Nippon India Mutual Fund has disclosed the sale of shares in Cyient DLM Limited under regulatory compliance requirements, reducing its shareholding position in the engineering services company.

Transaction Details

The mutual fund sold 75,000 shares of Cyient DLM Limited through open market transactions conducted between January 21, 2025, and January 29, 2026. This sale represents 0.09% of the company's total share capital.

Shareholding Changes

Following the transaction, Nippon India Mutual Fund's stake in Cyient DLM Limited has been reduced from 6.49% to 6.39%. The fund's shareholding decreased from 51,47,763 shares to 50,72,763 shares.

Company Information

Cyient DLM Limited's shares are listed on both the National Stock Exchange of India Limited and BSE Limited. The company's total equity share capital remains unchanged at Rs. 79,36,43,960, consisting of 7,93,64,396 shares with a face value of Rs. 10 per share.

Regulatory Compliance

The disclosure was made pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Nippon India Mutual Fund confirmed that it does not belong to the promoter or promoter group of Cyient DLM Limited. The fund operates through Nippon Life India Trustee Limited and is managed by Nippon Life India Asset Management Limited.

The transaction represents a routine portfolio adjustment by the mutual fund, with the shareholding remaining above the 5% threshold that requires regulatory disclosure under SEBI regulations.

Cyient DLM has received a maintained Accumulate rating from Prabhudas Lilladher, with the brokerage revising its target price to ₹418 from the earlier target of ₹439. The recommendation is based on the company's strong operational performance and diversified growth prospects across multiple business segments.

Strong Margin Performance in Q3FY26

The company demonstrated impressive margin expansion during Q3FY26, with margins improving by approximately 390 basis points. This significant improvement was primarily attributed to a decline in the share of the lower-margin Defense segment in the overall revenue mix.

Despite reporting these exceptional items, the company maintained strong underlying operational performance during the quarter.

Business Expansion and Client Additions

Cyient DLM successfully expanded its client base during Q3FY26 by adding two new clients across different segments:

• Medical segment client: Focused on battery management systems
• Industrial segment client: Supporting high-precision and electrical motor controls

The Build-to-Specification (B2S) segment is positioned to become a significant growth driver, with expectations of contributing 6-7% to the topline in FY26. From FY27 onwards, this segment is projected to deliver double-digit contribution, further supporting the company's margin expansion trajectory.

Diversified Growth Strategy

The company expects its revenue growth to be well diversified over the next 2-3 years, with contributions coming from multiple segments including Aerospace, Industrial, Defense, and Automobile sectors. This diversification strategy is expected to reduce dependency on any single segment and provide stable growth momentum.

Financial Projections and Valuation

Prabhudas Lilladher has projected strong growth metrics for the company over the forecast period:

The brokerage expects EBITDA margin expansion of approximately 140 basis points during this period. However, earnings estimates have been revised downward by 2.8% each for FY27 and FY28. The revised target price of ₹418 is based on 26x Mar'28 earnings, reflecting confidence in the company's long-term growth prospects despite near-term estimate adjustments.