Buy Cyient; target of Rs 605: Edelweiss

Edelweiss' report onCyient

Cyient’s Q4FY17 revenue, at USD141.0mn (up 3.8% QoQ), was ahead of Street’s 3.2% growth estimate. EBITDA margin, at 13.3% (down 10bps QoQ), was lower than Street’s 13.8% estimate. Management has guided for 12.5% revenue growth and 50bps margin expansion for FY18 leading to double-digit earnings growth.

Outlook

We remain positive on the stock given its significantly better growth profile versus peers due to exposure to the Engineering Research & Development (ER&D) & IoT segments. Maintain ‘BUY’ with a revised target price of INR 605 (INR 620 earlier) as we change USD rates to INR 67 from INR 69.

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