Cholamandalam Securities is bullish on Cyient has recommended buy rating on the stock with a target price of Rs 717 in its research report dated April 29, 2019.
Cholamandalam Securities' research report on Cyient
In 4QFY19, Cyient’s revenue de-grew by 2.1% QoQ to INR 11,629mn (1.3% above CSEC estimates of INR 11,474mn) and in dollar terms, revenue was flat QoQ at USD 165mn. Services revenues grew by 1.4% QoQ in CC terms to USD 146.9mn. DLM revenues declined by 11.2% QoQ on account of order delays due to documentation issues and defocus on low margin accounts. EBITDA was flat QoQ at INR 1,751mn. EBITDA margin improved by 33bps QoQ to 15.1 % on account of higher billing days (+83bps), lower SG&A expenses (+8bps) unfavorable currency movement (-46ps) and revenue mix impact (-29bps). Services EBITDA stood at 16.4% (highest in 20 quarters) while DLM margins were flat QoQ at 4.1%.
At CMP, the stock trades at 12.5x/11.4x of FY20/21E EPS. We retain our target P/E of 14X FY21E EPS with a target price of INR 717 and maintain a BUY rating.
For all recommendations report, click here
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