Current/ Expected Orderbook/ Pending Orders?

Current order book stands at INR 1,979 crores, showing a sequential decline of INR 147.7 crores due to the fast consumption of one large order. The order book has been lower quarter-on-quarter but is expected to recover as new orders come in. The business experiences lumpiness with gaps between repeat orders, particularly in defense segments. Management is confident of order book improvement and expects traction in the second half of the fiscal year. Order inflows have been sluggish for 8-9 quarters, with a pipeline of INR 8,000 crores, and the company targets filling this pipeline in coming q

Any current/future capex/capital investment/strategic investment?

The company has completed an acquisition of Altek Electronics, a strategic investment to globalize and diversify their business portfolio with presence in the US. They raised about $12 million (approximately INR 100 crores) in borrowing to partially finance this acquisition. There is an ongoing focus on organic growth with investments planned in current operations. Inorganic growth through acquisitions like Altek is a key strategic priority, supported by IPO proceeds which remain to be fully utilized. No specific mention of other immediate or planned capex projects, but they continue i

Future growth expectations in sales/revenue/volumes?

Confident in continued organic growth trajectory for the foreseeable future (Page 17). Order book and order intake are a key focus; confident of filling the order book with large deals soon (Page 17). Expect improvement in order book traction in H2 FY25, with positive trends already visible (Page 10). Volumes have improved in Q2; year-on-year volume improvement expected in upcoming quarters (Page 10). Expansion into new sectors like EV and industrial with new client wins, broadening revenue base (Pages 8 and 15). Inorganic growth through acquisitions like Altek to complement organic

Future growth expectations in earnings/operating earnings/profits/EPS?

The company targets a multiyear organic CAGR of 30% for top and bottom line growth, excluding inorganic growth from acquisitions (Page 13). EBITDA margins are expected to remain flat year-on-year at around high single digits to low double digits in the near term, with a likely double-digit margin by the end of FY25 or FY26 (Pages 6-8, 15). FY25 EBITDA is expected to be close to or slightly improve towards double digits, with steady improvement in margins anticipated due to healthier business mix and cost optimizations (Pages 7-8). Earnings per share (EPS) is expected to be accretive from FY26

Cyient DLM LtdQ2 FY25Aerospace & Defense

Cyient DLM Ltd Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹894P/E: 90.0Market Cap: ₹7.4K CrSector: Aerospace & Defense

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

Confident in continued organic growth trajectory for the foreseeable future (Page 17).
Order book and order intake are a key focus; confident of filling the order book with large deals soon (Page 17).
Expect improvement in order book traction in H2 FY25, with positive trends already visible (Page 10).
Volumes have improved in Q2; year-on-year volume improvement expected in upcoming quarters (Page 10).
Expansion into new sectors like EV and industrial with new client wins, broadening revenue base (Pages 8 and 15).
Inorganic growth through acquisitions like Altek to complement organic growth and globalize business (Pages 3, 17).
Target multiyear organic CAGR of 30%, with inorganic growth additional to this (Page 13).
Margin improvement anticipated as lower-margin large contract concludes; margins likely stable or improving in FY26 (Pages 9, 10).

Margin guidance

Category 3

The company targets a multiyear organic CAGR of 30% for top and bottom line growth, excluding inorganic growth from acquisitions (Page 13).
EBITDA margins are expected to remain flat year-on-year at around high single digits to low double digits in the near term, with a likely double-digit margin by the end of FY25 or FY26 (Pages 6-8, 15).
FY25 EBITDA is expected to be close to or slightly improve towards double digits, with steady improvement in margins anticipated due to healthier business mix and cost optimizations (Pages 7-8).
Earnings per share (EPS) is expected to be accretive from FY26 following the acquisition of Altek, with better profit compared to if the acquisition had not taken place (Page 11).
Improvement in order book and revenue volumes in H2 FY25 is expected to support growth and margin expansion (Pages 9-10).
One-time acquisition-related transaction costs will impact FY25 but are non-recurring (Page 14).

See what Cyient DLM Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

- The company has raised debt primarily for the recent acquisition, with about $12 million (INR 100 crores) borrowing sought for acquisition funding. - Short-term borrowings increased from INR 58 crores to INR 225 crores as a temporary arrangement to fund M&A; long-term debt will increase to replace this short-term debt. - Management expects the debt level to reduce as positive cash flows are generated from the organic business. - No mention of current or future equity fundraising in the provided text. - The total payout for the Altek acquisition is capped at $29.2 million, including earn-outs. - A one-time transaction cost from the acquisition will be reported in Q3. - IPO proceeds related to inorganic growth and corporate purposes remain unutilized as of September 30, 2024, expected to be utilized next quarter. No explicit announcement of new fundraising beyond these points.

Order book

Current order book stands at INR 1,979 crores, showing a sequential decline of INR 147.7 crores due to the fast consumption of one large order.
The order book has been lower quarter-on-quarter but is expected to recover as new orders come in.
The business experiences lumpiness with gaps between repeat orders, particularly in defense segments.
Management is confident of order book improvement and expects traction in the second half of the fiscal year.
Order inflows have been sluggish for 8-9 quarters, with a pipeline of INR 8,000 crores, and the company targets filling this pipeline in coming quarters.
The order book mix is approximately 60% export and 40% domestic but may shift with new business.
Inorganic growth (Acquisition of Altek) will be integrated starting next quarter and will add to order book in the future.

See what Cyient DLM Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

The company has completed an acquisition of Altek Electronics, a strategic investment to globalize and diversify their business portfolio with presence in the US.
They raised about $12 million (approximately INR 100 crores) in borrowing to partially finance this acquisition.
There is an ongoing focus on organic growth with investments planned in current operations.
Inorganic growth through acquisitions like Altek is a key strategic priority, supported by IPO proceeds which remain to be fully utilized.
No specific mention of other immediate or planned capex projects, but they continue investing in capabilities aligned with customer needs and geographic expansion.
A focus on expanding into new sectors such as electric vehicles (EV) and industrial segments suggests possible future investment in those areas.
They aim to maintain growth with continued investments driving organic and inorganic expansion.

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