Geojit's research report on Cyient
Cyient Ltd., formerly known as Infotech Enterprises, is one of the leading players in the IT-enabled services space, providing services to the Engineering Research and Development segment. In Q1FY24, consolidated revenue grew by 34.9% YoY due to strong growth in the services segment. The revenue from digital engineering & Technology (DET) grew by 37.1% YoY, driven by Transportation and Sustainability verticals. EBIT margin improved by 326bps to 14.7% due to cost optimisation measures, and PAT improved by 46% YoY at Rs.169.1cr. The company's deal wins remain strong, and it secured 6 large deals with a total value of $48.8 million. Despite concerns over global uncertainties, strong growth scenarios across segments, healthy deal wins, and promising FY24 revenue guidance growth could bolster the company’s future performance. The margin is expected to improve in FY24/FY25E on automation and costcontrol measures.
Outlook
Following the listing of Cyient DLM, henceforth, the company is valued on SOTP. Therefore, we maintain our Accumulate rating with a target price of Rs. 1,813.
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