Cyient DLM Q2 Results - Motilal Oswal Retains 'Buy' Rating On The Stock; Here's Why

Motilal Oswal Report

Cyient DLM Ltd. witnessed strong revenue growth during the quarter, led by robust traction in the defense segment, while margins remained flat. Going ahead, the growth is likely to accelerate with H2 being seasonally strong for the company. This, coupled with the integration of Altek, will lead to strong financial performance from the company.

In the medium term, we expect Cyient DLM to sustain its growth momentum, aided by:

1. expected healthy order inflows (from Q4 FY25 onward);

2. integration and synergy from the Altek acquisition.

We estimate Cyient DLM to report a CAGR of 38%/51%/64% in revenue/ Ebitda/ adjusted profit after tax over FY24-27E. We retain our Buy rating on the stock with a target price of Rs 870 (35 times FY26E earnings per share).

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