Dynacons Systems & Solutions Ltd - A growing IT company

Company Introduction:

Dynacons Systems & Solutions Ltd. (DSSL) is an IT company with global perspectives with its headquarters at Mumbai and branches all over India. Established in 1995, Dynacons undertakes all activities related to IT infrastructure including infrastructure design and consulting services, turnkey systems integration of large Network and Data Centre infrastructures including supply of associated equipment and software, onsite and remote facilities management of multi location infrastructure of domestic clients. The Company has built a strong customer base, variety of talent and a competent service delivery infrastructure.

Dynacons Enterprise Services offerings include a wide spectrum of Enterprise IT and Office Automation Services including Infrastructure Managed Services, Breakfix Services, Managed print Services, cloud Computing, Systems Integration Services, and Applications Development and Maintenance. The Company provides end-to-end technology and technology related services to corporations across industry verticals.

DSSL is headquartered in Mumbai and has 11 branch offices and warehouses with presence in more than 250 locations across India. The company also has a wholly owned subsidiary company in Singapore, handling Asia Pacific operations.

DSSL has strategic alliances with multiple Global Technology Companies.

DSSL has Over 2000 Clients ranging across verticals including :

  • Global Companies
  • Government & PSU
  • BFSI
  • Corporate
  • Health Care
  • Educational

Company Offerings:

Some of the Clients:


Company Strengths and Investment Thesis:

*DSSL has built a strong customer base, variety of talent and a competent service delivery infrastructure.
*Company was successfully appraised at Capability Maturity Model Integration (CMMI)- Level 5 v 2.0
*Company is growing both topline and bottomline at steady pace. The operating income of DSSL has grown at a CAGR of 33 percent for the period FY2018-FY2022. The revenues increased to Rs. 653.98 Cr. in FY2022 from Rs. 435.94 Cr. in FY2021 and Rs.327.95 Cr. in FY2020.
*DSSL has an orderbook position of around Rs.940 crore (Against revenue of Rs.654 cr in FY20202) showing healthy revenue visibility over the medium term.
*The directors of the company have an experience of over two decades in the aforementioned line of business which has also helped the company to garner reputed clientele (See clients above).
*DSSL is trading at low Price to Sales multiple of 0.51 and reasonable P/E multiple of 19.1 considering the healthy order book and revenue visibility.
*DSSL has maintained healthy ROCE of above 20% in last 4 years (28% in FY2022).
*Promotors shareholding is in increasing trend and current promotor shareholding is 59.66%.
*Management provides regular update to shareholders on Order wins and have good annual report details for a company of this size.

*This is a microcap company with mcap of 339 Cr. As with any microcap company, the risk is high and chance of capital erosion is high.
*DSSL operates in a fragmented and competitive IT industry, where it faces high competition
from small as well as well established players with high resources.
*DSSL undertakes significant business with government authorities like MCGM, RBI, LIC, SBI etc which demands an extended credit terms which has resulted in stretch in the debtors’ cycle during FY2022 which stood at 98 days against 85 days in FY2021.
*Trade receivables is high.
*OPM is very low around 5%.

Disclosure: Invested (This is not a investment advice. Please do your own diligence.)


Dynacons wins one of the prestigious order worth Rs 105 crores from Life Insurance Corporation of India.pdf (3.2 MB)

Recent order win by DSSL.


a very quick screener data check- why the co has high interest payout of 10 crore in last 12 months?being an it company with high interest burden ( 30% of operating profit ) and thin margin , i would keep it under observation.


Purchases of Information Technology Products — is major part of expanse (+90%) – I believe this company purchase software from other big company and deploy to its customer. Once you remove “Purchases of Information Technology Products” rest is too small number.


thanks for explaining it . but then they would also get paid for it. Not paid in advance then only it would come as debt - as high as that paying 30% of op profit. take example of cmsinfo which is 2.5x in size and interest is 150%. btw CMSinfo is high on capex including fleet capex and opex.
Again my observations are just on the numbers. I would take time to understand business and till then under watchlist.

Excellent set of numbers from DSSL!
f7bb7ee9-28bb-474b-8eb7-553ffa7cfb59.pdf (2.0 MB)

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Thanks for making this thread Chethan.
Company looks great on numbers and I have been invested for quite some time now in this company. My rationale behind investment was based more on the theme of digitalisation and how this company might help the grand sector of bringing new and old companies up to date with technologies.

Along with all the aspects of the company (which you have already covered), there are few things which have been pain points for me to understand. This is mainly on the Trade receivables and Trade payable.

There is a huge gap between revenue growth and trade receivable growth compared to previous quarters. The fear that lingers with this is, that whether the company is showing sales are revenue but realisation might be far away. The reason can be attributed to business dealing with government agencies but then too the increase in receivables is very steep.
Hope you have more idea about this.


Dynacons bags Rs. 116 crores Private Cloud Solution Order for Union Bank of India.

206bdc26-e209-433d-9f11-a595d53e1983.pdf (3.9 MB)


CARE Ratings Ltd. had, vide its press release dated August 11, 2020, placed the rating(s) of Dynacons Systems & Solutions
Limited (DSSL) under the ‘issuer non-cooperating’ category as DSSL had failed to provide information for monitoring of the

I had a call with the company secretary regarding the same. Called her on the same day when the report came out. She clarified it to me that DSSL never asked for any rating and she told me that the company will immediately look into it.
Also, to add, I was first not able to get in touch as the individual was out of the office, they made sure to put in touch with her, while she was travelling.

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Appreciate the quick follow up with the company of this issue. Good to know the respective function at DSSL ensured you got in touch with the CS.

With Debt increasing by ~9x from ~7cr (FY12) to ~68cr (FY22), cumulative OCF/PAT % generated across multiple periods in past 10yrs being either -ve or < 40% and Interest Coverage improving only post FY20 (year CARE mentions issuing ‘Non Cooperation’ rating, DSSL’s ‘Revenue Recognition’ and ‘Cash Collection’ needs to be drilled further to get a better understanding of the business.

Below excerpt of auditors from FY22 AR;

Appreciate you sharing the excerpt.

It does grab ones attention, but that “may” in their conclusion really doesnt help. Either state that it is the case, or it isnt.

And yes, the finsncial performance of the company has gotten better after the pandemic, benefitting from the digital shift, resulting to us seeing the LIC and the other such renowned entities.

All in all, it is a small IT name that could grow given the IT positive environment we have in the world and India. Because it is small, its health isnt and wont be as good as a TCS. Its debt could be higher in the future, but how else is a local company going to grow ? Its not famous yet to raise capital, leaving debt as the only way to go about it. Also, unlike other IT names DSSL provides actual products to its clients hence the inventory hence the need for debt.

One of the goods is that this company is purely a domestic IT play with big domestic clients like LIC. Unlike other famous IT firms where 90%+ revenue is dependent on foreign demographics, DSSL works with our own people.

Again, it is a small firm, so it is given that it wont have, now and till the time it works with many more remnowned clients, it wont have a TCS like balance sheet, it cant and, it shouldnt either because if they start focusing on getting a dent free balance sheet, they will surely lag behind in growth.

Uncertainities and hard to digest information has to be expected, it has to be. It could become great tomorrow, then not so great the following year, and the cycle continues till the time it becomes a go to partner for all its clients, which is the aim isnt it ?

Its a small name, that is working to be known, and if they are able to work with entities like LIC and such public banks ? They know something about closing deals that we dont.

Yes, I am invested. And will be.


IMO this issue is a pretty normal and non-alerting issue.
As per my understanding, the ratings are requested by a company when they are looking to raise some capital and have to show a proof of the health of their undertaken debts. Once this is done the rating agency tries to reach out to the company again after some period of time for a re-evaluation. Now depending on the need by the company, the company can deny or ask for a re-evaluation.
If the company denies any requirement, the rating agency issues a letter as attached.
Note - This also happens when a company tries to switch rating agencies for any particular reasons. Recent e.g. is Ugro Captial Ltd.
I hope this answers the query.
Discl. - Invested


Last three years had same report, if you look at annexure . Also if you review screener, you can see rating from smera is reported for all these years. So these noise can be ignored safely.


I should have shared this in my response as well. Appreciate you sharing it James.

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@james_kerala @Bimal_Purohit

Thanks for clarifying this aspect regarding rating agencies. I had seen the SMERA/ACUITE ratings, but wanted to ensure if there were any red flags we need to watch out for based off of CARE’s recent Nov, 2022 ratings. Good to know this is non issue.

The business surely has promising scope in the growing Data Center infrastructure segment (may not be directly compared with established IT Services/Software firms) and can benefit well if it can effectively convert the demonstrated Sales/PAT growth to cash flows.

Disclosure: Tracking & Researching

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Dynacons has won one of the prestigious order worth Rs. 26.99
Crores for Supply, Installation and setup for 2400 Apple iPad from High Court of Judicature at Bombay.

The Scope includes the Supply, installation & integration of Apple iPads at 2400 Judicial officers all over Maharashtra.

The Scope includes the Supply, installation & integration of Apple iPads

What’s installation and integration of apple iPads?
And when we say supply, does it mean they will buy iPads from a 3P vendor and supply them on higher margin?

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Possibly yes. This is an interesting contract win, as we all have thought of DSSL to take care of the clients infrastructure but on a technical level.

This shows that clients seem to rely and can rely on DSSL for everything - one stop shop.

Also makes sense if we look at the type of clients, these are not tech savvy businesses.
Hence, they find value if calling one person up to take care of all their needs.

DSSL is their ‘Fixer’.

Interesting development to say the least.

Edited the comment to DISCLOSE - invested.