Shares of Cyient DLM, an engineering research and development (ER&D) company, surged by up to 5.21% to Rs 704 per share on the BSE. This rise in share price followed a bulk deal where HDFC Mutual Fund (MF) increased its stake in the company. Additionally, the shares of its parent organisation, Cyient, saw an intraday increase of 2.67% on the BSE.
HDFC MF’s strategic investment
HDFC MF purchased 4 lakh shares of Cyient DLM on the NSE at Rs 667 per share, totalling an approximate value of Rs 26.68 crore. The fund’s decision to increase its stake comes after Morgan Stanley sold 4.34 lakh shares of Cyient DLM for Rs 29 crore. This strategic investment by HDFC MF highlights its confidence in the company’s growth potential and has positively impacted investor sentiment.
For those involved in share market investment, the involvement of a major institutional player like HDFC MF can be a key signal of a company’s growth prospects. Such moves often generate increased interest in the stock, as reflected in Cyient DLM’s recent price surge.
Cyient DLM’s strong financials
Cyient DLM, a subsidiary of Cyient, offers comprehensive electronic manufacturing solutions to a range of sectors, including medical, automotive, defence, and aerospace. The company’s Q1FY25 financial performance further underscores its potential. Net profit surged by 97.76%, reaching Rs 10.6 crore, and revenue from operations increased by 18.76% to Rs 257.89 crore compared to Q1FY24.
Profit before tax also rose by 102.72%, demonstrating the company’s strong financial footing. However, the EBITDA margin fell slightly to 7.8% from 9.2% in the same period last year, despite EBITDA remaining unchanged at Rs 20 crore.
Share market performance and outlook
Since its listing on July 10, 2023, Cyient DLM has delivered an impressive 165.6% return to investors, compared to its issue price of Rs 265. The company’s shares are trading at a price-to-earnings ratio of 79.79 times, with an earnings per share of Rs 8.39. Its total market capitalization now stands at Rs 5,538.74 crore.
For investors considering share market investment, Cyient DLM’s continued growth, coupled with increased institutional interest, presents an attractive opportunity. The recent boost in its stock price following HDFC MF’s increased stake reinforces the company’s strong outlook in the ER&D sector.
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