Sell Cyient; target of Rs 1350: Motilal Oswal

Motilal Oswal is bearish on Cyient has recommended sell rating on the stock with a target price of Rs 1350 in its research report dated January 23, 2025.

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January 24, 2025 / 13:19 IST

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Cyient

DET business reported 3QFY25 revenues of USD175m, up 2.4% QoQ in CC vs. our estimate of 2.3% growth. Cyient reported broad-based growth in revenues across verticals, except Sustainability (down 1.3% QoQ cc). EBIT margin of the DET business contracted 70bp QoQ/250bp YoY at 13.5%, in line with our estimates of 13.5%. Service order intake was muted at USD312.3m, up 5.0% YoY. DET PAT was down 30% QoQ/28% YoY to INR1,238m (est. INR1,566m). For 9MFY25, DET revenue/EBIT/PAT declined 1.8%/16.8%/14.3% vs. 9MFY24. In 4QFY25, we expect DET revenue to remain flat and EBIT/PAT to decline 15.5%/9.9% YoY. Our SOTP-based TP of INR1,350 implies a downside of 23%.

Outlook

We value the company’s stake in DLM at a market valuation with a holding company discount of 20%. In our P/E-based valuation, we value the DET business at 18x FY27E EPS. Our SOTP-based TP of INR1,350 implies a 23% downside.

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