BackMotilal Oswal has a 'Buy' rating on this multibagger IT stock that has surged 125% this year
The brokerage firm has maintained its Buy rating on the IT stock on the back of attractive valuations
PremiumDomestic brokerage and research firm Motilal Oswal is bullish on Cyient and sees further upside on the IT stock despite its 125% this year (year-to-date or YTD) so far. High growth visibility, coupled with margin expansion over the medium term, should bring good earnings visibility, said the brokerage.
IT company Cyient on Thursday posted a 44.5% jump in consolidated net profit to ₹121 crore for the quarter ended on September 30, 2021, compared to ₹83.9 crore in the same period a year ago. Its revenue grew 4.6% on a sequential basis in dollar terms.
“We increase our EPS estimate for FY23 on a potentially better margin performance, led by the management’s medium-term outlook. We maintain our Buy rating on attractive valuations," Motilal Oswal said in a note. It has a target price of ₹1,380 per share.
The brokerage continues to see a strong rebound in Cyient's ER&D spending, led by increasing outsourcing and larger deal sizes. “The management strategy to leverage these spends – led by a refreshed GTM strategy and increased focus on large deal wins–should dwell well with its growth performance. We expect Cyient (CYL) to deliver a 14% USD revenue CAGR over FY21–23E," it added.
The management continues to expect double-digit growth in the Servicesbusiness in FY22, with growth continuing in 3Q.
“Growth momentum in verticals such as Communications, Utilities, Semi-conductor, Automotive, Medical Devices, and Mining is expected to continue forthe next 2–3 years. Aerospace is expected to bounce back to pre-COVID levels in FY23," Motilal note added.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
