Cyient DLM (CYIENTDLM) Q3 24/25 earnings summary

Executive summary

• Completed the acquisition and integration of Altek Electronics LLC, USA, for $19.9 million, expanding U.S. manufacturing presence and diversifying sector exposure to industrial and medical segments, with Altek contributing $10.24 million in revenue and $0.63 million in profit before tax since acquisition.

• Q3 FY25 results include Altek for the first time, with synergy discussions and revenue opportunities expected to materialize in coming quarters.

• Added a new global technology client in Q3 and maintained a pipeline exceeding $1Bn in total contract value.

• Recognized with the STPI IT Export Award and Karnataka state award for export and business growth.

• Reported unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2024, reviewed and approved by the Board and auditors without qualification.

Financial highlights

• Consolidated Q3 FY25 revenue reached INR 4,442.36 million, up 38.4% year-on-year; nine-month revenue was INR 10,915.71 million, up 31.5% year-on-year.

• Adjusted EBITDA was INR 359 million (8.1% margin), up 21.9% year-on-year; reported EBITDA was INR 279 million (6.3% margin) after one-time M&A expenses.

• Adjusted PAT was INR 166 million (3.7% margin), down 9.8% year-on-year; reported PAT was INR 108 million (2.4% margin).

• Order backlog stands at INR 21,429 million, including INR 291.5 crores from Altek.

• Free cash flow was positive for the quarter, aided by working capital improvements and Altek's contribution, with consolidated free cash flow at INR 478 million.

Outlook and guidance

• Expecting higher growth in North America due to Altek acquisition and U.S. localization policies, with further growth anticipated in US Defense, Industrial, and Medical sectors.

• Margin improvement anticipated in Q4 as low-margin business ramps down; full-year margin expected to be flat year-over-year, with a target to consistently deliver 10% EBITDA margin.

• Revenue CAGR guidance remains at 30% over the mid-to-long term, though annual variability is expected.

• M&A integration expenses of INR 80 million in Q3 are one-time and not expected to recur.

• First half of next year may be soft, but margin improvement is expected for the full year.