Company update - Cyient Ltd - Q3FY21 - ICICI Direct

Cyient Ltd (Cyient) reported a decent set of Q3FY21 numbers. The key highlight of the quarter was that the company has made some structural changes to the organisation which will enable the company to accelerate growth and improve profitability. The company has simplified the organisation which will realign its go to market strategy, will focus on large deals, process discipline and incentives to align employees for better sales productivity. We believe this will help improve revenue and margin prospects in longer run and will be key to re-rating of the stock.

Valuation & Outlook

The company has seen healthy traction in large deals and order book which we believe will drive long term growth. This coupled with restructuring its organisation with an aim to accelerate growth, improve sales, focus on large deals (as won in this quarter), client mining and increase digital & DLM deals bodes well for revenue growth. Further, improving margin trajectory prompt us to be positive on the stock. Hence, we maintain BUY with a revised target price of Rs. 690 (14x P/E on FY23E EPS) (earlier target price was Rs. 440/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Cyient_CoUpdate_Jan21.pdf

Shares of Cyient Limited was last trading in BSE at Rs.602.85 as compared to the previous close of Rs. 507.45. The total number of shares traded during the day was 406189 in over 22400 trades.

The stock hit an intraday high of Rs. 608.9 and intraday low of 511. The net turnover during the day was Rs. 233453803.

Source : Equity Bulls

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