Motilal Oswal Recommends Investment in Cyient DLM, Sees Target Price of Rs 470

Motilal Oswal Reiterates Buy Rating on Cyient DLM

Cyient DLM's (CYIENTDL) consolidated revenue and EBITDA for the fourth quarter of fiscal year 2026 (4QFY26) declined by approximately 14% and 25% year-over-year (YoY) to INR3.7 billion and INR431 million, respectively. This decline was primarily attributed to a higher base of BEL orders and geopolitical disruptions in West Asia. Additionally, the company's EBITDA margins contracted by 170 basis points (bp) YoY due to operating deleverage.

Key Financial Highlights

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Despite the decline in revenue and EBITDA, Cyient DLM's order book increased by 27% YoY and 3% quarter-over-quarter (QoQ) to INR24.2 billion, driven by an order intake of approximately INR4.4 billion. The company's book-to-bill ratio stood at approximately 1.9x in fiscal year 2026.

Looking ahead, Cyient DLM expects fiscal year 2027 (FY27) to be better than FY26, led by new client additions, improving order book, and high-margin orders. These factors are expected to help the company sustain 4Q-level margins in FY27.

Outlook and Recommendation

For CYIENTDL, Motilal Oswal estimates a compound annual growth rate (CAGR) of 24%, 36%, and 61% in revenue, EBITDA, and adjusted profit after tax (PAT) over FY26-28. Based on this outlook, the research firm reiterates its buy rating on the stock with a target price of INR470 (25x FY28E EPS).

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