Prabhudas Lilladher has given Buy recommendation for Cyient with a target price of Rs. 1088 in its research report issued on Jul 16, 2021
Prabhudas Lilladher’s research report on Cyient
Cyient reported revenue of $143.5 Mn -4.3% QoQ USD (Ple: -5%, Cons: -5%), led by anticipated weakness in DLM (-20.1% QoQ USD) and flattish growth in Services (-0.3% QoQ USD). Revenue lost this quarter was around $3 Mn due to higher absenteeism due to severe second Covid wave in India and scarcity of digital talent. Order intake was lower this quarter at $120 mn, +21% YoY (vs $238 Mn in 4QFY21). However, management is confident of growing double digit in FY22 with growth coming back from 2Q given order backlog and robust order intake. They anticipate DLM to also post robust growth of 20% YoY CC in FY22.
We arrive at a TP of INR 1088 (earlier INR 912) on Sep-23 EPS (roll over) of INR 54.4. Cyient is currently trading at 21X/18X on FY22/23 earnings of INR 44.9/53 respectively, which is significantly lower as compared to its ER&D peers. Maintain BUY.