Buy Cyient; target of Rs 1030: Anand Rathi

Anand Rathi's research report on Cyient

To reduce concentration and thus raise expectations of steady organic revenue growth, Cyient diversified its services portfolio in FY23 via acquisitions. It is working toward building a sharper sales organization to benefit from its wider services. Order intake (in Q2) has yet to improve notably but the large-deal pipeline ($1bn+) reflects early gains. Services margins are likely to touch 15% with operational rigor (mostly higher offshore) and capex is likely to be lower, converging to peers, thus raising FCF.

Outlook

DLM would be an additional value driver, with growth acceleration ahead, suggested by Q2 orders. TP unchanged at Rs1,030, 15x FY25e EPS.

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Cyient - 28 -11-2022 - anand