Multibagger Stock: Dynamatic Technologies advances 250% in 2 years, 903% in 4 years. What lies ahead? | Stock Market News

Multibagger Stock: Dynamatic Technologies, a manufacturer of hydraulic gear pumps and automotive turbochargers, has emerged as a significant wealth creator on Dalal Street. Its shares have surged from ₹2,428 apiece two years ago to the current trading level of ₹8,502, delivering an impressive return of 250%. Over a longer horizon, the stock has provided a staggering 903% return in the past four years.

For instance, if an investor had invested ₹1 lakh during this period and held onto the investment until the present date, it would now be worth ₹10 lakh. 

In its recent report, domestic brokerage firm ICICI Securities maintained a positive outlook on the stock despite a stellar rally. The brokerage has a target price of ₹10,250 apiece on Dynamatic Technologies stock along with a ‘buy’ rating.

Dynamatic Technologies has a market cap of ₹8555 crore, suggests data from NSE.

The company manufactures highly engineered, mission-critical products for the aerospace, metallurgy, and hydraulics industries. It commands approximately 80% of the Indian OEM tractor market and about 38% of the global tractor market.

It serves as a Tier-I supplier to global aerospace OEMs and primes such as Airbus, Boeing, BEL, Bell Helicopters, Dassault Aviation, Hindustan Aeronautics Limited, and Spirit Aerosystems.

During the September quarter (Q2FY25), the company reported flat revenue growth on a YoY basis at ₹361 crore. Among individual segments, the aerospace segment continued to be the leading contributor to the company’s revenues, registering a 14.9% year-over-year growth to ₹148 crore, despite industry-wide supply chain challenges such as customer parts shortages, delivery delays, and rising shipping costs. 

The company’s outlook remains optimistic, having secured substantial orders that could double its aerospace business within 30 months.

The hydraulics segment also delivered a robust performance, with revenue increasing by 28.3% YoY to ₹130 crore as favourable monsoon conditions boosted the agricultural sector, resulting in higher volumes in the UK and India. Margins in this segment are now recovering, supported by product line rationalisation across facilities in Swindon and Bangalore.

Meanwhile, the metallurgy segment faced headwinds, with revenue declining by 31.3% YoY to ₹82 crore due to weak global and domestic demand, higher energy costs, and the appreciation of the euro. However, the company’s strong technical capabilities are facilitating a transition of its metallurgy subsidiary into the aerospace and defence sector, with sample defence parts already delivered and business expected to commence in the second half of the year.

Strategic focus across segments

The company is strategically focusing on enhancing performance across its key segments. In the aerospace segment, efforts are directed toward manufacturing engineering and the development of new products, particularly in assembly and detailed components, to boost both revenue and margins.

The hydraulics segment aims to increase its aftermarket share, improve operational efficiencies, and adopt value engineering practices to enhance profitability. Additionally, the development of innovative products is expected to expand the company’s wallet share within the market.

In the metallurgy segment, the emphasis is on transitioning to a high-margin product mix, rationalising low-margin offerings, and advancing the development of aerospace castings and forgings, positioning the business for robust growth in the coming year, as per the company’s recent regulatory filing.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.