Analysts cautious after Cyient DLM big-bang listing spins bumper gains

Thanks to the high demand, it was expected that the issue will list at a strong premium.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Cyient DLM, as expected, made an impressive debut with a bumper listing on July 10 but analysts have cautioned new investors against buying the stock and said those who got the shares should hold them for the long term.

The subsidiary of IT firm Cyient listed at a premium of 52 percent. The stock rose further to trade at Rs 406.85, up 54 percent from the issue price of Rs 265.

“Considering the policy tailwinds for the EMS sector, Cyient DLM’s focus towards highly regulated sectors, robust order book and strong parentage, we recommend investors to remain invested in the counter,” said Rajnath Yadav, Senior Analyst, Choice Broking.

Getting pricey

The sharp jump in the share price has lifted the valuation. The issue was available at the upper price band of Rs 265 at P/E of 34x but now it has risen to almost 50x, which is expensive and hard to sustain, analysts said.

“Given the high premium, we do not recommend buying Cyient DLM shares on the listing day, however, existing investors can hold the shares for the long term, as the company has good growth prospects,” said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart Ltd.

Follow our live blog for all the market action

The company raised Rs 592 crore from the initial public offering, which was subscribed 67.31 times. Qualified institutional buyers led the charge, buying 90.44 times their allotted quota. The portions set aside for retail investors and high net-worth individuals were subscribed 49.22 times and 45.05 times.

“We recommend to book partial profit and hold partial allotment as the company has the ability to provide integrated engineering solutions with capabilities across the product value chain,” said Astha Jain, Senior Research Analyst at Hem Securities.

“Also there are high entry barriers for the company’s competitors due to technical expertise, capabilities in safety-critical electronics in highly regulated industries and customer engagement.”

Cyient DLM provides electronics manufacturing services as build-to-print (B2P) and build-to-specification (B2S) services and solutions comprising printed circuit board (PCB) assembly, cable harnesses, and box builds (systems integration), through its three manufacturing facilities in Mysuru, Hyderabad and Bengaluru.

Being a supplier to global original equipment manufacturers in the aerospace and defence, medical technology and industrial sectors, the company has long-term relationships with marquee customers such as Honeywell International Inc, Thales Global Services, ABB Inc, Bharat Electronics and Molbio Diagnostics. Its orderbook stood at Rs 2,432.5 crore by the end of FY23.

Narendra Solanki, Head- Equity Research at Anand Rathi Shares & Stock Brokers, advised patient investors to remain invested in the stock as there is “a long runway for growth.”

(Sunil Shankar Matkar contributed to the story.)

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.