Dynamatic Q2 FY27: consolidated PAT at ₹22.5 Cr, margins expand YoY off a weak base

Dynamatic Technologies' consolidated (primary basis) revenue rose 15.4% YoY and 6.6% QoQ to ₹452.7 Cr, with consolidated PAT at ₹22.5 Cr versus ₹3.3 Cr a year ago — a reported jump of ~579%. That headline is heavily base-effect driven: the year-ago quarter absorbed a ₹6.88 Cr exceptional restructuring provision at the UK hydraulics subsidiary (DLUK) plus a ₹5.62 Cr non-cash deferred-tax charge tied to the same restructuring, which together pushed last year's effective tax rate to 71.6% and PAT down to almost nothing. This quarter carries zero exceptional items and a normal 10.7% effective tax rate. Stripping out just the exceptional item, adjusted YoY PAT growth is closer to ~120%; even that remains elevated mainly because of the tax-rate normalisation rather than operating performance alone, where consolidated EBIT (segment basis) grew a more modest ~20% YoY in line with the revenue increase. The margin bridge is segment-driven. Hydraulics, which bore the UK exceptional charge last year, recovered to an 8.8% segment margin (from 3.1%) on revenue up 11.2% YoY to ₹140.4 Cr. Metallurgy swung to a small ₹0.4 Cr profit from a ₹5.0 Cr loss a year ago. Aerospace revenue grew 18.1% YoY to ₹210.8 Cr, but its segment margin actually eased to 15.7% from 20.5% YoY and from 17.8% last quarter — the one soft spot in an otherwise improving mix. Group EBITDA margin (ex-other income) was 12.3% versus 10.0% a year ago (expansion) but slipped from 12.97% last quarter (slight sequential compression), and NPM improved to 4.9% from 0.8% YoY. The standalone (India parent) numbers tell a materially different story and are worth flagging explicitly: standalone PAT fell to ₹6.8 Cr from ₹14.75 Cr a year ago even as standalone revenue grew 19.3% to ₹217.7 Cr, because the raw-material cost ratio rose to 67.1% of revenue from 54.9%, compressing standalone PBT margin to 4.0% from 10.1%. In other words, the group's YoY strength is coming from the overseas aerospace/metallurgy units and the absence of last year's UK one-off, not from the India standalone business, which is seeing real input-cost pressure consistent with the cost headwinds the company flagged alongside its Q1 FY27 print. Management issued no formal numeric guidance on record for this quarter and no press release/concall commentary was available to cross-check framing; no quarter-specific Street estimate was found either — the only external figure located was a full-year FY27 consensus revenue estimate of roughly ₹1,840 Cr (Trendlyne), against which H1 FY27 revenue of ₹877.5 Cr is tracking at a normal first-half run-rate. Corporate actions this quarter include a third interim dividend of ₹2/share (20%, record date 13 Nov 2026) on top of the ₹3/share interim paid in August, and post-quarter (non-adjusting) board approvals for a ₹29.2 Cr slump sale of the UAV vertical to subsidiary Dynauton and a ₹37.45 Cr preferential equity infusion into Dynauton, lifting the parent's stake there to ~83.33%. Going into Q3, the key markers are whether the low ~10.7% effective tax rate holds, whether aerospace segment margin stabilises after easing for two straight quarters, and whether the standalone input-cost pressure (67.1% material-cost ratio) persists or reverses.