** Shares of telecommunications contractor Dycom Industries DY.N fall 2.7% to $170.02 in early trade

** Spruce Point Capital Management issues "strong sell" on DY and says it has short position

** Adds stock faces up to 35%-55% potential downside risk

** Flags concerns on cost saving among Dycom's telecom clients; says co may be embellishing margins

** Says DY delayed disclosures of credit exposure to Frontier Communications FYBR.O

** Dycom Industries did not immediately respond to a request for comment

** DY shares down 2.1% year to date

(Reporting by Lisa Mattackal)

((LisaPauline.Mattackal@thomsonreuters.com;))