Dynacons Systems & Solutions Limited

Technology — Information Technology Services · NSE

₹1,045.00+₹33.10 (+3.27%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of Dynacons Systems & Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dynacons Systems & Solutions Limited provides IT solutions and related services in India and internationally. It operates through System Integration and Technology Workforce Augmentation Services segments.

IndustryInformation Technology Services

SectorTechnology

Employees1,154

Annual revenue₹1,424 Cr

How does it make money?

Turns over ₹1,424 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 1,154 employees supports ₹1.23 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.23 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 31.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 26.9% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +77% while net margin moved +43% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+77%

Margin effect+43%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.80 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

63/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

15.7x

3Y Median

24.8x

40 monthly readings · mean 25.5x · range 13.8x–47.3x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 37% below its 3y median of 24.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

24.8x median over 40 months · -37%

vs. sector peers

Fair

16.5x median of 4 peers · -5%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.3x

PEG

0.43

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 6.9% to 10.6% over 3 years.
High return on capital employed
ROCE of 31.4% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 31.9% to 26.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 42.9% to 31.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 245% over 3 years, from ₹69 Cr to ₹237 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 9.8x to 6.0x.
🟡Receivables growing faster than salesFinancial
Receivables up 100% against revenue up 77% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 31.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 6.9% to 10.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 37% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 100% against revenue up 77%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 31.9% to 26.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 16% a year✓ 21.0% CAGR
Latest reported year was -4.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 10.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 28%✓ 31.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹1,331 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.7x

Fair

Fairly valued against the generic band

P/B Ratio

4.21x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹66.71

Profitable

Profitable on a per-share basis

ROE

26.9%

Strong

Strong capital efficiency

ROCE

31.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.75x

Moderate

Moderate leverage

Revenue Growth (YoY)

-4.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

0.8%

Modest

Slow profit growth

Dividend Yield

0.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

10.2%

Average

Average margins

Net Margin

6.0%

Average

Average bottom-line conversion

Current Ratio

1.35

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.80

Market-like

Moves roughly in line with the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1011.5 / 1066.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

52.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹804 Cr	₹1,024 Cr	₹1,267 Cr	₹1,424 Cr	+21.0%
EBITDA	₹56 Cr	₹82 Cr	₹110 Cr	₹151 Cr	+39.7%
EBITDA Margin	6.9%	8.0%	8.7%	10.6%	—
PAT (Net Profit)	₹33 Cr	₹54 Cr	₹72 Cr	₹85 Cr	+36.3%
EPS	₹27.7	₹42.37	₹56.87	₹66.58	+34.0%
ROE	31.9%	34.1%	31.3%	26.9%	—
ROCE	42.9%	46.1%	35.8%	31.4%	—
Total Debt	₹69 Cr	₹36 Cr	₹139 Cr	₹237 Cr	+51.1%
Free Cash Flow	₹13 Cr	₹29 Cr	₹37 Cr	₹3 Cr	-41.4%

🟢 Revenue has grown at 21.0% a year over 3 years.

🟢 EBITDA has grown at 39.7% a year over 3 years.

🟢 EBITDA Margin has risen from 6.9% to 10.6% over 3 years (+3.7 pts).

🟢 PAT (Net Profit) has grown at 36.3% a year over 3 years.

🟢 EPS has grown at 34.0% a year over 3 years.

🔴 ROE has fallen from 31.9% to 26.9% over 3 years (-5.0 pts).

🔴 ROCE has fallen from 42.9% to 31.4% over 3 years (-11.4 pts).

🔴 Total Debt has grown at 51.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 41.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,013 Cr

Total Liabilities

₹698 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹46 Cr

Capex

-₹44 Cr

Shareholding (proxy)

Institutional Holding

0.3%

Insider Holding

61.9%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

19 Aug 2026

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 positive1 mixed1 negative2 general

Dynacons Systems & Solutions' (NSE:DSSL) Earnings Are Weaker Than They Seem

Simply Wall Street, 07 JunResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Dynacons Systems & Solutions Upper Circuit Today

Univest, 06 Oct

Dynacons Systems & Solutions consolidated net profit rises 0.56% in the June 2026 quarter

Business Standard, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Dynacons Systems & Solutions Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

Dynacons Q1FY27 revenue down 4.6% on OEM delays; EBITDA up 26%

scanx.trade, 11 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Dynacons Systems shares to be in focus on Tuesday as company bags ₹751 crore private cloud order from RBI

Livemint, 04 MayOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Watch Items

Revenue growth is negative (-4.6%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑