Cyient DLM shares surge 7% on stellar Q4 report, 'buy' tag from Motilal Oswal

April 24, 2024 / 09:55 AM IST

Cyient DLM's Bengaluru facility is built on a 36,000 sq ft of manufacturing area with main focus on incremental demand from existing customers and enable new opportunities and partnerships. The manufacturing facility in Mysuru will focus on growth in key segments like Medical and Industrial sectors.

Shares of Cyient DLM gained over 7 percent on April 24, a day after the company reported robust earnings for the quarter ended March 2024. Its net profit (PAT) surged 80 percent on-year to Rs 22.7 crore and revenue jumped 30 percent YoY to Rs 361.84 crore, backed by significant traction from the defence, med-tech and aerospace verticals.

According to analysts at Motilal Oswal, being an integrated EMS and solutions provider in the rapidly growing critical end-user industries, Cyient DLM is likely to capture its share of the pie, aided by its strong core competencies and high technical capabilities.

The electric equipment company reported a strong 92.9 percent surge in PAT to Rs 61.2 crore for the entire fiscal (FY24). The firm's EBITDA for FY24 came in at Rs 111 crore, with a margin of 9.3 percent and YoY growth of 26.5 percent.

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The company added two new logos in A&D and bagged key large deals in FY24. It has a strong pipeline of projects for the years ahead. The company also added two facilities in Bengaluru and Mysuru.

Its order book, however, fell 11 percent YoY to Rs 2,170 crore due to lumpiness in the order book conversion, which is expected to be converted in FY25.

Cyient DLM said that the outlook for FY25 "continues to remain strong and it expects strong growth backed by order book and strong relationships with key clients". It also said that it will look to expand its geographical footprint through inorganic expansions.

Also Read | Cyient DLM's profit after tax in FY24 surges 93%

Cyient DLM is a subsidiary of the software service company Cyient. Motilal Oswal expects the company to sustain its growth momentum, supported by a strong order book coupled with healthy order inflows; high customer stickiness; and a strong promoter heritage.

The brokerage reiterated its 'buy' rating on the stock with a target price of Rs 840 (premised on 38x FY26 EPS).

On April 23, Cyient DLM shares closed 2.87 percent higher at Rs 689.00 on the National Stock Exchange (NSE). The stock has rallied 63 percent in the last one year compared to 26 percent rise seen in benchmark Nifty 50.

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