Buy Cyient DLM; target of Rs 621: LKP Research

LKP Research's research report on Cyient DLM

Cyient DLM posted a good Q4, with revenue rising 18% YoY, supported by the Altek integration. Margins improved to 13.4% (+290bps YoY), aided by a better product mix and one-off gains, leading to a record-high PAT of ₹310 mn (+37% YoY). For FY25, revenue grew 25% YoY, and margins expanded to 13.4%, with core margins (excluding one-offs) at 9%, reflecting improved efficiency and product mix. While the order book declined 12% YoY to ₹19 bn due to project completions of a major defense order and weak inflows, management remains upbeat, citing a strong pipeline, the addition of six new clients, and expectations of closing several large deals in H1FY26.

Outlook

Despite short-term challenges, Cyient DLM continues to evolve as a leading export-focused EMS player. We revise our estimates and maintain a Buy rating with a revised TP of ₹621(31x FY27E).

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