Cyient DLM shares fell 3.5 percent on July 23, as investors rushed to book profits a day after the company reported stellar earnings for the April-June quarter, which saw its net profit nearly double on year.
At 09.23 am, shares of Cyient DLM were trading at Rs 740.40 on the NSE.
The company's net profit grew over 98 percent on year to Rs 10.50 crore in Q1 of FY25, up from Rs 5.30 crore in the same quarter of the previous fiscal. Its revenue from operations rose 18.7 percent to Rs 257.8 crore against Rs 217.1 crore in the year ago period.
The growth was driven by a robust performance from the company's defence and aerospace segments, which offset the weakness in the industrial vertical. The medtech as well as printed circuit board assembly (PCBA) business also delivered steady growth in Q1, further aiding the topline.
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Moreover, Cyient DLM also added four new global clients to its portfolio: a leading semiconductor company in electronic manufacturing, a transfer project from a major global defense OEM, a medtech company developing diagnostic equipment for the international market, and a large defense and aerospace company.
Despite that, the company's orderbook fell 15 percent on year in Q2, but the management stated that large deals in the pipeline were at advanced stages and hence they expect the order backlog to be build up in H2FY25.
JM Financial also maintains a positive outlook on Cyient DLM citing several key factors like the addition of new clients, favorable global market conditions, and an expanded range of value-added services are boosting revenue.
Additionally, the brokerage expects margin expansion as the company shifts towards higher-margin segments and customers, with an increasing share of exports. "Furthermore, the potential for inorganic growth remains strong, as Cyient DLM has yet to utilize its IPO proceeds, which could drive further expansion," JM Financial stated.
Factoring these positives, JM Financial also raised its price target for the stock by 26 percent to Rs 910, while retaining a 'buy' call.
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