Cyient DLM has reported strong financial performance in Q2 FY25, with a 33% increase in revenue and a 34% increase in EBITDA compared to the previous year.

This growth was driven by a significant surge of 82% in the defense sector and a 20% rise in the aerospace sector.

However, the company's profit after tax (PAT) only grew by 5.5%, falling short of expectations due to higher interest costs associated with increased debt levels.

The higher proportion of domestic revenue in the quarter boosted overall revenue but had a negative impact on margins.

Cyient DLM's order book currently stands at INR 19,790 million, and there is a promising pipeline of projects exceeding $500 million, which is expected to contribute to future performance.

Analysts anticipate an improvement in margins, with expectations of significant growth in FY26, while FY25 is projected to see margins approaching double digits.

KR Choksey slightly adjusted its FY26 earnings estimates down by 3.5% to INR 19 but maintains a BUY rating on Cyient DLM with a target price of INR 842, indicating a potential upside of 27.4%.