Cyient DLM tanks 19% on huge volumes post Q2 results; here's why

Cyient DLM's Q2 earnings showed that execution was slightly impacted by supply chain lead times and margins were softer while the order book was strong.

Cyient DLM share price movement

 

Cyient DLM's share price tanked 19 per cent to ₹830.35 on the BSE in Friday's intraday deals on profit booking after the company reported a mixed set of September quarter (Q2FY27) results. Earnings showed that execution was slightly impacted by supply chain lead times and margins were softer while the order book was strong.

 

At 09:19 AM, Cyient DLM quoted 14 per cent lower at ₹877.95, compared to a 0.25 per cent decline in the BSE Sensex. A combined nearly 660,000 shares changed hands in first four minutes of trade on the NSE and BSE.

 

Share price of Cyient DLM hit a record high of ₹1,060.10 on Wednesday, October 14, 2026. The stock zoomed 300 per cent from its 52-week low of ₹264.95 touched on March 30, 2026.

 

 

Why was Cyient DLM's share price under pressure?

 

Cyient DLM reported mixed results: execution was slightly impacted by supply chain lead times; margins were softer while the order book was strong. Revenue came in at ₹393 crore up 26.5 per cent year-on-year (YoY) and 5.2 per cent quarter-on-quarter (QoQ). The Aerospace and Industrials segment reported robust growth of 61 per cent YoY and 31 per cent YoY to ₹185 crore (47 per cent of business) and ₹122 crore (31 per cent of business) respectively. Defence and Medtech reported a modest growth of 11 per cent YoY to ₹28 crore and ₹55 crore respectively. 

 

Gross margins came in at 37.4 per cent down 380 bps YoY and 53 bps QoQ. Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at ₹34.2 crore with EBITDA margins dipping 135 bps YoY to 8.7 per cent due to increased employee costs related to sales & marketing and one-off raw material expense for developmental orders. Reported profit after tax (PAT) grew 5.8 per cent YoY at ₹34 crore.

 

Brokerages view on Cyient DLM

 

Revenue visibility strengthened, with the order book increasing to ₹2,814 crore, up by ₹215 crore in Q2FY27. Further, the Build-to-Spec order pipeline stands at $1 billion (40 per cent historical win rate), which is expected to support revenue growth beyond FY30, ICICI Securities said in a note.

 

The company is already executing programmes in semiconductor capital equipment, with management expecting a revenue ramp-up over the coming quarters. AI data centres and robotics represent emerging growth opportunities, with the company exploring opportunities in high-reliability manufacturing and related solutions; commercial traction in these segments remains at an early stage. Besides, the company suggested that the majority of investments are done and operating leverage shall play out, especially from FY28 onwards, the brokerage firm said.

 

Analysts at Motilal Oswal Financial Services (MOFSL) believe Cyient DLM’s growth story remains on track, supported by a record order book of ₹2,810 crore (+23 per cent YoY); continued aerospace momentum and a rising box-build contribution (37 per cent in Q2FY27 vs. 25 per cent in Q2FY26). However, upfront growth investments will keep FY27 EBITDA margins in the range of 9-10 per cent. 

 

The sales and marketing platform is now in place to support a larger revenue base, positioning the company for operating leverage and double-digit margins from FY28. Beyond this, four Electronic Products programs worth a potential $1 billion over 7–9 years offer a substantial growth opportunity from FY30, the brokerage firm said.

 

Near-term margin pressure reflects upfront investments in sales, marketing and product development, with development costs fully expensed rather than capitalized. Revenue growth and better cost absorption should support margin recovery from FY28, progressing from the core business margin framework of 9–11 per cent toward 11–13 per cent as the company scales into adjacent segments. A rising contribution from Electronic Products and differentiated platforms could further lift margins to 13–18 per cent from FY30 onward, it added.

 

Factoring in revised EBITDA margin assumptions, analysts at MOFSL cut earnings estimates by 16 per cent for FY27 while maintaining its FY28/FY29 earnings estimates. The brokerage firm expects a compound annual growth rate (CAGR) of 30 per cent/41 per cent/63 per cent in revenue/EBITDA/adjusted PAT over FY26-29. Analysts reiterate a 'BUY' rating on the stock with a target price of ₹1,320 (based on 50x Sep’28 EPS, implying a 0.8x PEG ratio). Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.