CYIENT LIMITED – Fundamental Analysis

CYIENT LIMITED

CYIENT Ltd
CYIENT Ltd
 

CMP: 620.90     Target Price: 743.00     Upside:20%

Face Value (Rs.) 5.00
52 Week High/Low 685.00/435.05
Market Cap (Rs. in Cr.) 6991.09
EPS (Rs.) 33.49
P/E Ratio (times) 18.54
P/B Ratio (times) 3.14
Dividend Yield (%) 0.89
Stock Exchange BSE

INVESTMENT RATIONALE:

 
  • Cyient Limited, formerly Infotech Enterprises Limited, is engaged in providing software-enabled engineering and geographic information
  • system (GIS) services. The Company’s segments include Data & Network Operations (DNO); Engineering, Manufacturing, Industrial Products (EMI), and Product Realisation (PR).
  • It employs nearly 14,000 people across 48 development facilities in India as well as North America, Europe, and the Asia-Pacific.
  • The management expects to start realizing significant revenue contribution from strategy execution in coming quarters. The strong outlook is backed by a strong pipeline and order backlog. The management expects a double-digit growth in services business while DLM (Design Led Manufacturing) business would grow at least 20%. Cyient is progressing well on another year of well-rounded growth in revenue, profit, and cash.
  • Its Aerospace and Defense Business Unit has witnessed a growth of 12.7% year on year and 4.1% quarter on quarter. The management of the company continues to see strong demand for Design-Build projects and also expect its growth to be driven by Avionics, Aftermarket, Manufacturing related Services and Defense.
  • The Communications industry is witnessing increased demand for high-speed infrastructure as well as fiber deployment across Australia, New Zealand, and the U.S. The growth momentum of Communications division will continue in coming quarters, as the management sees growth opportunities from fiber roll-out programs, and small cell design and deployment in Australia and North America.
  • The management expects strong growth in Transportation division in coming quarters owing to its growth in focus segments of rolling stock and signaling, strong long-term relationships, improved utilization and a healthy opportunity pipeline.
  • During Q3FY18, It has well-rounded growth across all business units and geographies, 6 out of 8 BU’s growth is in double digits in YoY terms.

 

VALUATIONS:

The company is optimistic about the future and would continue to invest in digitalization, including IoT, digital manufacturing, engineering analytics, and mobility. As per the management, key industry drivers for growth to be Communications, Transportation, Semiconductor, and Manufacturing. With a healthy pipeline and order backlog, it expects to deliver a strong financial performance throughout the year, thus, it is expected that the stock will see a price target of Rs.743 in 8 to 10 months time frame on an expected P/Ex 18 of x and FY19 EPS of Rs.41.25.

 

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Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of the company and have not been engaged in the market – making the activity of the company covered in the research report.
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