Cyient - Balancing The Right Mix: IDBI Capital

IDBI Capital Report

The key highlight of Cyient Ltd.'s Analyst Meet was that the company aims to grow services revenues at a compound annual growth rate of 10%-20% over next three-five years. The growth will be led by aerospace, energy, auto and connectivity.

Further, Cyient aspires to improve services margins to 18-20% over the medium to long term (from current 16%). However, we have built in a conservative estimate for revenues (12% CAGR over FY23-FY26E).

In addition, we have built in a marginal expansion in group Ebit margins of 40 basis points leading to an adjusted profit after tax to grow at a CAGR of 20.5% over FY23-FY26E.

Considering, aerospace and energy tailwind we upgrade the stock from 'Hold' to 'Buy'.

We have moved to FY26E estimates and revise the target price to Rs 2,245 (25 times FY26E earnings per share) versus our target price of Rs 1,915.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.