Target:₹851
CMP: ₹720.15
Cyient DLM is an integrated EMS company which is one of the most emerging sectors with a focus on the entire life cycle of a product. The company has over three decades of rich experience in developing high-mix, low-to-medium volume of highly complex systems and is a qualified supplier to major global OEMs in aerospace & defence, industrials, and medical technology.
Cyient DLM’s unique sub segments create entry barrier, high customer stickiness, necessary capacity to support growth, strategically bolstering competitive advantage along with strong parentage (promoter – Cyient Ltd) with global presence provides an edge over its peers. The company is placed in an exciting Indian EMS space which is at a nascent stage (0.6 per cent of GDP in 2022) foreseeing longer tenure and offers huge growth potential.
Over the next 2-3 years, Cyient DLM anticipates substantial revenue growth driven by various factors, including a strong order book valued at about ₹2,200 crore while the pipeline looks strong with strong order inflow expected in FY25. Additionally, strong customer loyalty is expected to enhance revenue visibility, while the company’s current capacities are poised to meet a significant portion of its order book.
Key Risks: High concentration of orders, delay in key government programs in the space and defense sectors due to fiscal constraints, and high working capital requirement