Post Q2 results, well-known brokerages based in India are covering various stocks from various sectors and providing target prices for them after thorough analysis.
Listed below is one small-cap stock associated with the ‘Defence’ industry in which Axis Securities sees a huge upside potential, i.e., an upside of up to 214 percent:
Cyient DLM Limited
With a market capitalization of Rs 4,893.19 crores, the stocks of Cyient DLM Limited, one of the leading integrated Electronic Manufacturing Services (EMS) and solutions provider, are currently trading at Rs 617, slipping approximately 2.80 percent as compared to the previous close of Rs 634.25 apiece.
Having a glance at the latest standalone financial reports for Q2FY24, the company reported a decent amount of increase in both, its operating revenues as well as net profits. Due to the recent listing over the bourses, the annual data for the company is not yet available.
The operating revenues grew from Rs 217 crores during Q1FY23-24 to Rs 291 crores during Q2FY23-24, and, the net profits, in congruence with the pattern, showcased a nearly three-fold growth from Rs 5 crores to Rs 14 crores.
Having a positive outlook for the company, Axis Securities has given a ‘Buy’ tag to the company’s stock with a target price of Rs 1,940 indicating an increase of a drastic 214 percent as compared to the current stock prices prevailing in the markets.
The prime investment rationale behind providing such a recommendation pertains to multiple order wins during the current quarter, spectacular order book growth, improved growth prospects, etc.
As per the report, the latest financial numbers portray that it has met the market expectations, and, further, the brokerage estimates the earnings before interest and tax (EBIT) margins to improve by 1.50 to 2.50 percent during FY23-24.
According to the shareholding data available for the September 2023 quarter, the company’s Promoters hold a 66.66 percent stake, and the Foreign Institutional Investors (FIIs) hold a 6.23 percent stake in the company.
Cyient DLM Limited primarily provides solutions concerning the manufacture of printed circuit board (PCB) assembly, cable harnesses, and box builds that are used in safety-critical systems.
Written by Amit Madnani
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