Shares of IT solutions provider Cyient traded flat after the announcement of its Q1 numbers. At 12:21pm, the stock was trading 0.11 percent lower at Rs 1464 on the NSE.
Brokerages still bullish
Brokerage firm Nuvama has given a ‘hold’ rating to the stock with a 12-month target price of Rs 1,520 after the Q1 results, stating that the numbers were in line with expectations with EBIT margins slightly better, “EBIT margins of 14.7 percent were slightly better than our forecast of 14.3 percent. The management maintained its FY24 services revenue growth guidance of 15-20 percent (includes 7 percent inorganic) and margin expansion of 150–250bp YoY (up from 100–200bp earlier). It expects rebound in growth in the coming quarters, although, CQGR of 1.7–4.5 percent might be challenging at the top end. Retain ‘hold’," Nuvama said.
Brokerage firm Motilal Oswal has shared similar views, giving a ‘buy’ rating to the stock for a target price of Rs 1,730, signifying a potential upside of nearly 20 percent. The brokerage firm believes that stable demand and strong margin performance would drive the FY24 growth.
HDFC Securities has a ‘buy’ rating on the stock with a target price of Rs 1,700, citing a potential upside of nearly 20 percent. Choice Equity broking have given an ‘add’ tag with a target price of Rs 1,560, stating that the outlook remains strong and margins of the company are on an improving spree.
Cyient profit rises 46 percent
Cyient on July 25 posted a 46 percent year-on-year rise in consolidated net profit to Rs 169 crore in the June quarter from Rs 116 crore last year, the company said in a BSE filing. Sequentially, the net profit was up 3.6 percent from Rs 163 crore.
Its revenue from operations grew 35 percent to Rs 1,686.5 crore from Rs 1,250 crore in this period.
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Its revenue in the first quarter of the current fiscal declined 3.7 percent from Rs 1,751 crore in the March quarter. The company won six large deals of about Rs 400 crore in the Digital, Engineering and Technology (DET) segment in the June quarter.
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Krishna Bodanapu, executive vice-chairman and managing director of the company, said the company "witnessed positive Q1, FY24 results, with quarterly group revenue at $205.3 million (Rs 1,683 crore), up 28.6 percent YoY in constant currency".
"We won six large deals in DET with a total contract potential of $48.8 million (Rs 400 crore) in this quarter. The order intake stood at $193.2 million (Rs 1,584 crore), up 32.5 percent Y-o-Y. Our pipeline for the year looks robust," Bodanapu added.
Stock Performance
Cyient stock has given a return 70.67 percent over the last six months. It has hence outperformed the benchmark Nifty IT index which has given a return of 1 percent over the same duration.
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