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ICICI Securities Report
ICICI Securities has maintained its ‘Add' rating on Cyient Ltd. with a revised target price of Rs 1,040, implying an upside of around 12% from the current market price.
The brokerage highlighted that Cyient is pivoting towards higher-growth segments, supported by recent acquisitions such as Tao Digital and Kinetic Technologies. These deals are expected to expand the company's addressable market significantly and strengthen its capabilities in data engineering, platform engineering, and semiconductor design.
ICICI Securities noted that the acquisition of Tao Digital, a fast-growing AI-native firm, will enhance revenue predictability and improve margins, with the business already delivering higher profitability than Cyient's core operations. The move is also expected to be earnings accretive over time, driven by strong growth in AI-led services and platform-based offerings.
While near-term growth visibility remains somewhat muted due to weak order disclosures and cautious management commentary, the brokerage sees the company taking strategic steps in the right direction, including a shift towards annuity-based revenues and IP-led offerings.
Importantly, ICICI Securities believes Cyient's valuations remain attractive, given its improving growth profile and ongoing transformation. The brokerage expects a gradual recovery in revenue and margins over the medium term, supported by strong deal wins, expanding AI opportunities, and scaling of new-age verticals.
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