Cyient DLM Q2 net profit rises 5.4%, margin declines. Share trades lower by 6%

In the second quarter of FY25, Cyient DLM’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 34.4% YoY to ₹31.6 crore. The EBITDA margins during the quarter expanded by 5 basis points YoY to 8.1%. Meanwhile, the net profit margin contracted by 105 basis points YoY to 4%.

Cyient DLM stated that employee costs and other expenses were higher during the quarter due to planned investments in selling & general administrative expenses (SG&A) and manufacturing overheads.

During the quarter, the company reported that its defense segment grew by 82% YoY while the aerospace segment saw a 20% YoY rise. The industrial segment’s revenue share was lower by 55% YoY due to lower demand from a key customer.

Cyient DLM stated that the printed circuit board assembly (PCBA) business saw expansion across various industry segments and clocked in growth of 57% YoY. The box build category was up 17% YoY.

The company saw higher contributions in the business through exports due to higher demand for aerospace and defense customers outside of India. Meanwhile, 54% of the domestic revenue is majorly contributed through the defense segment.

In Q2FY25, Cyient DLM acquired Altek for an upfront payment of $23.4 million. The maximum estimated payout is set at $29.2 million. The company expects the acquisition to result in double-digit EBITDA and a return on capital employed (ROCE) of more than 15%. The impact of the acquisition on revenues is expected to reflect from Q3FY25.

The company is looking to enter into growing industries like electric vehicles and expand into growing EMS destinations.

Shares of the company have declined by nearly 0.43% since the beginning of the year. The stock has lost over 0.70% in the past year.