Cyient DLM: Maintain Hold Rating, Target Price Rs 370

Cyient DLM's Q4FY26 Performance Disappoints, But Strong Order Book Offers Hope for Recovery-Led Growth in FY27

Prabhudas Lilladher's research report on Cyient DLM has highlighted a soft performance in Q4FY26, marked by a contraction in margins. Despite this setback, the company has recorded an impressive order book of Rs24.2bn and a healthy book-to-bill ratio, providing strong revenue visibility for the future.

The company's Q4 revenues were impacted by geopolitical disruptions in West Asia, supply chain delays, and pending customer approvals. However, a part of this is expected to be recognized in FY27, offering a glimmer of hope for the company's prospects. Cyient DLM remains well-positioned for a recovery-led growth in FY27, backed by strong order momentum and structural demand tailwinds across key segments.

Revenue and Earnings Estimates

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Our estimates for Cyient DLM's performance over the next two years (FY26-28E) suggest a compound annual growth rate (CAGR) of 30.0% for revenue, 30.5% for EBITDA, and 29.2% for PAT. However, we expect the EBITDA margin to remain flat. In light of this, we have cut our earnings estimates by 13.6% for FY27E and tweaked our estimates for FY28 mainly due to lower growth in revenue.

Ratings and Target Price

Following the uptick in share prices, we have downgraded our rating on Cyient DLM to 'HOLD' from Accumulate. Our target price for the company stands at Rs370, which is higher than our previous estimate of Rs327. This revised target price is based on 24x Mar'28 earnings.

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