Cyient DLM (CYIENTDL) reported a strong quarter, with revenue growth of ~33% YoY in 2QFY25, led by significant traction in the defense (up 82% YoY) and aerospace (up 20% YoY) verticals. Margins were flat YoY at 8.1%. However, the order book continued its downward trend, with 13% YoY/ 7% QoQ decline in 2Q to INR19.8b. The management indicated the trend will change in 4Q, with a healthy order pipeline and the finalization of key deals. We believe the order book will witness an uptick in 4QFY25, factoring in the conversion of orders from new client additions happened over the last few quarters.
OutlookWe estimate CYIENTDL to report a CAGR of 38%/51%/64% in revenue/ EBITDA/ Adj. PAT over FY24-27E. We retain our BUY rating on the stock with a TP of INR870 (35x FY26E EPS).
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