Prabhudas Lilladher's research report on Cyient DLM
We cut our FY25/FY26/FY27E EPS estimates significantly by 31.2%/27.5%/16.8% to factor in low margins given the ECL provision in Q3FY25, M&A expenses, and delay in order inflow from major clients. We have revised TP to Rs692 (Rs831 earlier), based on 30x FY27E earnings. CYIENTDL Q3FY25 EBITDA was much below our estimates due to higher expenses related to M&A and ECL provision, and muted order inflow. The management is in talks for 3 large deals, the benefit of which will be visible from H2FY26. Margins are guided to be flat for FY25, but are expected to improve from H2FY26.
Outlook
We estimate FY24-27E revenue/EBITDA/PAT CAGR of 29.3%/35.0%/44.0%, with EBITDA margin expansion of ~130bps. Maintain ‘BUY’.
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