Electronics Manufacturer with Order Book Nearly Half Its Market Cap Reports Robust Q3FY25 Earnings

Revenue growth was driven primarily by the defense, aerospace, and PCBA sectors, while the company reported a robust order backlog of ₹2,142.9 crores

Cyient DLM, a leading electronics system design and manufacturing player specializing in providing system design, integration, testing, and manufacturing services for OEMs in aerospace and defense, among other high-tech engineering segments, today announced strong Q3FY25 earnings.

Consolidated revenue for the quarter reached Rs 444.2 crores, marking an impressive 38.4 per cent year-over-year (YoY) growth. Adjusted EBITDA came in at Rs 35.9 crores (21.9 per cent YoY growth), while reported EBITDA was Rs 27.9 crores, impacted by one-time M&A integration expenses of Rs 8 crores. Adjusted PAT declined 9.8 per cent YoY to Rs 16.6 crores, with reported PAT at Rs 10.8 crores due to these expenses. Adjusted EBITDA margin was 8.1 per cent, while the reported EBITDA margin stood at 6.3 per cent. Adjusted PAT margin was 3.7 per cent, and reported PAT margin was 2.4 per cent. Consolidated Free Cash Flow (FCF) for the quarter reached Rs 47.8 crores.

Key Factors Influencing Performance

1. M&A Integration Expenses: One-time M&A integration expenses of Rs 8 crores adversely impacted the reported EBITDA and PAT. These expenses are non-recurring and are expected to have a limited effect on future performance.
2. Altek Acquisition: The consolidation of Altek Electronics significantly contributed to revenue growth, alongside an increase in employee costs and other operational expenses. This acquisition boosted the company's presence in the Industrial and Med-Tech sectors.
3. Order Backlog: The company reported a robust order backlog of Rs 2,142.9 crores, including Rs 291.5 crores from Altek Electronics.
4. Sectoral Growth: Revenue growth was driven primarily by robust performance in the defense, aerospace, and PCBA (Printed Circuit Board Assembly) sectors. The Rest of the World (ROW) segment saw increased contributions due to higher demand in Aerospace and Defense sectors outside India.
5. Increased Costs: Employee costs and other expenses rose due to the integration of Altek Electronics, reflecting higher operational activity.

Cyient DLM shares closed at Rs 599.90 today, down 0.11 per cent. The stock has delivered a negative 7.93 per cent return in the past year, with a current market capitalization of Rs 4,758 crore and a P/E multiple of 70.6x.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice.