ICICI Direct recommended hold rating on Cyient with a target price of Rs 225 in its research report dated May 08, 2020.
ICICI Direct's research report on Cyient
Cyient Ltd (Cyient) reported a poor set of Q4FY20 numbers. Revenues declined 3.8% QoQ mainly led by 5.6% QOQ decline in services revenues. The decline in services revenues was led by 24.7% QoQ decline in E&U vertical and 22.3% QoQ decline in semiconductor IoT and Analytics. Normalised margins fell 118 bps due to lower utilisation and pricing pressure. Reported PAT declined 58% QoQ. However, adjusting for one off expenses, adjusted PAT declined 30.3%.
Accordingly, we revise our PE multiple downwards to 8x (from 9x) on FY22E EPS leading to a revised target price of Rs 225. We maintain HOLD rating on the stock.
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