• Record order book of INR 24,166 million, highest in 2.5 years, up INR 5,105 million YoY with book-to-bill ratio of 1.5x for FY26
• Book-to-bill ratio greater than 1.0x in each quarter of FY26, reflecting consistent order intake momentum
• Successfully completed IATF audit and commenced series production for new automotive product line and semiconductor mission supply partner
• Won top honors at IEMI hand soldering championship, demonstrating commitment to quality and process maturity
• Achieved full utilization of IPO proceeds as of March 2025 in compliance with stated objectives
• Normalized EBITDA margin of 10.3% for FY26, up 77 basis points YoY, first year achieving 10%+ EBITDA margin across entire portfolio
• Q4 revenue of INR 3,691 million with EBITDA margin of 11.7% and PAT margin of 6.1%, highest quarterly margins for the year
• Strengthened sales organization with new leaders across geographies and verticals to enhance reach and depth

Cyient DLM reported a challenging FY26 with 17% YoY revenue decline to INR 12,615 million, but ended strongly with record-high order book of INR 24,166 million (1.5x book-to-bill ratio) and sustained double-digit EBITDA margins at 10.1%. Management expressed confidence in FY27 recovery driven by strong order backlog, improved sales organization, and shift toward higher-value build-to-spec engagements, though near-term execution faces headwinds from West Asia geopolitical crisis, supply chain disruptions, and memory component constraints.

Cyient DLM reported FY26 revenue of INR 12,615 million, down 17% YoY, primarily due to completion of a large A&D order in FY25 and delayed program ramps. Q4 FY26 revenue was INR 3,691 million, down 13.8% YoY but showing sequential improvement. Normalized EBITDA for FY26 was INR 1,302 million (10.3% margin, up 77 bps YoY), while reported EBITDA was INR 1,268 million (10.1% margin, up 113 bps YoY). Q4 EBITDA was INR 431 million at 11.7% margin. Normalized PAT for FY26 was INR 563 million, down 24% YoY, while reported PAT increased 7.7% to INR 733 million (5.8% margin, up 133 bps YoY). Q4 PAT was INR 224 million at 6.1% margin. Working capital remained elevated with inventory days high due to advanced stocking for long-lead components, though showing reduction in Q4. DSO improved from low 90s to mid-70s. Order intake for FY26 exceeded $280 million. Cash position details not disclosed but IPO proceeds fully utilized.

Management acknowledged FY26 as 'a poor year on a growth perspective' but emphasized ending the year with strong momentum through record order book and sequential Q4 improvement. Krishna Bodanapu stressed the 'quality of the order book' with increasingly complex, integrated programs having longer lifecycles and higher barriers to entry, signaling better predictability and profitability ahead. Management highlighted deliberate strategic actions including focused sales team expansion, shift from manufacturing partner to value-adding strategic partner, and disciplined margin management achieving first-ever full-year 10%+ EBITDA. While not providing specific revenue guidance for FY27, management expressed 'measured confidence' based on strong backlog and pipeline maturity, stating investors will see 'year over year growth in all four quarters' of FY27. Tone reflected cautious optimism tempered by acknowledgment of execution challenges, with emphasis on structural business strength despite near-term geopolitical uncertainties. Management prioritized margin sustainability over short-term optimization and continued investment in sales and technology.

Cyient DLM faces multiple significant headwinds impacting near-term execution. The West Asia crisis directly impacted customers causing temporary disruptions in schedules and material delays through Dubai/Doha cargo routes, affecting Q4 revenue and driving inventory buildup. Memory component availability constraints due to stress in the memory sector disproportionately impacts the company given memory usage in complex boards and 60%+ export exposure. US tariff uncertainty continues to create a 'cloud' affecting customer decision-making despite recent reduced tariffs, with no clear resolution timeline. Israeli customer operations faced approval delays due to regional situation. Q4 revenue missed expectations due to three factors: West Asia material delays, Israeli approval delays, and NDA approval delays from customers. Other expenses increased significantly from INR 29 crores to INR 44 crores YoY in Q4 despite revenue decline, pressuring margins. The Altek acquisition appears challenged with earn-out reversals suggesting underperformance versus expectations. Working capital remains elevated at higher than target 120-day level. Dependency on long 18-24 month order-to-revenue conversion cycles creates execution risk. Company acknowledged FY25 order intake challenges that translated to FY26 revenue weakness.

Revenue Outlook: Management declined to provide specific revenue guidance for FY27 but indicated 'year over year growth in all four quarters' with 'strong year which will make everybody happy.' Expects growth driven by record order backlog and strong pipeline. Order-to-revenue conversion timeframe remains 18-24 months for most programs.

Margin Outlook: Confident in sustaining double-digit EBITDA margins (10%+) in FY27 based on current order book quality and product mix. Expects 'couple of basis points improvement' from operating leverage as volumes grow. Targeting 120-day working capital cycle (improvement from current elevated levels).

Key Targets:

• Sustain 10%+ EBITDA margins across portfolio
• Book-to-bill ratio greater than 1.0x
• Reduce working capital to 120-day target
• Sequential quarterly revenue growth throughout FY27

The Q&A session revealed significant analyst concern about the disconnect between strong order book metrics and weak revenue execution, with multiple participants pressing for specific FY27 revenue guidance that management repeatedly declined to provide. Analysts focused heavily on three themes: (1) execution challenges and revenue conversion timing, questioning why record order book hasn't translated to growth; (2) margin sustainability and cost control, particularly the sharp rise in other expenses despite revenue decline; and (3) structural competitiveness, with questions about whether Cyient DLM is losing ground to competitors showing 35-40% order growth. Management's responses were generally defensive and cautious, emphasizing 'confidence' and 'strong visibility' while avoiding specific commitments. The West Asia crisis explanation was cited repeatedly but analysts seemed unsatisfied with lack of quantification. Questions about the Altek acquisition and earn-out reversals suggested investor skepticism about M&A execution. Management's refusal to provide revenue guidance despite 'record order book' created apparent credibility concerns. Overall, analysts appeared frustrated by the gap between management's optimistic narrative around order book strength and the company's inability to convert this into revenue growth, with pointed questions about whether there are deeper organizational or competitive issues beyond stated geopolitical headwinds.