%
Aerospace 2,233 2,602 2,698 3,685 4,030 5,265
Growth 29% 17% 4% 37% 9% 31%
Others - 18 21 - - -
Growth -100% 0% 17% -100% 0% 0%
Total 15,875 16,292 14,938 16,270 17,051 19,245
EBITM
Hydraulics 11% 9% 9% 9% 12% 12%
Automotive 2% 2% 1% -1% 2% 3%
Aerospace 26% 21% 24% 24% 24% 24%
Others 0% -271% -436% 0% 0% 0%
Segment EBIT
Hydraulics 334 260 234 269 364 426
Automotive 211 234 90 (91) 169 274
Aerospace 571 540 656 886 967 1,264
Others - (49) (93) - - -
Total 1,117 985 887 1,064 1,500 1,964
Corporate expenditure 0 (20) (0) (46) 1 (0)
Operating Income 1,117 1,005 887 1,110 1,499 1,965
Other Income 35 103 50 59 20 23
Interest expenses 997 800 728 741 666 666
PBT before exceptionals 155 308 209 428 853 1,321
Exceptional Income/(Expenses) 103 191 - - - -
Extraordinary income/(expenses) - - - - - -
PBT after exceptionals and before
258 499 209 428 853 1,321
MI and share of profit/(loss) in Assoc/ JV
Taxes 120 213 86 181 246 379

PAT 138 286 123 247 607 943
May 31, 2017 8

Exhibit 9: Segment Financials for FY19E

(Rs mn) Hydraulics Automotive Aerospace
EBIT 426 274 1,264
Less: Interest 83 220 311
PBT 344 55 953
Less: Tax 98 16 273
PAT 245 39 680
Exhibit 10: Valuation Summary

(Rs mn) PAT Multiple (x) Valuation Value per share
Hydraulics 245 15 3,703 584
Automotive 39 - - -
Aerospace 680 25 16,990 2,680
Total 20,694 3,264
Net cash 826 1 826 130
Total Value 21,520 3,394
No of Shares (in mn) 6
Target Price (in Rs) 3,396 -
Exhibit 11: Revision in Earnings Estimates

FY18E FY19E
Y/E, Mar (Rs Mn)
Earlier Revised % Change Earlier Revised % Change
Revenues 18,329 17,051 (7.0) 20,488 19,245 (6.1)
EBITDA 2,255 2,086 (7.5) 2,637 2,570 (2.5)
EBITDA Margin (%) 12.3 12.2 -10 bps 12.9 13.4 50 bps
APAT 703 607 (13.7) 943 943 0.0
EPS (Rs) 110.8 95.7 (13.7) 148.7 148.7 0.0
May 31, 2017 9

Key Financials (Consolidated)

Income Statement
Y/E Mar (Rs mn) FY15 FY16 FY17 FY18E FY19E
Net Sales 16,292 14,938 15,078 17,051 19,245
Expenditure 14,778 13,527 13,424 14,965 16,676
EBITDA 1,514 1,411 1,653 2,086 2,570
Depreciation 509 524 544 586 605
EBIT 1,005 887 1,110 1,499 1,965
Other Income 103 50 59 20 23
Interest expenses 800 728 741 666 666
PBT 308 209 428 853 1,321
Tax 213 86 181 246 379
Extraordinary Items 191 0 (101) 0 0
Minority Int./Income from Assoc. 0 0 0 0 0
Reported Net Income 286 123 146 607 943
Adjusted PAT 96 123 247 607 943
Balance Sheet
Equity share capital 63 63 63 63 63
Reserves & surplus 2,453 2,513 2,401 2,992 3,912
Net worth 2,517 2,576 2,464 3,055 3,975
Minority Interest 0 0 0 0 0
Loan Funds 5,167 5,958 6,245 6,245 6,245
Net deferred tax liability 276 253 232 232 232
Total Liabilities 7,959 8,787 8,941 9,532 10,452
Net block 6,435 6,266 6,479 6,243 5,988
Investment 0 1 7 7 7
Current Assets 5,019 5,261 5,766 6,827 8,326
Cash & bank balance 761 627 826 1,641 2,447
Other Current Assets 300 240 182 182 182
Current liabilities & Provision 3,539 3,027 3,555 3,788 4,112
Net current assets 1,480 2,234 2,211 3,039 4,214
Misc. exp 0 0 0 0 0
Total Assets 7,959 8,787 8,941 9,532 10,452
Cash Flow
PBT (Ex-Other income) (NI+Dep) 206 159 368 833 1,298
Other Non-Cash items (419) 71 (21) 0 0
Chg in working cap (308) (911) 201 (13) (369)
Operating Cashflow 1,160 424 1,674 1,827 1,822
Capital expenditure (106) (598) (714) (350) (350)
Free Cash Flow 1,054 (174) 960 1,477 1,472
Investments 0 (1) (6) 0 0
Other Investing Cash Flow 487 70 (110) 0 0
Investing Cashflow 483 (479) (770) (330) (327)
Equity Capital Raised 498 (43) 0 0 0
Loans Taken / (Repaid) (775) 791 287 0 0
Dividend paid (incl tax) 0 0 (258) (15) (23)
Other Financing Cash Flow (296) (119) 0 0 0
Financing Cashflow (1,373) (99) (712) (682) (689)
Net chg in cash 271 (154) 191 815 806
Opening cash position 441 761 627 826 1,641
Closing cash position 761 627 826 1,641 2,447
May 31, 2017 10

Key Ratios
Profitability (%) FY15 FY16 FY17 FY18E FY19E
EBITDA Margin 9.3 9.4 11.0 12.2 13.4
EBIT Margin 6.2 5.9 7.4 8.8 10.2
Effective Tax Rate 69.0 41.2 42.2 28.9 28.6
Net Margin 0.6 0.8 1.6 3.6 4.9
ROCE 14.1 11.2 13.3 16.5 20.0
ROE 4.8 4.9 10.0 22.4 27.2
RoIC 14.0 11.9 14.2 19.5 25.7
Per Share Data (Rs) FY15 FY16 FY17 FY18E FY19E

EPS 15.1 19.4 39.0 95.7 148.7
CEPS 95.4 102.1 124.8 188.2 244.1
BVPS 389.5 398.9 381.3 474.5 619.6
DPS 0.0 0.0 0.0 2.0 3.0
Valuations (x) FY15 FY16 FY17 FY18E FY19E

PER 173.0 134.5 66.8 27.2 17.5
P/CEPS 27.3 25.5 20.9 13.8 10.7
P/BV 6.7 6.5 6.8 5.5 4.2
EV / Sales 1.3 1.5 1.5 1.2 1.1
EV / EBITDA 13.8 15.5 13.3 10.1 7.9
Dividend Yield (%) 0.0 0.0 0.0 0.1 0.1
Gearing Ratio (x) FY15 FY16 FY17 FY18E FY19E

Net Debt/ Equity 1.8 2.1 2.2 1.5 1.0
Net Debt/EBIDTA 2.9 3.8 3.3 2.2 1.5
Working Cap Cycle (days) 16.1 39.3 33.5 29.9 33.5
Growth (%) FY15 FY16 FY17 FY18E FY19E

Revenue 2.6 (8.3) 0.9 13.1 12.9
EBITDA (7.1) (6.8) 17.2 26.2 23.2
EBIT (10.0) (11.8) 25.2 35.1 31.0
PAT 108.0 (57.1) 18.9 315.5 55.4
Quarterly (Rs mn) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

Revenue 3,878 3,946 3,819 3,520 3,783
EBITDA 528 479 441 335 388
EBITDA Margin (%) 13.6 12.1 11.6 9.5 10.3
PAT 192 128 80 12 (75)
EPS (Rs) 30.3 20.2 12.7 1.9 (11.8)
Shareholding Pattern (%) Mar-16 Jun-16 Sep-16 Dec-16 Mar-17

Promoters 51.1 51.1 51.1 50.3 50.2
FIIs 14.5 14.0 14.4 14.5 14.7
DIIs 11.2 12.4 12.5 13.2 13.2
Public and Others 23.1 22.6 22.0 22.0 22.0
Source: Capitaline
May 31, 2017 11

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

Closing Period
Date TP Rating Analyst BUY Hold Sell
Price (months) Accumulate Reduce Price
Target Price
14-Feb-17 2,953 3,540 12m Accumulate John Perinchery 5000
15-Nov-16 2,900 4,134 12m Buy John Perinchery
4000
04-Oct-16 3,144 4,134 12m Buy John Perinchery
Source: Company, Emkay Research 3000
2000
1000
01-Aug-14
01-Dec-14
01-Apr-15
01-Aug-15
01-Dec-15
01-Apr-16
01-Aug-16
01-Dec-16
01-Apr-17
01-Feb-15
01-Feb-16
01-Feb-17
01-Jun-14
01-Jun-15
01-Jun-16
01-Oct-14
01-Oct-15
01-Oct-16
Source: Bloomberg, Company, Emkay Research
May 31, 2017 12

Emkay Rating Distribution

BUY Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months.
ACCUMULATE Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months.
HOLD Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months.
REDUCE Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months.
SELL The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.
Emkay Global Financial Services Ltd.

CIN - L67120MH1995PLC084899
7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India
Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com
DISCLAIMERS AND DISCLOSURES: Emkay Global Financial Services Limited (CIN-L67120MH1995PLC084899) and its affiliates are a full-service, brokerage, investment banking, investment
management and financing group. Emkay Global Financial Services Limited (EGFSL) along with its affiliates are participants in virtually all securities trading markets in India. EGFSL was established in 1995
and is one of India's leading brokerage and distribution house.EGFSL is a corporate trading member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited(NSE), MCX Stock
Exchange Limited (MCX-SX).EGFSL along with its subsidiaries offers the most comprehensive avenues for investments and is engaged in the businesses including stock broking (Institutional and retail),
merchant banking, commodity broking, depository participant, portfolio management, insurance broking and services rendered in connection with distribution of primary market issues and financial products
like mutual funds, fixed deposits. Details of associates are available on our website i.e. www.emkayglobal.com
EGFSL is registered as Research Analyst with SEBI bearing registration Number INH000000354 as per SEBI (Research Analysts) Regulations, 2014. EGFSL hereby declares that it has not defaulted with
any stock exchange nor its activities were suspended by any stock exchange with whom it is registered in last five years, except that NSE had disabled EGFSL from trading on October 05, October 08 and
October 09, 2012 for a manifest error resulting into a bonafide erroneous trade on October 05, 2012. However, SEBI and Stock Exchanges have conducted the routine inspection and based on their
observations have issued advice letters or levied minor penalty on EGFSL for certain operational deviations in ordinary/routine course of business. EGFSL has not been debarred from doing business by
any Stock Exchange / SEBI or any other authorities; nor has its certificate of registration been cancelled by SEBI at any point of time.
EGFSL offers research services to clients as well as prospects. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject
company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
Other disclosures by Emkay Global Financial Services Limited (Research Entity) and its Research Analyst under SEBI (Research Analyst) Regulations, 2014 with reference to the subject
company(s) covered in this report-:
EGFSL or its associates may have financial interest in the subject company.
Research Analyst or his/her relative’s financial interest in the subject company. (NO)
EGFSL or its associates and Research Analyst or his/her relative’s does not have any material conflict of interest in the subject company. The research Analyst or research entity (EGFSL) have not been
engaged in market making activity for the subject company.
EGFSL or its associates may have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research Report.
Research Analyst or his/her relatives have actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of Research
Report: (NO)
EGFSL or its associates may have received any compensation including for investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or its
associates may have received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months. EGFSL or
its associates may have received any compensation or other benefits from the Subject Company or third party in connection with the research report. Subject Company may have been client of EGFSL or
its associates during twelve months preceding the date of distribution of the research report and EGFSL may have co-managed public offering of securities for the subject company in the past twelve months.
The research Analyst has served as officer, director or employee of the subject company: (NO)
The Research Analyst has received any compensation from the subject company in the past twelve months: (NO)
The Research Analyst has managed or co‐managed public offering of securities for the subject company in the past twelve months: (NO)
The Research Analyst has received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months: (NO)
The Research Analyst has received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months:
(NO)
The Research Analyst has received any compensation or other benefits from the subject company or third party in connection with the research report: (NO)
EGFSL and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material. Our salespeople, traders, and other professionals may provide
oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make
investment decisions that may be inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give
rise to real or potential conflicts of interest including but not limited to those stated herein. Additionally, other important information regarding our relationships with the company or companies that are the
subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or
other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject EGFSL or its group companies to any registration or licensing requirement
within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any
transaction to any U.S. person. Unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by
private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may
be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of EGFSL . All trademarks, service marks and logos used in this report are trademarks
or registered trademarks of EGFSL or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized
reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Pl ease ensure that you have read “Risk Disclosure Document for Capital Market
and Derivatives Segments” as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed
to be reliable, although its accuracy and completeness cannot be guaranteed.
Emkay Research is also available on www.emkayglobal.com, Bloomberg EMKAY<GO>, Reuters and DOWJONES. www.emkayglobal.com
May 31, 2017 13

DynamaticTech BUY Emkay 01.06.17

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

DynamaticTech BUY Emkay 01.06.17

Uploaded by

Copyright:

Available Formats

Dynamatic Technologies

India Equity Research | Engineering & Capital Goods

Refer to important disclosures at the end of this report

Muted performance Rs 2,606

expected to incur Rs100mn as retrenchment cost. Going forward, management expects

Financial Snapshot (Consolidated)

Net Sales 16,292 14,938 15,078 17,051 19,245 Source: Bloomberg

Exhibit 1: Actual Vs. Emkay

Exhibit 2: Quarterly Financials - Consolidated

Margins (%) (bps) (bps) (bps)

May 31, 2017 2

Exhibit 3: Segmental Performance - Consolidated

Segment Margins (%) (bps) (bps) (bps)

May 31, 2017 3

Exhibit 4: Quarterly Performance - Standalone

Margins (%) (bps) (bps) (bps)

May 31, 2017 4

Exhibit 5: Segmental Performance - Standalone

Segment Margins (%) (bps) (bps) (bps)

May 31, 2017 5

Exhibit 6: Segmental Performance - Subsidiary

Margins (%) (bps) (bps) (bps)

May 31, 2017 6

Exhibit 7: Segmental Performance - Subsidiary

Segment Margins (%) (bps) (bps) (bps)

May 31, 2017 7

Exhibit 8: Assumptions – Consolidated

Taxes 120 213 86 181 246 379

May 31, 2017 8

Exhibit 9: Segment Financials for FY19E

Exhibit 10: Valuation Summary

Exhibit 11: Revision in Earnings Estimates

May 31, 2017 9

Key Financials (Consolidated)

May 31, 2017 10

Per Share Data (Rs) FY15 FY16 FY17 FY18E FY19E

Valuations (x) FY15 FY16 FY17 FY18E FY19E

Gearing Ratio (x) FY15 FY16 FY17 FY18E FY19E

Growth (%) FY15 FY16 FY17 FY18E FY19E

Quarterly (Rs mn) Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17

Shareholding Pattern (%) Mar-16 Jun-16 Sep-16 Dec-16 Mar-17

May 31, 2017 11

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

May 31, 2017 12

Emkay Rating Distribution

Emkay Global Financial Services Ltd.

You might also like