Cyient DLM and Tata Consultancy Services are under the brokerage lens today following key updates.
Analysts have maintained neutral and hold ratings on the stocks, with target price adjustments and changes to revenue estimates reflecting cautious outlooks on near-term growth visibility and the impact of one-off costs.
Brokerages on Cyient DLM
Macquarie
• Retain Neutral with a target price of Rs 450.
• The brokerage is waiting for revenue visibility and growth to improve.
• Management has indicated the addition of higher quality orders.
• Management has characterized the underperformance of the Altek business as a "hiccup."
• Revenue estimate for FY26 is revised down by 5% and FY27 by 3%.
JP Morgan
• Retain Neutral with a price target of Rs 450.
• The firm expects the second half (H2) of the fiscal year to be better than the first half (H1).
• Positive revenue growth is expected to only begin by Q4 FY26.
• The brokerage indicates that the third quarter (Q3) could be weak as well.
• Revenue estimate is cut by 16%, mainly led by a cut in the FY26 estimate.
Jefferies on TCS
• Maintains Hold with a price target of Rs 3,100.
• Q2 revenue was up 0.8% Quarter-on-Quarter (QoQ), which was broadly in line with expectations.
• Profit missed estimates due to a Rs 1,100 crore restructuring cost.
• Ebit margin remained steady at 25.2%.
• Headcount fell 3% QoQ; growth in key markets is still weak.
• The data center venture is seen adding limited value due to low Return on Capital Employed (ROCE), heavy capital expenditure (capex), and minimal synergy.
• Estimates are cut by 1%; Earnings Per Share (EPS) Compound Annual Growth Rate (CAGR) is seen at 4% over FY26–28.
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