As much as 15% of US exports to China comprises aircraft. Hence, ongoing trade friction between US and China adds risk to Cyient's core vertical, Aerospace & Defense (34% of rev). Cyient's other key verticals like communications (-1.8% 4Qtr CQGR) can revive based on deal wins. Transportation will remain strong (2.2% 4-qtr CQGR; Cyient works for top-5 European rail cos). Cyient is struggling with issues such as (1) Single digit growth in services business, (2) Challenges in top accounts (3) Issues in core vertical (Aerospace & Defense), (4) Higher growth from the low margin DLM business (~4.0% in FY19), (5) Reducing scope of margin expansion in services due to higher investments, and (6) Higher other income (~22% of PAT vs. 11% for LTTS). We expect USD revenue/EPS CAGR of 8.6/8.8% over FY19-21E. The stock trades at 11.7x FY20E which is at ~50% discount to LTTS. This steep valuation gap will persist, given LTTS' higher growth, better margin profile and superior return ratios. Downgrade to NEUTRAL. Our TP of Rs 595 is based on 11.5x FY21E EPS. Cyient has lagged peers (ER&D;) in most parameters, viz. growth, margins and top accounts performance. Co grew 8.6% in FY19 (vs. 24.6% for peer co LTTS), top-5/10 accounts were down 2.2/1.7% YoY and EBITDA margin stood flat at 14% (vs 18% for LTTS). Cyients higher mix of mechanical engg services explains the slow growth and lower margin. According to Zinnov, Non-Digital ER&D; services (mostly mechanical) are expected to grow at just ~3% over the next five years.