DYNAMATIC TECH­NOLO­GIES

Dalal Street Investment Journal - - QUERYBOARD -

Sir, I have 83 shares of Dynamatic tech­nolo­gies at an av­er­age price of 2532. Please ad­vise me if I should hold or sell the stock - So­han Barhate

Dynamatic Tech­nolo­gies is a lead­ing pri­vate R&D or­gan­i­sa­tion, with nu­mer­ous in­ven­tions and patents to its credit. It de­signs and builds en­gi­neered prod­ucts for au­to­mo­tive, aero­nau­tic, hy­draulic and se­cu­rity ap­pli­ca­tions. Its au­to­mo­tive seg­ment ac­counts for 59 per cent of the rev­enue, while the hy­draulics arm and the Aero­space arm con­trib­ute 18 per cent and 23 per cent, re­spec­tively. On the fi­nan­cial front, Dynamatic Tech­nolo­gies’ rev­enue in­creased 0.51 per cent to

₹ 118.60 Crore in Q1FY18 from ₹ 117.99 crore in Q1FY17. How­ever, the com­pany’s PBDT de­creased by 111.80 per cent to ₹ -1.84 crore in the first quar­ter of FY18 vis-à-vis ₹ 15.59 Crore in Q1FY17. The com­pany’s net profit also de­creased by 253.85 per cent to ₹ -8.57 crore for the same pe­riod. On an an­nual ba­sis, the com­pany’s rev­enue im­proved by 17.17 per cent to

₹ 505.4 crore in FY17 com­pared to the pre­vi­ous fis­cal. The com­pany’s PBDT in­creased by 104.23 per cent to ₹ 44.59 crore in FY17 on a yearly ba­sis. The com­pany’s net profit in­creased from ₹ 1.29 crore in FY16 to ₹ 7.59 crore in FY17. The Com­pany has a low in­ter­est cover­age ra­tio. Also, the pro­moter’s stake has de­creased. The com­pany has de­liv­ered a poor growth of -0.01 per cent over past five years. Com­pany has a low re­turn on eq­uity of 7.65 per cent for last 3 years. We rec­om­mend our reader-in­vestors to EXIT the stock

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