Cyient DLM Shares Rise After Brokerage Upgrade and Bulk Deal by Motilal Oswal

Shares of Cyient DLM rose over 8% in trade on March 28, driven by two key developments: Kotak Institutional Equities upgraded its rating on the stock, and Motilal Oswal acquired 5.3 lakh shares in a bulk deal during the previous session.

Despite the stock's recovery, Kotak revised its rating from 'Sell' to 'Reduce', citing the sharp correction in price. However, it also cut the fair value estimate to Rs 440 from Rs 560 earlier, suggesting tempered expectations for future performance.

Kotak’s Outlook: FY2026 Growth Revised Downward

Kotak Institutional Equities expects a muted start to FY2026 for Cyient DLM due to:

Weak domestic revenue post-BEL order completion

Delays in order finalization by US clients amid tariff uncertainty

Modest export growth despite European defense potential

Revenue growth projection for FY2026 has been slashed to 5%, down from an earlier estimate of 32%.

Key Market Trends by Geography

Europe:
Cyient DLM is well-positioned to benefit from rising defense spending through clients like Thales, Safran, and BAE. Kotak expects this to support moderate growth through new defense orders.

USA:
The company has been included in major programs from Honeywell Anthem and Micro VCS, with potential recovery expected from ABB. However, Boeing-linked orders remain soft due to ongoing program delays.

India:
With BEL orders nearing completion and no significant new tenders, Kotak predicts weak domestic demand through the first half of FY2026. Around 39% of FY2024 revenue came from the domestic market, which is expected to shrink in the near term.

Watchlist for Investors

Kotak notes the following as key monitorables:

Ramp-up of new client orders

Integration and performance of Altek acquisition

Addition of new clients and contract wins

At 3:05 PM, Cyient DLM shares were trading at Rs 458.6, up 2.8% on the NSE.

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