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Diversification into New Verticals to Drive Growth

CYIENTDL delivered a strong start to FY27, with Q1FY27 revenue and EBITDA growing 34.3% and 56.3% YoY, respectively, while EBITDA margins expanded by ~150bps to 10.5%. The company ended the quarter with a record order book of INR 26.0bn and a healthy book-to-bill ratio of 1.5x, providing strong revenue visibility ahead. While management has refrained from providing specific revenue growth guidance for FY27, it expects order momentum to remain robust, supported by continued growth across the segments. The company is also expanding into AI Data Centres, Robotics and Semiconductor Equipment, leveraging its high-reliability electronics manufacturing capabilities, while its B2S business is expected to support further margin expansion. We estimate FY26-28E revenue/EBITDA/PAT CAGR of 31.4%/38.4%/34.1%, with EBITDA margin expansion of 110bps. We upward revise our earnings estimates by 2.7%/7.7% for FY27/FY28E. Maintained our ‘HOLD’ rating with a TP of INR 635 (INR 532 earlier), based on 38x Mar’28 earnings.

Q1FY27 financial performance:

Sales grew by 34.3% YoY at INR 3.7bn (PLe: INR 3.5bn). Aerospace/Industrial Segment grew by 41%/87% YoY, which contributes 42%/32% to the topline in Q1FY27. EBITDA grew by 56.3% YoY to INR 392mn (PLe: INR 324mn). EBITDA margins expanded by ~150bps to 10.5% (PLe: 9.2%). PBT grew by 120% YoY to INR 222mn (PLe: INR 211mn) driven by a ~29% YoY decline in finance costs due to lower working capital borrowings. However, the benefit was partially offset by a ~94% decline in other income, primarily due to forex losses. PAT grew by 118% YoY to INR 163mn (PLe: INR 156mn). The company is having an orderbook of INR 26bn in Q1FY27 vs INR 21bn in Q1FY26.

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