📊 Cyient DLM Ltd | Broker Report | 𝗕𝗨𝗬 𝗖𝗮𝗹𝗹 🟢
🏢 𝗔𝗰𝗰𝘂𝗺𝘂𝗹𝗮𝘁𝗲 𝗖𝘆𝗶𝗲𝗻𝘁 𝗗𝗟𝗠; 𝘁𝗮𝗿𝗴𝗲𝘁 𝗼𝗳 𝗥𝘀 𝟱𝟰𝟲: 𝗣𝗿𝗮𝗯𝗵𝘂𝗱𝗮𝘀 𝗟𝗶𝗹𝗹𝗮𝗱𝗵𝗲𝗿
📈 𝗥𝗲𝗰𝗼𝗺𝗺𝗲𝗻𝗱𝗮𝘁𝗶𝗼𝗻: BUY
🏛️ 𝗕𝗿𝗼𝗸𝗲𝗿𝗮𝗴𝗲: Prabhudas Lilladher
Cyient DLM: Broker Report
𝗕𝗿𝗼𝗸𝗲𝗿𝗮𝗴𝗲: Prabhudas Lilladher
𝗥𝗮𝘁𝗶𝗻𝗴: ACCUMULATE (Downgraded from BUY)
𝗧𝗮𝗿𝗴𝗲𝘁 𝗣𝗿𝗶𝗰𝗲: ₹546 (₹692 earlier)
𝗥𝗮𝘁𝗶𝗼𝗻𝗮𝗹𝗲: The brokerage firm has downgraded Cyient DLM due to the completion of a domestic defense contract, leading to a decline in the defense segment's revenue. They also cite weaker-than-expected execution and a reduction in the order book. However, the company is optimistic about securing new orders from international clients starting Q2FY26.
- 𝗞𝗲𝘆 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 & 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:
- Revenue increased by 18.3% YoY to ₹4.3 billion (vs. ₹4.9 billion expected).
- Aerospace/Industrial/Medtech segments grew significantly: 56%/84%/270% YoY.
- Rail/Defense segments declined: 41%/43% YoY.
- Q4FY25 order book at ₹19 billion (vs. ₹22 billion in Q4FY24).
- EBITDA grew by 50.9% YoY to ₹574 million; margin expanded by ~290bps to 13.4%.
- Adj. PAT grew by 36.2% YoY to ₹310 million.
- The company expects Q1FY26 to be soft but anticipates a robust order pipeline from FY26 with double-digit margins.
- Secured a production contract from Boeing, starting Q3FY26.
- Strengthened partnership with Deutsche Aircraft.
- Export:domestic ratio expected to shift to 80:20 in FY26.
- 𝗦𝗲𝗴𝗺𝗲𝗻𝘁𝗮𝗹 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 (𝗤𝟰𝗙𝗬𝟮𝟱):
- Aerospace: ₹1.41 billion, up 56.2% YoY
- Defense: ₹1.16 billion, down 43% YoY
- Industrial: ₹599 million, up 84% YoY
- Medtech: ₹1.07 billion, up 269.7% YoY
- Rail: ₹43 million, down 40.9% YoY
- 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗲𝘀:
- FY25-27E revenue/EBITDA/PAT CAGR of 21.1%/31.2%/45.6%.
- EBITDA margin expansion of ~160bps.
- EPS estimates for FY26/FY27E were cut by 23.5%/21.1%.
- 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻:
- Based on 30x FY27E earnings.
- 𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗣𝗼𝗶𝗻𝘁𝘀:
- Management is confident about maintaining a double-digit EBITDA margin in FY26.
- The company is benefiting from reciprocal tariffs implemented by the US.
- EMS industry continues to face supply chain disruptions.