Motilal Oswal has given Buy recommendation for Cyient recommended buy rating on the stock with a target price of Rs 910 in its research re with a target price of Rs. 910 in its research report issued on Oct 14, 2022
Motilal Oswal’s research report on Cyient
CYL reported a 2QFY23 revenue growth of 10% QoQ in USD CC terms (largely due to acquisition-related benefits), 110bp below our estimate. Excluding the inorganic impact, its Services business grew 3% QoQ CC (in line). DLM remained weak, declining by 3.3% QoQ. The management maintained its organic revenue growth guidance of 13-15% in CC terms in FY23. With the closure of the Citec acquisition in 2Q, it expects acquisitions to add an additional 14-15% to growth in FY23. With supply challenges easing in DLM and improved deal flows, it reiterated its high singledigit growth guidance in DLM. Operating profit in 2QFY23 was impacted by one-off cost from a US class action suit (CYL is contesting it) and a one-time fee related to acquisitions. The adjusted EBIT margin was broadly stable in 2QFY23 at 12.5% (down 30bp QoQ) and was 120bp above our estimate, despite a wage hike impact. The management maintained its FY23 EBIT margin guidance of 13-14%.
Outlook
We increase our FY23/FY24 EPS estimate by 6%/5% on better growth and margin. We maintain our Buy rating on the stock on attractive valuations. Our target multiple of 14x FY24 EPS implies a TP of INR910, with a potential upside of 18%.
More Info
At 17:30 Cyient was quoting at Rs 764.80, down Rs 8.30, or 1.07 percent.
It has touched an intraday high of Rs 775.20 and an intraday low of Rs 749.95.
It was trading with volumes of 39,772 shares, compared to its thirty day average of 19,966 shares, an increase of 99.20 percent.
In the previous trading session, the share closed down 0.96 percent or Rs 7.50 at Rs 773.10.
The share touched its 52-week high Rs 1,292.00 and 52-week low Rs 725.65 on 19 October, 2021 and 07 July, 2022, respectively.
Currently, it is trading 40.8 percent below its 52-week high and 5.4 percent above its 52-week low.
Market capitalisation stands at Rs 8,449.21 crore.