Buy Cyient; target of Rs 719: Kotak Securities

Kotak Securities' research report on Cyient

Cyient 3QFY19 revenue de grew by 2.3% QoQ in USD term to USD 165mn below our estimate of USD 168mn. Services de grew by 1% QoQ and DLM revenue de grew by ~10% sequentially in USD terms. EBITDA margin expanded 100bps QoQ to 14.7% aided by favorable business mix during the quarter.

Outlook

We have cut our estimates for FY20, driven by slow services growth which is also a higher margin business for the company. We value stock at 15x FY20E earnings. We recommend BUY with a target price of Rs.719.

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