Dynamic Services & Security Limited

Sector n/a · NSE

₹274.30−₹12.95 (−4.51%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

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

How does it make money?

Turns over ₹491 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Some evidence

ROCE of 19.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +500% while net margin moved -29% 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+500%

Margin effect-29%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

60/ 100

Fair

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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

10.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 8.7% to 16.4% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1072% over 3 years, from ₹20 Cr to ₹233 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 819% against revenue up 500% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 74% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.7% 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 8.7% to 16.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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
4 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 61% a year✓ 81.7% CAGR
Latest reported year was 78.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹111 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 17%✓ 19.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹645 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

14.4%

Moderate

Moderate capital efficiency

ROCE

19.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.78x

Moderate

Moderate leverage

Revenue Growth (YoY)

78.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

156.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹111 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

38.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

8.8%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

131.9 / 136.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹82 Cr	₹119 Cr	₹275 Cr	₹491 Cr	+81.7%
EBITDA	₹7 Cr	₹17 Cr	₹37 Cr	₹80 Cr	+124.2%
EBITDA Margin	8.7%	14.0%	13.3%	16.4%	—
PAT (Net Profit)	₹10 Cr	₹9 Cr	₹17 Cr	₹43 Cr	+61.8%
EPS	₹7.54	₹3.83	₹7.17	—	—
ROE	14.8%	10.4%	9.1%	14.4%	—
ROCE	20.9%	14.8%	13.5%	19.7%	—
Total Debt	₹20 Cr	₹34 Cr	₹119 Cr	₹233 Cr	+127.2%
Free Cash Flow	₹16 Cr	-₹47 Cr	-₹31 Cr	-₹111 Cr	—

🟢 Revenue has grown at 81.7% a year over 3 years.

🟢 EBITDA has grown at 124.2% a year over 3 years.

🟢 EBITDA Margin has risen from 8.7% to 16.4% over 3 years (+7.7 pts).

🟢 PAT (Net Profit) has grown at 61.8% a year over 3 years.

🟡 ROE has held roughly flat at 14.4% over 3 years.

🔴 ROCE has fallen from 20.9% to 19.7% over 3 years (-1.1 pts).

🔴 Total Debt has grown at 127.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹16 Cr to -₹111 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹662 Cr

Total Liabilities

₹307 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹113 Cr

Recent News

2 mixed4 general

Is Now The Time To Put Dynamic Services & Security (NSE:DYNAMIC) On Your Watchlist?

Simply Wall Street, 24 Sept

Compare UNI LEGWEARS with

Equitymaster, 16 Oct

Dynamic Services & Security Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Dynamic Services & Security (DYNAMIC) Share Price Falls 8.50% Today

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Dynamic Services & Security wins Rs 56.22 lakh order from South Eastern Railway

scanx.trade, 05 Oct

Dynamic Services & Security (DYNAMIC-SM) Share Price Falls 8.22% Today

Univest, 25 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Growth

MiddlingFinancial Health · Profitability · Valuation

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. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑