Motilal Oswal is bullish on Cyient has recommended buy rating on the stock with a target price of Rs 730 in its research report dated May 13, 2019.
Motilal Oswal's research report on Cyient
We attended Cyient's Analyst day at their head office in Hyderabad where management shed some light on the demand environment and the company's strategic approach. Key highlights: With the shift to IP solutions from Services, the linearity model (headcount-linked revenues) has been broken, reflected in the shift to outcome-based pricing. CYL expects traction to continue in Aerospace & Defense and Medical over the next five years. Transport, Communications, and Semiconductors will also drive growth over this period, though with some intervals of challenges. CYL is investing in building IP through its New Business Accelerators program in the areas of Augmented Reality/Virtual Reality, IoT, etc. Cost savings program is expected to improve profitability across clients in addition to SGA cost optimization.
Our TP of INR730 discounts forward earnings by 14x. Maintain Buy.
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