Cyient DLM shares slide 12% after profit, margin decline in Q3

Cyient DLM

Shares of Cyient DLM fell 12 percent on January 22 after the company reported a sequential decline in its consolidated net profit and margin for the December quarter.

At 9:35 AM, the stock was trading 10 percent lower at Rs 533. Over the past year, the stock has declined 18 percent, significantly underperforming the Nifty 50, which registered a 3 percent drop during the same period.

Cyient DLM's consolidated net profit for the December quarter plunged nearly 30 percent sequentially and 40 percent year-on-year to Rs 11 crore. The company's EBITDA margin shrank to 8.1 percent compared to 9.2 percent in the same quarter last year.

Employee costs and other expenses of Cyient DLM were higher due to the consolidation of Altek Electronics, Inc., an EMS company specializing in PCB assemblies, box builds, and cable harnesses, with ITAR certification.

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Motilal Oswal Financial Services revised its target price for the stock to Rs 7,500-Rs 8,000, while retaining its 'Buy' rating. "We downgrade our earnings by 3%/4%/5% for FY25/26/27 and revise our valuation multiple downwards from 70x to 65x on two-year forward earnings to bake in a slower pickup in inflows vs. our earlier expectations," the brokerage said.

On a positive note, the company's revenue from operations increased to Rs 444.2 crore in Q3FY25, up from Rs 321 crore in the year-ago period and Rs 389.4 crore in the previous quarter. Its EBITDA also rose to Rs 35.9 crore in Q3FY25, compared to Rs 29.4 crore a year earlier and Rs 31.6 crore in the previous quarter.

Cyient DLM is an electronics system design and manufacturing company that offers design, integration, testing, and production of electronic components and subsystems for original equipment manufacturers (OEMs). It serves industries such as aerospace, defense, and other high-tech engineering segments, with a customer base spanning India, Europe, North America, China, and Japan.

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