Dynamatic Technologies aerospace scale-up and segment recovery broaden growth outlook
Dynamatic Technologies Ltd.
BUY
₹12,800
₹13,607.3
₹15,340
19.84%
Investment View and Valuation
In its September 29, 2026 company update on Dynamatic Technologies, ICICI Direct Research maintains its BUY recommendation and revises the target price to Rs 15,340, based on 55 times FY28E P/E. The target implies 20 per cent upside from the CMP of Rs 12,800.
The broker believes Dynamatic Technologies is well placed to capture a sizeable aerospace-components opportunity, while recovery in the hydraulics and metallurgy businesses improves overall growth and profitability.
Aerospace: Key Growth and Margin Driver
Aerospace is the central growth and margin driver, contributing about 48 per cent of FY26 revenue. Segment revenue grew 17 per cent year on year in Q1FY27, while EBITDA margin improved to 23.8 per cent. The reported improvement reflected execution across commercial aerospace and defence programmes, as well as a wider portfolio of complex components.
Dynamatic Technologies industrialised and made delivery-ready the first complete shipset of all eight doors for the Airbus A220 doors programme ahead of schedule. The Dassault Falcon 6X rear fuselage and Deutsche Aircraft D328eco programmes are also progressing.
The company has strengthened OEM relationships through a strategic agreement with Dassault Aviation and a Memorandum of Agreement with Hutchinson for next-generation aerospace composites. Aerospace now manufactures more than 250,000 detail parts annually.
ICICI Direct expects ramp-up in existing programmes and new-platform additions to support long-term growth. It estimates aerospace revenue CAGR of about 24 per cent during FY26 to FY28E, with EBITDA margin moving towards more than 24 per cent by FY28E.
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Recovery in Hydraulics and Metallurgy
Hydraulics
Hydraulics accounted for about 30 per cent of FY26 revenue and is showing operating recovery. Its EBITDA margin improved to 12.5 per cent in Q1FY27, helped by strong domestic tractor demand, product-mix optimisation and benefits from UK restructuring.
ICICI Direct expects the transfer of selected production from Swindon to Bangalore and product-line rationalisation to further improve the cost structure over the medium term.
Metallurgy
Metallurgy represented about 22 per cent of FY26 revenue. Revenue improved on an early recovery at Erla, Germany, and EBITDA margin rose to 3.7 per cent in Q1FY27 from a broadly flat margin through FY26.
Dynamatic Technologies is shifting this business towards aerospace, defence and specialised engineering applications, which could improve mix and profitability over time.
Financial Outlook
ICICI Direct forecasts consolidated revenue, EBITDA, EBITDA margin, PAT and return on capital employed to improve substantially through FY28E.
| Metric | FY26 | FY27E | FY28E |
|---|---|---|---|
| Consolidated revenue (Rs crore) | 1,621 | 1,918 | 2,256 |
| EBITDA (Rs crore) | 183 | 267 | 346 |
| EBITDA margin | 11.3 per cent | 13.9 per cent | 15.3 per cent |
| PAT (Rs crore) | 32 | 118 | 177 |
| Return on capital employed | 10.3 per cent | 14.9 per cent | 18.1 per cent |
Key Risks
- Dependence on government contracts.
- High working-capital requirements.
- Availability of key raw materials.
Disclaimer: This is a summary of a research report published by the broker/research house identified above. The views, recommendations, target prices and estimates are those of the respective broker and do not represent DSIJ investment advice. The summary may be AI-assisted, hence please refer to the original report for complete details, disclosures and risks.
