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Target: ₹887
CMP: ₹721.20
Cyient DLM Limited (CDLM) Q4-FY24 quarterly numbers were broadly in line with JMFe. Rev at ₹360 croreup 30 per cent y-o-y driven by growth in defence seg. (78 per cent y-o-y), aerospace seg. (52 per cent y-o-y), and medical seg. (26 per cent y-o-y). However,Industrial seg. saw de-growth (-57 per cent y-o-y and - 15 per cent q-o-q).
Gross margin expanded 30bps YoY at 23.9 per cent led by change in revenue mix. However, EBITDA witnessed decline of 99bps YoY mainly due to investment in team building.
We 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 proceeds.
Based on these factors, we expect Revenue/EBITDA/PAT CAGR of 31/43/60 per cent over FY24-26 with OPM of 9.6/11.1 per cent in FY25/26 and revised earnings y-o-y growth of 63/57 per cent in FY25/26.
We maintain Buy rating with a target of ₹887 (earlier ₹925) at 45x on FY26 EPS
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