Cyient DLM Q3 impact: Shares of Cyient DLM hit a 52-week low of Rs 522, as they slipped 12 per cent on the BSE in Wednesday’s intra-day trade after reporting 41.7 per cent year-on-year (Y-o-Y) decline in its consolidated profit after tax at Rs 10.8 crore in December quarter (Q3FY25).
The reason for decline was expenses incurred due to acquisition of Altek, resulting in higher employee cost and other expenses and a non-recurring cost of Rs 8 crore allocated to merger and acquisition expense during the quarter.
The company’s revenue rose 38.4 per cent Y-o-Y to Rs 444.2 crore. In terms of segments, this was majorly led by uptick in the defence and aerospace segment, which grew 31 per cent and 14 per cent Y-o-Y, respectively. Acquisition of Altek boosted the revenue of the industrial segment by 47 per cent and the medtech segment by 156 per cent Y-o-Y.
At the operating front, consolidated earnings before interest, tax, depreciation and amortisation (Ebitda) dropped 5.3 per cent Y-o-Y to Rs 27.9 crore from Rs 29.4 crore. Subsequently, Ebitda margin contracted 290 basis points (bps) to 6.3 per cent from 9.2 per cent in Q3FY24.
The company maintains its guidance of a ~30 per cent revenue compound annual growth rate (CAGR) over the next three to five years; however, FY26 consolidated revenue growth would be in mid-teens due to the lack of BEL orders. Ebitda margins may remain flat in FY25, with margin expansion expected after H1FY26.
Also Read
Margin improvement is expected to begin from Q4FY25, ICICI Securities said in a note.
The company’s order book continued its downward trend, down 19 per cent Y-o-Y/6 per cent quarter-on-quarter (QoQ) in Q3 to Rs 1,850 crore (consolidated order book at Rs 2,142.90, including Altek order of Rs 290 crore). Order book growth remains a key concern amid a delay in ordering from some clients; however, the conversion of orders from new clients added over the last few quarters and ongoing discussions with some large global potential customers can boost growth visibility, Motilal Oswal Financial Services (MOFSL) said in the result update.
Going ahead, the brokerage firm expects the growth momentum to slow down in the near term due to the lack of BEL orders and a delay in order flows from existing and new clients. However, the integration of Altek should drive healthy financial performance due to synergy benefits and industry tailwinds. For the medium to long term, the conversion of orders from new clients added over the last few quarters and ongoing discussions with some large global potential customers should boost growth visibility, MOFSL said.
At 09:33 AM, Cyient DLM was trading 11 per cent lower at Rs 528.50, as compared to 0.36 per cent rise in the BSE Sensex. The stock of the smallcap company has fallen below its previous low of Rs 580, touched on June 5, 2024. It corrected 41 per cent from its 52-week high level of Rs 882.90 hit on February 26, 2024.
Cyient DLM is a leading Integrated Electronics Manufacturing Solutions provider that offers Design Led Manufacturing (DLM) solutions across the entire product lifecycle. The company serves customers in diverse sectors including Aerospace & Défense, Industrial, and Medical & Healthcare, with a commitment to driving innovation and value-driven solutions.