Cyient DLM extends rally, nearly doubles investors' wealth in two days

The stock rallied 20 per cent to Rs 504.90 on the BSE in intra-day trade on Tuesday, and has zoomed 91 per cent against its issue price of Rs 265 per share in two days

Shares of Cyient DLM moved higher by 20 per cent to Rs 504.90 on the BSE in Tuesday's intra-day trade after making a strong market debut on Monday. With today's rally, the stock of the industrial products company has zoomed 91 per cent against its issue price of Rs 265 per share.

At 12:09 PM, Cyient DLM was trading 19 per cent higher at Rs 500.20 on the BSE. In comparison, the S&P BSE Sensex was up 0.78 per cent at 65,853. A combined 12 million shares have changed hands on the NSE and BSE thus far in trade.

On Monday, Nippon India Mutual Fund A/c Power & Infra Fund acquired 500,000 shares of Cyient DLM at a price of Rs 403 per share on the National Stock Exchange (NSE). The names of the sellers, however, were not ascertained immediately.

Cyient DLM is a subsidiary of Cyient. It provides EMS and solutions. The company provides EMS as build-to-print (B2P) and build-to-specification (B2S) services. The core solutions provided by Cyient DLM encompass various key components, including printed circuit board assembly, cable harnesses, and box builds. These components play a crucial role in safety of critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment.

Cyient DLM is a fundamentally strong company, has a strong track record of growth, and is well-positioned to benefit from the growing demand for digital manufacturing solutions, analysts said.

"This offers opportunities for start-ups as well as further expansion for the existing players. Certain companies that have played a big role in moving this industry forward be it defence or civil sector include Hindustan Aeronautics Ltd. (HAL), Bharat Electronics Ltd. (BEL), Mahindra Aerospace, ISRO, Thales, Honeywell, Boeing, Lockheed Martin India, etc. BEL, Thales, and Honeywell are the long-term customers of Cyient DLM," the management said.

Ambitious expansion plans and capacity augmentation of indigenous EMS players to capitalise on favourable policy initiatives ensure that the EMS sector in India will witness heightened growth in coming years, it added.

Cyient DLM has one of the highest margins in the Indian EMS industry. It also has an industry leading order book. Cyient DLM’s position as one of the few EMS companies in India offering electronics solutions for safety and mission-critical applications in highly regulated industries acts as a significant entry barrier to new entrants.