Q4FY21 Company Update - Cyient Ltd - ICICI Direct

Cyient reported a healthy set of Q4FY21 numbers. Overall revenues increased 6.0% QoQ to US$149.9 million mainly led by 3.7% QoQ (2.5% QoQ organic growth) growth in services revenues to US$119.6 million and 16.4% QoQ growth in DLM revenues to US$30.3 million. The growth in services revenues was due to 2.9% QoQ growth in transportation, 2.5% QoQ growth in communication and utility segment. Overall EBIT margin increased 148 bps QoQ to 12.6% mainly led by 233 bps QoQ growth in services margins (at 13.6%). The company has declared a dividend of Rs. 17 per share.

Valuation & Outlook

The company's focus on large deals, client mining, healthy order book (up 22% QoQ in Q4FY21E) and organisation restructuring to accelerate growth point to healthy revenue trajectory in coming years. This, coupled with recovery in aerospace division and healthy deal pipeline in DLM bodes well for revenue growth. Further, improving margin trajectory prompts us to be positive on the stock. Hence, we maintain BUY with a revised target price of Rs. 825 (16x P/E on FY23E EPS) (earlier target price Rs. 690/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Cyient_CoUpdate_Apr21.pdf

Shares of Cyient Limited was last trading in BSE at Rs.688.1 as compared to the previous close of Rs. 687.95. The total number of shares traded during the day was 36306 in over 2402 trades.

The stock hit an intraday high of Rs. 720 and intraday low of 670. The net turnover during the day was Rs. 25133560.

Source : Equity Bulls

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