Cyient DLM stock surges 13% on strong Q4 show; upbeat FY25 outlook

Earnings impact on Cyient DLM stock price: Stock up 13% after Q4 net zooms 81% in Q4FY24; Stock brokers and company management are upbeat on FY25, FY26 outlook.

Cyient DLM stock price update: Shares of Cyient DLM surged 13 per cent to Rs 779.55 on the BSE in Wednesday's intra-day trade after the company reported robust results for the March quarter (Q4FY24) with profit after tax up 80.7 per cent year-on-year (YoY) at Rs 22.70 crore.

The company's revenue grew 30.5 per cent YoY to Rs 361.80 crore in Q4FY24, fueled by significant traction from the Defense (+78 per cent YoY) and Aerospace (+52 per cent YoY) verticals. However, earnings before interest, taxes, depreciation, and amortization (EBITDA) margin contracted 100 bps YoY to 10.5 per cent, primarily due to the increase in selling, general, and administrative expenses (SG&A) expenses.

Here's what the management said on its Q4 performance:

The management said the robust growth was led by Aerospace and Defence (A&D) segments. Large deals in A&D constitute a major portion of the order book and pipeline and are expected to contribute towards FY25 & FY26 growth.

The management is targeting a 30 per cent revenue CAGR over the next three years with an improving margin trajectory. Cyient DLM's RoCE is likely to reach 15 per cent in a couple of years and ~25 per cent over the next five years. The management is expecting an order win in Q1FY25, which will significantly increase the order backlog. The orders will be from existing as well as new logos added during FY24.

Stock research & brokerages view

Cyient DLM being an integrated EMS and solutions provider in the rapidly growing critical end-user industries, is likely to capture its share of the pie, aided by its strong core competencies and high technical capabilities, according to Motilal Oswal Financial Services. Going forward, the brokerage firm expects the company to sustain its growth momentum, supported by a strong order book coupled with healthy order inflows; high customer stickiness; and a strong promoter heritage.

Analysts at Incred Research Services remain bullish on Cyient DLM’s long-term prospects. Its exposure to the aerospace and defence sector, which is in a multi-year upcycle, will aid its order book growth.

Analysts at JM Financial Institutional Securities said they remain positive on stock mainly due to revenue being positively impacted by - addition of new logos, global tailwinds and increased offering of value added services, margin expansion led by change in mix – increasing share from higher margin segment and customers and higher share of export inorganic expansion on cards – yet to utilise IPO proceed.

About Cyient DLM 

The company is a leading Integrated Electronics Manufacturing Solutions provider that offers Design Led Manufacturing (DLM) solutions to its customers.

At 11:03 am; the stock was trading 6 per cent higher at Rs 729, as compared to 0.5 per cent rise in the S&P BSE Sensex. It had hit a 52-week high of Rs 882.90 on February 26, 2024. The average trading volumes on the counter jumped over 10-fold today. A combined 400,000 shares changed hands on the NSE and BSE so far.