Reduce Cyient; target of Rs 1270: Emkay Global Financial

Reduce

Emkay Global Financial's research report on Cyient

Cyient reported weak operating performance in DET, in Q4. DET revenue degrew 3.0% QoQ (1.9% cc) to USD170mn. DET EBITM declined by 48bps QoQ to 13.0%, lower than our estimate. The management attributed revenue weakness to increased macro uncertainties which impacted the demand environment during the later part of Q4. While there are some near-term uncertainties that would weigh on revenue growth in H1FY26, the company believes that its well-balanced portfolio with three growth vectors (recently carved out semicon business, DET business, DLM business) has positioned it well to participate in a wide spectrum of growth opportunities. The management lowered DET margin expectations to ~15% in the next 24 months (earlier expected ~16% by Q4FY26). The company stopped providing guidance, albeit temporarily, citing the transition to new leadership, need for greater clarity on macros, and ongoing evolution of the newly established semicon business.

Outlook

We cut FY26/27E EPS by 8%-10%, given the Q4 miss. We maintain REDUCE, cutting our TP by ~7% to Rs 1,270, valuing the DET business at 16x Mar-27E and the DLM business at 20% discount to its CMP.

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Cyient - 25042025 - emkay