MarketsMOJO Upgrades Cyient DLM to 'Hold' Amid Strong Debt Servicing Ability

Cyient DLM, a midcap company in the electronics-components industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This upgrade is based on the company's strong ability to service its debt, with a low Debt to EBITDA ratio of 1.07 times.
Technically, the stock is currently in a Mildly Bullish range, with the technical trend improving from Sideways on 21-Oct-24. The RSI, a key technical factor, has also been Bullish since 21 Oct 2024.

However, the company's financial results for the quarter ending Sep 24 were flat, with the lowest operating cash flow of Rs -70.54 Cr and the highest interest expense of Rs 10.97 cr. The company's profits also fell by -6.5% to Rs 15.55 cr.

With a ROE of 6.7, the company's valuation is considered Very Expensive, with a price to book value of 6.1. However, over the past year, the stock has generated a return of 1.42%, while its profits have risen by 93%.

One concerning factor is the decrease in promoter confidence, as they have reduced their stake in the company by -14.5% over the previous quarter and currently hold 52.16% of the company. This could signify reduced confidence in the future of the business.

In the last 1 year, Cyient DLM has underperformed the market, with a return of only 1.42%, compared to the market (BSE 500) returns of 34.48%. While the company's strong ability to service debt and recent technical improvements may make it a 'Hold' for now, investors should keep an eye on the company's financial performance and promoter confidence in the future.