Cyient DLM’s Q2 FY26 consolidated revenue/Ebitda declined ~20%/1% YoY to Rs 3.1 billion/Rs 312 million. However, Ebitda margins expanded 190bp YoY to 10% (estimate 9.7%), led by a better business mix (higher Aerospace mix of 37%).
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Cyient DLM Ltd.’s revenue decline in Q2 was offset by margin expansion. We expect margin expansion momentum to continue going ahead, driven by an improved product mix and increasing orders of box-build and build-to-spec.
Macro tailwinds such as the end of the Israel-Gaza conflict, opportunities in the EV space, and B2S customer additions will drive growth in the medium term.
For Cyient DLM, we estimate a compound annual growth rate of 14%/27%/37% in revenue/Ebitda/adjusted profit after tax over FY25-28.
We reiterate our Buy rating on the stock with a target price of Rs 550 (27x Sep’27E earnings per share).
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