Cyient Ltd. share price target

Strong expansion in margins in FY22: 13.9%, +390bps YoY FY23 with visibility for a high single digit growth in DLM, due to continued supply side challenges. This implies Services growth of 15.5%-17.5%. We believe that guidance is aggressive in terms of both 1) DLM growth Semiconductor supply side challenges may persist for a longer period and 2) In Services, growth is not broad-based with Communication and Portfolio...

We recommend a BUY on the stock and assign a 17x P/E multiple to the company's FY24E earnings of Rs 60.0/share to arrive at A TP of Rs 1,000/share, implying an upside of 20% from CMP.

Revenue fell 0.4% QoQ in USD CC terms in 4QFY22, but was above our estimate of -1.1% QoQ USD CC. The beat was led by both Services (+1.6% QoQ USD CC) and DLM (-9.3% QoQ USD). Growth in Services was driven by Portfolio (10% QoQ), Aerospace (3.9%), and Communications (3.5%), while growth in Rail Transportation (-9.5%) was weak. EBIT margin rose 60bp QoQ to 14.5% in 4QFY22 (200bp above our estimate), led by tailwinds such as offshoring, pyramid rationalization, higher quality revenue, utilization, and SG&A leverage. The same was offset...

Cyient is a software services company in: a) UT&DA services ; b) engineering design services and Software services.

We recommend a BUY rating on the stock and assign an 18x P/E multiple to the company's FY24E earnings of Rs 60.0/share. This gives a TP of Rs 1,100/share, implying an upside of 12% from CMP.

Cyient (CYL)'s 3QFY22 revenue grew 5.2% QoQ in USD terms, above our estimate of 3.6% QoQ growth, led by beat on both Services (+4.4% QoQ CC) and DLM (+12.8% QoQ USD). Services growth was driven by Portfolio (10.0% QoQ), Aerospace (3.9% QoQ), and Communication (3.5% QoQ), while Rail Transportation (-9.5% QoQ) was weak. The 3Q EBIT margin saw a minor 14bps QoQ drop to 13.9% (above expectation), with improvement in Services (+14bp QoQ), compensated by weaker margins in DLM (-80bps QoQ). CYL has raised its margin guidance for...

Increase in EBIT margin guidance: Margins to improve by +350bps YoY in FY22 vs +250-300 bps YoY earlier. Cyient reported beat in revenue growth of +5.2% QoQ USD (Ple: 4.2%, Cons: 5%) led by higher than expected growth in both Services +3.6% QoQ USD (Ple:3%) and DLM business +12.8% QoQ USD. (Ple: 10%). Revenue guidance of double digit growth in Services remains intact given strong order intake, backlog and deal pipeline (+27% YoY). DLM growth guidance is reduce to low...

We recommend a BUY rating on the stock with a target price of Rs 1,200/share

Cyient Ltd, formerly known as InfoTech Enterprises is one amongst the leading players in the IT enabled services space, providing services to the Engineering Research and Development segment. In Q2FY22, consolidated US$ revenue reported a growth of 4.6% QoQ, and 11.2% YoY. Services revenue reported 4.5% QoQ and...