Cyient DLM Ltd. reported a net profit of Rs 16.3 crore for the first quarter of FY27, more than double from the Rs 7.4 crore profit figure reported in the year-ago period, registering a 118.2% year-on-year growth. After the robust June quarter results, domestic brokerage Kotak Securities has revised its stance on electronics manufacturing services firm, downgrading the stock to a 'Sell' rating from its previous 'Reduce' recommendation.
However, the brokerage simultaneously raised its 12-month target price for the stock to Rs 430, up from the earlier Rs 350. The rating change reflects a mix of strong operational delivery balanced against current valuation and segment-specific risks. According to the brokerage note, Cyient DLM delivered in-line quarterly financial results. The core operational strength and robust execution were clearly visible, but the bottom line was effectively offset by lower "other income" during the period.
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Despite the rating downgrade, Kotak Securities noted several underlying positives in the company's operational health:
- Improving Quality: The quality of Cyient DLM's order book has seen notable improvement.
- Healthy Pipeline: The deal pipeline remains robust, indicating continued business momentum and steady demand.
- Execution as the Key Driver: The brokerage highlighted that while current execution is strong, the company's ability to seamlessly deliver on its newer, emerging segments will remain the critical catalyst to watch moving forward.
The company's revenue increased 34.3% year-on-year to Rs 373.8 crore, compared with Rs 278.4 crore in the corresponding quarter last year. Cyient DLM recorded its highest-ever order book at Rs 2,598.9 crore. The company's order intake stood at Rs 551.9 crore, with a book-to-bill ratio of 1.5x, driven by existing and new customers. EBITDA grew 56.2% year-on-year to Rs 39.2 crore, from Rs 25 crore a year ago.
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