Hold Cyient DLM Ltd For Target Rs.370 by Prabhudas Liladhar Capital Ltd
Robust Pipeline & B2S Momentum to Drive FY27 Growth
Quick Pointers
* Q4 revenue impacted by West Asia issues & supply delays.
* Robust order book of Rs24.2bn in Q4FY26.
CYIENTDL reported soft performance in Q4FY26, with margin contraction. The company has recorded an order book of Rs24.2bn and a healthy book-to-bill ratio, providing strong revenue visibility ahead. While revenues in Q4 were impacted by geopolitical disruptions in West Asia, supply chain delays and pending customer approvals, a part of this is expected to be recognized in FY27. CYIENTDL remains well positioned for a recovery-led growth in FY27, backed by strong order momentum and structural demand tailwinds across key segments. We estimate FY26-28E revenue/EBITDA/PAT CAGR of 30.0%/30.5%/29.2%, with flat EBITDA margin. We cut our earnings estimates by 13.6% for FY27E and tweak our estimates for FY28 mainly due to lower growth in revenue. We downgraded our rating to ‘HOLD’ from Accumulate due to uptick in the share prices with a TP of Rs370 (Rs 327 earlier), based on 24x Mar’28 earnings.
Q4FY26 financial performance: Sales declined by ~14% YoY to Rs 3.7bn (PLe: Rs4.3bn). Aerospace/Industrial/Railway segment grew by ~2%/72%/72% YoY, whereas its Defense segment declined by 68% YoY due to large order completion and Med tech segment declined by ~28% YoY. Aerospace/Industrial/Medtech segment contributes 39%/28%/21% to the revenue in Q4FY26. EBITDA declined by 25.0% YoY to Rs 431mn (PLe: Rs 407mn). EBITDA margins contracted by ~170bps to 11.7% (PLe: 10.0%). PBT declined by 24.0% YoY at Rs 317mn (PLe: Rs 296mn). PAT declined by 23.0% YoY to Rs 239mn (PLe: Rs 222mn). The company is having an orderbook of Rs 24bn in Q4FY26 vs Rs 19bn in Q4FY25.
FY26 financial performance: Sales declined by 17.0% YoY to Rs 12.3bn. Aerospace/Industrial/Medtech/Railway segment grew by ~26%/111%/4.2%/364% YoY and Defense segment declined by ~84% YoY due to large order completion in Q4FY25. Aerospace/Industrial/Medtech segment contributes 38%/26%/20% to the revenue in FY26. EBITDA declined by 5.1% YoY to Rs 1.3bn. EBITDA margins expanded by ~100bps to 10.3%. PBT grew by 1.6 YoY to Rs 932mn. Adj. PAT grew by 7.6% YoY to Rs 733mn.
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