Motilal Oswal Maintains ‘Buy’ Rating on Cyient DLM Shares After Q1 Results
India’s IT industry has been going through a significant transformation, driven by the ‘China + 1’ strategy, significant opportunities in the renewable energy space, and new customer additions in the industrial and med tech segments. Against this backdrop, Cyient DLM Limited (Cyient DLM) has been gaining traction, and its latest Q1 results have reinforced the company’s growth momentum.
According to Motilal Oswal, Cyient DLM’s Q1 results were impressive, with revenue growth exceeding expectations. The company’s order book size has also increased significantly, with a current book-to-bill ratio of around 2x. This is expected to maintain a ratio above 1x by the end of FY26.
Motilal Oswal expects the company to continue its growth momentum, driven by its strong order book, improving execution visibility, and increasing revenue growth. The brokerage firm has guided for a revenue CAGR of around 30% over the next five years, which is a significant growth rate.
Despite the high growth expectations, Cyient DLM’s valuation is still relatively reasonable, with a price-to-earnings (P/E) ratio of around 25x. This makes it an attractive investment opportunity for long-term investors.
Motilal Oswal has maintained its ‘Buy’ rating on Cyient DLM shares with a target price of Rs 600, which implies a potential upside of around 25% from the current price.
Overall, Cyient DLM’s Q1 results have reinforced the company’s growth story, and its strong order book and improving execution visibility make it an attractive investment opportunity for long-term investors.
What Drives Cyient DLM’s Growth Momentum?
India’s IT industry has been going through a significant transformation, driven by the ‘China + 1’ strategy, significant opportunities in the renewable energy space, and new customer additions in the industrial and med tech segments. These trends are expected to continue, driving growth for Cyient DLM and other IT companies in the country.
The ‘China + 1’ strategy has led to an increase in demand for IT services, as companies look to diversify their supply chains and reduce their dependence on a single market. This has created significant opportunities for Indian IT companies, including Cyient DLM, which has been gaining traction in this space.
The renewable energy space is another area of significant growth for Cyient DLM, with the Indian government’s ambitious target of reaching 40% of its power generation capacity from non-fossil fuels by 2030. This has led to an increase in demand for IT services in the renewable energy sector, which Cyient DLM is well-positioned to capitalize on.
New customer additions in the industrial and med tech segments have also been a key driver of growth for Cyient DLM. The company’s strong order book and improving execution visibility make it an attractive investment opportunity for long-term investors.
What are the Key Takeaways from Cyient DLM’s Q1 Results?
Cyient DLM’s Q1 results were impressive, with revenue growth exceeding expectations. The company’s order book size has also increased significantly, with a current book-to-bill ratio of around 2x. This is expected to maintain a ratio above 1x by the end of FY26.
Motilal Oswal expects the company to continue its growth momentum, driven by its strong order book, improving execution visibility, and increasing revenue growth. The brokerage firm has guided for a revenue CAGR of around 30% over the next five years, which is a significant growth rate.
Cyient DLM’s valuation is still relatively reasonable, with a price-to-earnings (P/E) ratio of around 25x. This makes it an attractive investment opportunity for long-term investors.
Conclusion
Cyient DLM’s Q1 results have reinforced the company’s growth story, and its strong order book and improving execution visibility make it an attractive investment opportunity for long-term investors. With a ‘Buy’ rating from Motilal Oswal and a target price of Rs 600, Cyient DLM shares offer a potential upside of around 25%. We believe that this is a great opportunity for investors to get exposure to the Indian IT industry and benefit from its growth trajectory.
