Cyient DLM Limited is an integrated EMS and solutions provider with a focus on the entire life cycle of a product, including design, build and maintain. Company's solutions primarily comprise manufacture of: (i) printed circuit board assembly ('PCBA'), (ii) cable harnesses, and (iii) box builds which are used in safety critical systems such as cockpits, inflight systems, landing systems, and medical diagnostic equipment, which they provide to the clients as B2P or B2S services. Company was incorporated on June 30, 1993 and have over 22 years of experience in developing high mix, low-to-medium volume highly complex systems. Company's customers belong to a diverse range of high-entry-barrier industries that have stringent quality and qualification requirements. They enjoy long-term relationships as an integrated partner to multiple marquee customers such as Honeywell International Inc. ('Honeywell'), Thales Global Services S.A.S ('Thales'), ABB Inc, Bharat Electronics Limited and Molbio Diagnostics Private Limited, having had an average relationship of over 11 years as on March 31, 2023 with the aforementioned customers. They provide services across the product life cycle for the clients by acting as an integrated service provider who can support their manufacturing and after-market services needs, as well as their design needs by leveraging the Promoter's design team. As a strategic partner to clients across highly regulated industries, they enjoy long-term relationships with high customer stickiness and a high proportion of repeat business, which allows them to have visibility on future revenue and a stable client base. Company's manufacturing infrastructure comprises three facilities spread across two states in Bharat, at Mysuru, Hyderabad and Bengaluru, with a total manufacturing area of 229,061 sq. ft. The Mysuru facility has a manufacturing area of 65,929 sq. ft. and is primarily engaged in the manufacture of PCBA, cable harnesses and box builds for clients in the aerospace and defence industries. The Hyderabad facility, which is located in a special economic zone, has a manufacturing area of 150,932 sq. ft. and is primarily engaged in the manufacture of PCBA, cable harnesses and box builds for clients based in non-aerospace and non-defence industries, such as medical technology and healthcare. The Bengaluru facility has a manufacturing area of 12,200 sq. ft. and is focused on high-precision manufacturing. Some of the items manufactured include, body valves, hinges, elbow adaptors, assemblies like bracket assembly, lanyard assembly and hinge arm locking assembly etc. Further, they have a workforce of 656 qualified and skilled manufacturing personnel as on March 31, 2023, which is further supported by a new product introduction (NPI) and engineering team of a total of 67 persons as on March 31, 2023, which helps them support the clients on technical aspects and provide value added services like design for assembly, design for manufacturing, design for testing, design for packaging, and process engineering to the clients. The NPI capabilities are dedicated towards supporting seamless product introduction for the customers, through to market launch, and assisting them optimize the time to market for a new product. As per financial performance, Cyient DLM Limited has posted total income / net profits of Rs 636.91 Cr / Rs 11.81 Cr (FY21) and Rs 728.48 Cr / Rs 39.80 (FY22) and Rs 838.34 Cr / Rs 31.73 Cr (FY23). So as per last three years data, company has shown good growth. Company has posted an average EPS of Rs 10.07 and average RoNW of 16.03% for last three fiscals. Issue is priced at a P/BV of 5.48 as per NAV of 48.33 as on 31.03.23. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 52.79 and as per FY23 earnings P/E is around 66.22, which looks aggressively priced. As per RHP, peers comparison is shown in above table . On BRLM's front, two lead managers are associated with this IPO, and have handled around 66 IPOs in last three fiscals.Axis Capital Limited : This is 38th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 3 are trading below issue price and remaining are trading above issue price or at par. ( As on 22.06.2023 ) JM Financial Limited : This is 30th IPO from this BRLM. From last 10 IPOs, 3 opened below issue price and remaining opened above issue price or at par on the day of listing. As of now, from last 10 IPOs, 2 are trading below issue price and remaining are trading above issue price or at par. ( As on 22.06.2023 ) As per financials, Cyient DLM Limited has shown good growth, RoNW is 9.85% and P/E is respectively 63.63 and 87.54 as per FY22 and FY23 earnings, which looks aggressively priced. Company is in business of EMS and solution provider. This sector has good growth opportunities and. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO for listing gains. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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