Cyient DLM — Q1 FY27 earnings call

Call held 21 Jul 2026

Management summary

Cyient DLM reported a strong Q1 FY27, with robust revenue growth of 34.3% YoY to INR 373.8 crores and a significant 56.2% YoY increase in EBITDA to INR 39.2 crores, driven by improved execution and demand. The company achieved a record order book of INR 2,598.9 crores and maintained a healthy book-to-bill ratio of 1.5x, indicating strong future visibility. While profitability metrics showed strong year-on-year improvement, working capital days and inventory days increased sequentially, leading to negative free cash flow.

Highlights

  • Revenue of INR 373.8 crores, reflecting a robust 34.3% year-on-year growth.

  • EBITDA increased to INR 39.2 crores, registering a strong 56.2% year-on-year growth.

  • EBITDA margin improved to 10.5%, representing an expansion of 147 basis points year-on-year.

  • Profit after tax was INR 16.3 crores, more than double compared to the corresponding period last year with a 118.2% year-on-year growth.

  • Record order backlog of INR 2,598.9 crores, the highest ever order book level achieved.

  • Strong order inflow for the quarter, resulting in a robust book-to-bill ratio of 1.5x.

  • Diversification with two new logos added across industrial and automotive segments.

  • Expansion of build-to-specifications lab from 6,000 sq ft to 15,000 sq ft.

Concerns

  • Inventory days outstanding increased to 162 days in Q1 FY27 compared to 153 days in Q4 FY26.

  • Net working capital days stood at 161 days in Q1 FY27 compared to 145 days in Q4 FY26.

  • Negative free cash flow due to higher inventory and lesser customer advances.

Key financials

  1. Revenue ₹373.8 Cr +34.3%YoY
  2. EBITDA ₹39.2 Cr +56.2%YoY
  3. EBITDA Margin 10.5%
  4. PAT ₹16.3 Cr +118.2%YoY
  5. PAT Margin 4.4%
  6. Order Book ₹2,598.9 Cr +7.6%QoQ
  7. Order Inflow ₹551.9 Cr
  8. Net Working Capital Days 161 days

What they filed

Q1 FY27: revenue up 34.5%, net profit up 128.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue389 444 428 278 311 −20%303 −32%369 −14%374 +35%
EBITDA32 28 57 25 31 −3%28 +0%43 −25%39 +56%
Net profit15 11 31 7 32 +113%11 +0%22 −29%16 +129%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Aerospace
    42% Revenue Share40% YoY Growth
  • Industrial
    32% Revenue Share90% YoY Growth
  • Defence
    9% Revenue Share35% YoY Growth
  • MedTech
    16% Revenue Share0% YoY Growth
  • Auto and others
    1% Revenue Share
  • PCBA
    48% Product Share21% YoY Growth
  • Box build
    21% Product Share85% YoY Growth
  • Mechanical and others
    10% Product Share
  • Cables
    1% Product Share
  • Rest of the World
    94% Geographic Share
  • India
    6% Geographic Share

Order book

high confidence

Total value

₹2,598.9 Cr

as of 2026-06-30 quantified

7.6% QoQ

Inflow this quarter

₹551.9 Cr

Execution

good visibility for revenue execution in coming quarters

Pipeline

deal pipeline tcv

Pipeline includes aerospace & defence (~48%), industrial & semiconductor equipment (~40%), and balance from medical and automotive. Management stated pipeline is 'more than' INR 4000 crores.

The company closed the quarter with the highest ever order book in its history, providing strong revenue visibility and reaffirming customer confidence. Order inflow remained extremely strong, resulting in a robust book-to-bill ratio of 1.5x, with no lumpy one-off orders.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex ₹654.15 Cr
    whatever we have today, closely around 1.75x to 2x of the revenue. So, we don't need any such additional capex apart from a regular annual capex, which we'll be working out for our running the business.
  • Debt Debt disclosed
    • Repayment Finance costs reduced by 29% year-on-year owing to lower working capital borrowings.
    Importantly, finance costs reduced by 29% year-on-year owing to lower working capital borrowings.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · FY27 to FY29 · High confidence 11% to 13%
    We take the capabilities we have already proven and extend them into two new industries: robotics and Al data centre, taking us from four industries to six. Because we are leveraging the same core stack into higher value sectors, margins step up roughly to 11% to 13%.

    — Rajendra Velagapudi

  • EBITDA Margin Profitability · FY30 and beyond · High confidence 13% to 18%
    This is where we build a product and platform moat. We stay across our six industries but layer in expanded B2S products and new platforms. This is the shift from being a service provider to owning product and intellectual property and that's what lifts margins to roughly 13% to 18%.

    — Rajendra Velagapudi

  • Additional Margins from B2S Profitability · When B2S opportunities are realized · High confidence 250 bps to 300 bps
    you will be getting additional 250 bps to 300 bps additional margins when we have a consolidated EBITDA margin due to the B2S opportunities.

    — R. M. Subramanian

Order Book

  • Book-to-Bill Ratio Order Book · FY27 · High confidence 1.5x
    So, book-to-bill ratio will be at the same thing where we are today at 1.5x. So, we will be at that number for the year too.

    — Rajendra Velagapudi

Revenue

  • Revenue Growth Momentum Revenue · Q2 and going forward · Medium confidence Similar momentum
    I mean in terms of the Q2 and going forward, we will be seeing a similar momentum in the range, okay? So, we do not see any of the major concern on the momentum in terms of our revenues and order intakes.

    — Rajendra Velagapudi

  • B2S Revenue Contribution Revenue · Next one year to 18 months · Medium confidence Substantially good revenues
    So probably you will be seeing. I mean we already started having some revenues coming from them in the B2S. So, we will be seeing it substantially a good revenues from them in the next one year to 18 months.

    — R. M. Subramanian

  • Revenue from AI/Data Center/Robotics Revenue · Next 6 to 12 months · Medium confidence Growth coming in
    No, I think we will be seeing some of the growth coming in in that area, so over the next 6 to 12 months we will be seeing more of the revenue growth which probably in turn will also give us some leverage in terms of the margins there.

    — Rajendra Velagapudi

  • Growth from Honeywell Aerospace Revenue · Next 18 months · Medium confidence Big growth
    So that's where we'll be seeing a big growth coming from the Honeywell Aerospace, so I think we had, I mean, we have a very good engagement with them at various levels. And that account and you also said about the Thales, I think both of the accounts is where we'll be seeing an extraordinary growth in this year.

    — Rajendra Velagapudi

What to watch in Q2 FY27

AI/Data Center/Robotics Segment Updates

Next 1-2 quarters
Current Early stage, sales directors on board
Target Updates on focus areas and momentum

Why it matters

This is a new strategic growth area with potential for higher margins; updates will indicate progress.

I think we will be probably giving some updates in the next 1 or 2 quarters about where we are focusing and where are we today in terms of our momentum in AI and data centers.

Risks & concerns

  • Geopolitical uncertainties and supply chain disruptions (Middle East developments)

    medium

    The quarter was marked by continued geopolitical uncertainties, evolving demand patterns and disruptions across global supply chains, including the ongoing developments in the Middle East that added further complexity to the operating environment. Proactive planning helped mitigate impact in Q1.

    Management acknowledged

  • Increased inventory days and net working capital days leading to negative free cash flow

    medium

    Inventory days outstanding increased to 162 days (Q1 FY27) from 153 days (Q4 FY26), and net working capital days rose to 161 days (Q1 FY27) from 145 days. This is a strategic investment for growth and execution, with cash flow expected to turn positive once inventory is controlled.

    Management acknowledged

Q&A highlights

7 direct
Impact of West Asia crisis and Israeli orders Direct
on the West Asia crisis, yes, I think it is still there, going on, but as earlier I think Krishna also pointed in terms of our planned execution and ensuring that we will be keeping some of the inventory for a longer run, I think those are the things really helped us to overcome the current challenges what we have in the West Asia crisis.

Addresses geopolitical risks and supply chain resilience, confirming proactive measures helped mitigate impact in Q1 and plans for Q2.

Asked by Gaurav Shukla

Entry into AI data center and robotics segments Partial
I think we just started this thing. We have our sales directors on board in this quarter. I think we will be probably giving some updates in the next 1 or 2 quarters about where we are focusing and where are we today in terms of our momentum in AI and data centers.

Highlights new strategic growth areas and indicates future updates, suggesting it's a key focus for expansion.

Asked by Vipraw Srivastava

Timeline for AI/Data Center/Robotics impact on P&L Direct
No, I think we will be seeing some of the growth coming in in that area, so over the next 6 to 12 months we will be seeing more of the revenue growth which probably in turn will also give us some leverage in terms of the margins there.

Provides a timeline for revenue and margin contribution from new strategic segments.

Asked by Vipraw Srivastava

MedTech segment growth and pipeline Direct
I think the Med Tech is where we have some seasonal impact in terms of one of our customers right now, which is there. And in terms of the growth for the Med Tech, yes, I mean, we do not see any of the concern. We have the pipeline which is available right now in our sales pipeline. We already have some of the opportunities in that particular sector. So, we do not see a challenge anything in terms of the Med Tech there right now.

Clarifies reasons for flat MedTech growth and reassures about future pipeline, indicating it's a temporary seasonal effect.

Asked by Shubhi Gupta

Negative operating cash flow and working capital normalization Direct
the negative free cash flow is essentially coming up from higher inventory and lesser customer advances. And we have talked about it earlier as a company, we are growing, and we need to keep making sure that the growth is well set in terms of inventory because inventory is something what we need to do as a leading indicator.

Explains the reason for negative cash flow and links it to strategic inventory build-up for growth, indicating it's a planned investment.

Asked by Praveen Sahay

B2S platform revenue contribution and margins Direct
So, we will be seeing it substantially a good revenues from them in the next one year to 18 months. That is what we will be seeing the revenues. And in terms of margins, as you said, the overall when you just look at the combined one, you will be getting additional 250 bps to 300 bps additional margins when we have a consolidated EBITDA margin due to the B2S opportunities.

Provides specific timelines and margin uplift expectations from the B2S segment, a key part of their 'transform' strategy.

Asked by Praveen Sahay

Aerospace segment growth strategy and key customers Direct
I think we are as probably I just mentioned earlier, so we are very well placed on the Aerospace side. I think Honeywell, we just mentioned about some of the big work which we had won several years back. I think that is where now right now, some of the initial builds are happening. So, we'll be seeing the ramp-up coming on those things in the next 18 months.

Highlights the strategic importance of the aerospace segment, its 'moat' characteristics, and specific customer ramp-ups (Honeywell, Thales) driving future growth.

Asked by Adityapal

European defence market and ITAR facility for US defence Direct
Yes. That's what I think we have now one project going on right now for one of the defence customer there. We have the ITAR facility, which as we said, is the ITAR certified one. So, we are working out with a few more other U.S. defence customers there. So, it is still at the early stages of our pipeline. But we see a value there, what we can bring into our customers in U.S., the defence customers in U.S.

Confirms engagement in the European defence market and leverages ITAR certification for US defence customers, indicating diversification and high-value opportunities.

Asked by Adityapal

3 min read 7 chapters

Detailed narrative

Strong Q1 FY27 Performance Driven by Execution and Demand

Cyient DLM reported a robust start to FY27, with revenue growing 34.3% year-on-year to INR 373.8 crores. This growth was supported by a healthy order book and improved execution momentum across all business segments. EBITDA increased by 56.2% year-on-year to INR 39.2 crores, with the EBITDA margin expanding by 147 basis points to 10.5%. Profit after tax more than doubled, growing 118.2% year-on-year to INR 16.3 crores, reflecting a healthier business mix and disciplined cost management.

Record Order Book and Sustained Book-to-Bill Ratio

The company achieved its highest-ever order book, reaching INR 2,598.9 crores, an increase of INR 183.2 crores quarter-on-quarter. Order inflow for the period stood at INR 551.9 crores, resulting in a strong book-to-bill ratio of 1.5x. This robust order book provides excellent revenue visibility for the coming quarters and reaffirms customer confidence in Cyient DLM's capabilities, underscoring sustained demand across target markets.

Strategic Diversification and Capability Expansion

Cyient DLM continued its strategy of diversification by adding two new logos in the industrial and automotive segments, broadening its customer base and reducing concentration. The company also expanded its build-to-specifications (B2S) lab from 6,000 square feet to 15,000 square feet, providing headroom for product platform development. Furthermore, the Mysore unit completed its Nadcap audit for cable harness assembly, reinforcing its credibility in high-reliability aerospace work.

New Growth Avenues: AI, Data Centers, and Robotics

The company is actively exploring new industry segments such as AI infrastructure, data center technologies, and robotics, which require high-reliability electronics manufacturing. Management indicated that these areas, along with semiconductor capital equipment, are expected to drive growth and margin leverage within the next 6 to 12 months. The strategy involves leveraging existing capabilities and selectively participating where a differentiated right to win can be established.

Working Capital Dynamics and Cash Flow

While the company reported strong growth, inventory days outstanding increased to 162 days in Q1 FY27 from 153 days in Q4 FY26, and net working capital days rose to 161 days from 145 days. This increase was attributed to higher inventory and lower customer advances, which resulted in negative free cash flow. Management clarified that this inventory build-up is a strategic move to ensure uninterrupted execution and support future growth, with expectations for cash flow to turn positive once inventory is controlled.

Segmental Performance and Geographical Mix

From an industry perspective, Aerospace and Industrial segments were the largest contributors to revenue, accounting for 42% and 32% respectively, with YoY growth of 40% and 90%. Defence contributed 9% with 35% YoY growth, while MedTech remained broadly flat at 16%. Geographically, 94% of revenue came from the Rest of the World, driven by demand from aerospace, medical, defence, and industrial customers outside India, with India contributing 6%.

Long-Term Strategic Roadmap and Margin Expansion

Cyient DLM outlined a three-phase strategic roadmap: 'Strengthen' (current phase, 9-11% EBITDA margins), 'Expand' (FY27-FY29, targeting 11-13% EBITDA margins by entering robotics and AI data centers), and 'Transform' (FY30+, aiming for 13-18% EBITDA margins through B2S products and new platforms). This progression is designed to widen industry coverage and steadily elevate value delivery and margins over time.

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