Flying high

The soaring stock price of Dynamatic Technologies has benefited all shareholders,the promoter included

Udayant Malhoutra, the CEO of Dynamatic Technologies recently sold 51,000 shares from his personal holding in the open market. The transaction was completed at Rs.3,419 per share and fetched Rs.17.43 crore. Dynamatic’s stock price has been trending upwards and has nearly doubled in FY17 so far. And for CY2016, it is up 32%.

Malhoutra has successfully scaled Dynamatic’s original hydraulic systems business and has also led Dynamatic into new businesses viz. aerospace and automotive. It is the largest supplier of hydraulic gear pumps to the domestic tractor and construction equipment industry. The company has approximately 60% share of the organised Indian tractor market and supplies to almost all tractor OEMs in India.

Of the company’s revenue of Rs.1,493 crore, 18% comes from its hydraulics business, 18% from aerospace and the balance 64% from automotive. Dynamatic’s automotive business comprise of a local Indian foundry and a German foundry that supplies metallurgical products for automotive engines.

Analysts believe the company is set to report strong earnings on the back of its impressive order book. An Emkay Global report opines, “The company has an impressive order book of approximately $980 million, consisting of deliveries to Airbus, Boeing, Textron (Bell Helicopters) and other aircraft original equipment manufacturers (OEM), to be executed over the next ten years. We expect revenues and profitability to increase by 11% and 110% CAGR (FY16-19E) respectively – led by ramp up in aerospace deliveries and reduction in interest cost.” Institutional investors with sizeable holding in Dynamatic include HDFC MF (8.26%), SBI MF (3.23%), and Goldman Sachs (2.82%).