Cyient Ltd. share price target

Services traction offset by margin outlook :Broad-based services traction: CYL’s 1QFY17 revenue grew 2.6% QoQ (and 2% QoQ in constant currency) to USD124m, compared to our estimate of USD123m. Services business grew 5.4% QoQ to USD115m (v/s our estimate of USD113m), registering the highest growth in 7 quarters. Services business grew across the board with the exception of Utilities & Geospatial. Motilal Oswal price target of INR550 discounts FY18E earnings by 13x. Maintain Buy.

Trendlyne has 8 reports on CYIENT updated in the last year from 3 brokers with an average target of Rs 512.7. Brokers have a rating for CYIENT with 3 price upgrades in past 6 months.

Background: Cyient is a mid cap IT Company with FY16 revenues of INR 30.9bn specializing in engineering solutions, including product development and life cycle support, process, network & content engineering. In 1QFY17: Ex- Design & manufacturing business, revenue shares by geography: Americas (60.0%), Europe, Middle East, Africa & India (24.6%), and Asia Pacific (15.4%). Revenue share by business unit: Aerospace & defense (38.7%), Transportation (10.3%), Industrial energy & natural resources (10.0%), Semiconductor (4.3%), Medical & Healthcare (1.9%), Utilities (15.8%), Communication (18.9%), Utilities & Geospatial (15.8%) and others (0.1%). Onshore/Offshore split: Onshore (40.7%), Offshore (59.3%). Revenue contribution: Top 5 clients (40.2%), Top 10 clients (55.7%). Total employee: 12,965, (billable:...

ICICI Securities Ltd | Retail Equity Research We attended Cyient's full house, analyst day in Hyderabad wherein the company reflected on the issues that plagued FY16 growth and, at the...

With another muted quarter, Cyient?s core business, DNO and Engineering, grew only 1/0.5% QoQ/YoY, mostly fueled by Rangsons (up 13.8% QoQ). But the management is optimistic about growth revival in the core business (lower double digits) and guided for ~50% growth in Rangsons. The company has laid out a new promising organisational structure (eight new units), but how much it pays off, only time will tell.

Background: Cyient is a mid cap IT Company with FY15 revenues of INR 27.3bn specializing in engineering solutions, including product development and life cycle support, process, network & content engineering. In 3QFY16: Ex- PR business, revenue share by geography: Americas (63.6%), Europe, Middle East, Africa & India (23.2%), and Asia Pacific (13.2%). Revenue share by operating unit: Engineering (62.5%), Data transformation, Network & Operation (37%), and others (0.5%). Revenue share by industry: Aerospace & defense (37.7%), Transportation (10.2%), Off-highway equipment (4.8%), Semiconductor (4.3%), Medical & Electronics (1.5%), Utilities (8.8%), Communication (19.4%), Energy & Natural resources (6%), Commercial & Geospatial (6.9%) and others (0.4%). Onshore/Offshore split:...

Cyient posted rev of US$ 118.4mn (flat QoQ, 0.2% CC), below our est by 3%. The core biz continued to falter, with rev down 0.1% QoQ (USD terms). We believe the company could face growth headwinds in the key aerospace biz (new programs falling), as well as issues in off-highway equipment (mining), semiconductor and energy (totally ~53% of rev).

Background: Cyient is a mid cap IT Company with FY15 revenues of INR 27.3bn specializing in engineering solutions, including product development and life cycle support, process, network & content engineering. With 12,094 employee's spread across 35 locations, Cyient caters to multiple industries & its clientele includes 22 Fortune 500 & 27 Global 500 blue chip organizations. Cyient established a 49:51 strategic JV with Pratt & Whitney for its associate aerospace engineering company. It operates in two segments: Data Transformation, Network & Operations (DNO) segment catering to utility, transportation & government verticals & contributes 35.2% of revenues while the Engineering (ENGG) segment addresses solutions in the engineering, manufacturing & industrial product verticals & contributes 63.6% of revenues. The company's business is spread across...

Cyient posted revenue of US$ 118.4mn (up 3.6% QoQ, 4.2% CC), which was below our estimate by 1.6%. The services business continues to falter and is down 0.1% QoQ (USD terms). We believe Rangsons? lower profitability and predictability will lead to Cyient stretching margin levers at cost of revenue. Retain SELL with a revised TP of Rs 558 (Rs 528) at 13x one-year forward rolling EPS