Cyient reported Q4FY25 marginally above estimates Revenue for Q4FY25 came at INR 19.1 Bn, up 2.6% YoY but down 0.9% QoQ (vs consensus est. at INR 18.7 Bn). EBIT for Q4FY25 came at INR 2.3 Bn, down 12.4% YoY but up 11.1% QoQ (vs consensus est. at INR 2.3 Bn). EBIT margin was down 211 bps YoY but up 132 bps QoQ to 12.3% (vs consensus est. at 12.1%). PAT for Q4FY25 stood at INR 1.9 Bn, down 1.5% YoY but up 46.0% QoQ (vs consensus est. at INR 1.7 Bn). Overhang of cautious commentary, management transition & US exposure dims Q4 beat:In Q4FY25, Cyient won 6 large deals (3 from top clients), showing strong client relationships. However, DET segment performance was weak, needing better execution. Macro issues like Trump’s tariff policy may slightly affect Q1FY26. Healthcare and Automotive segments look positive, while Sustainability and Aerospace may face near-term challenges. Connectivity stays strong with ongoing fiber rollouts. The company has paused guidance to let the new CEO assess operations. Despite deal wins, soft demand and supply chain risks may delay decisions and impact growth in the next quarter. EBIT margin outlook recalibrated downwards to 15% by FY27E:Cyient has lowered its margin target from 16% to 15% over the next 24 months due to macroeconomic challenges, with a conservative 14% margin growth projected by FY27E. The original target may still be achievable if performance improves. The company remains financially strong, debt-free in DET, and focused on generating cash for dividends, semiconductor needs, and M&A to enhance its portfolio. Attrition for the quarter was 16.5%. View and Valuation: Cyient presented a cautious outlook owing to demand uncertainties from macroeconomic challenges. Further, it faces near-term headwinds due to management transition and its significant exposure to the US (51%), which limits the scope for a sharp rebound. However, with a 35% stock correction since January, most negatives are likely priced in. As the environment improves, a potential recovery seems likely. Given these factors, we marginally lower our estimates by 4%, projecting Revenue / EBIT / PAT to grow at a CAGR of 5.4% / 14.0% / 17.9% over FY25–27E and maintain our rating to BUY, but lower the target price to INR 1,555, implying a 20x PE on FY27E EPS of INR 77.8.

EV/CEValuationFrameworkCapturestheROCEExpansionStory We upgrade DALBHARA from HOLD to BUY as we revise our estimates higher for volume, realisation, and EBITDA per ton. We’ve also adopted a more robust EV to Capital Employed (EV/CE) valuation method to assign fair value. We expect EBITDA to grow at 22.5% CAGR from FY25 to FY28, supported by strong volume growth (8–10%) and stable realisations. DALBHARA’s mix is attractive with ~50% exposure to the North East and ~32% to the South, offering good growth potential. We set a 1-year target price of INR 2,500/share, based on EV/CE multiples of 1.75x–1.80x. This is backed by expected ROCE improvement from 5% to ~10% by FY28. Valuation cross-checks show implied FY28 multiples of 12x EV/EBITDA, 2.2x P/B, and 27x P/E. Key risks: Higher state levies on limestone, weak government infrastructure spending, and global fuel price volatility. Results overall are in line with street expectations, but volumes came in a bit on the softer side: DALBHARA’s Q4FY25 performance was strong, with revenue at INR 40,910 Mn (+28.6% QoQ, +5.0% YoY) and EBITDA at INR 7,930 Mn (+55.2% QoQ, +21.3% YoY). While slightly below CEBPL’s estimates, EBITDA was above market expectations of INR 7,500–7,750 Mn. Volume was 8.6 Mnt, a bit lower than the estimate of 8.8 Mnt, marking the only weak spot. Realisation per ton was INR 4,757, in line with estimates, and cost per ton dropped to INR 3,835, helping push EBITDA/ton to INR 922, slightly ahead of expectations.   Pricing Tailwinds: North East market has witnessed price hikes of INR 10–15 per bag in the month of Apr, which is encouraging. Incentive income for FY26 is expected to be in the range of INR 3 Bn. Targeting INR 150–200/t reduction in cost over 2 years despite raw material headwinds: DALBHARA is aiming for cost savings of INR 150–200/t over the next two years. For FY26, management expects INR 75/t savings, but we estimate ~INR 50/t, driven by lower power and fuel costs through increased WHRS and renewable energy use. WHRS capacity will grow from 72 MW to 89 MW. Freight savings of ~INR 20/t are expected due to more direct deliveries and shorter routes. However, raw material costs may rise ~INR 150/t due to tax impacts on limestone, especially since 20%+ of capacity is in Tamil Nadu. Volume growth is driven by capacity expansion in South & East region: DALBHARA has announced a capital expenditure of INR 35,000 Mn for FY26 to expand its cement capacity. The expansion includes setting up a 3.6 MTPA clinker and 3 MTPA grinding unit at its existing plant in Belgaum, Karnataka, along with a new 3 MTPA greenfield grinding unit in Pune, Maharashtra. These projects are expected to be completed by FY26 and FY27, respectively. As a result, the company’s production volume is projected to increase to 31.8 MTPA in FY26 and 34.9 MTPA in FY27. DALBHARA is targeting a total installed capacity of 55.5 MTPA by the end of FY27.  

More Optimistic than Street on CDMO Business: Upgrade to BUY We have slightly revised our estimates upward by 4.0%/2.7% for FY26E/FY27E, given the improved performance in the CDMO segment. We believe we are more optimistic compared to the street on CDMO business opportunity. Our view hinges on the following: We believe the CDMO arm is not just additive but transformational, with 110 active projects in the pipeline contributing significantly to segment growth. This recent traction aligns with higher utilization at newly built manufacturing blocks and the initial scale-up of CDMO volumes. Management has also indicated further margin improvement as the CDMO segment scales up. We valued Laurus using DCF and a higher 40x PE on FY27E EPS, factoring in its CDMO focus. Averaging both methods, we set a target price of ₹750 and upgrade to BUY. Broad Beat Backed by CDMO & Formulations; EBITDA Miss, API Dips: Laurus reported strong results with revenue up 19.5% YoY to ₹17.2 Bn, beating estimates. EBITDA rose 74.2% YoY with 24.4% margins. PAT jumped 210.3% YoY to ₹2.3 Bn, including a ₹0.6 Bn one-off gain; adjusted PAT stands at ₹1.7 Bn. CDMO to Drive Long-Term Growth Backed by Pipeline & Capex: The CDMO (Synthesis) segment grew 95.3% YoY, driven by strong project deliveries and new facilities. With rising contribution (24.7% now, 31.7% expected by FY27E), it’s set to boost margins thanks to its high-profit nature and strong pipeline. API Recovery Expected from FY26 with Formulations Growth Boost: API segment is expected to recover from FY26 as pricing stabilizes and orders pick up. In formulations, new contracts and facilities by Dec-25, with non-ARV products gaining pace from Q3FY26.