Cost optimization, sales and account mining focus, renewed leadership, margin improvement programs, adoption of AI/digital technologies, streamlined incentive policies, and investments in talent and strategic partnerships to drive sustainable growth, operational excellence for Cyient.
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IDBI Capital Report
Cyient Ltd. reported Q2 FY26 results with digital, engineering and technology revenue rising 3.3% QoQ and 4.5% YoY in rupee term, while Ebit margin improved 16 bps sequentially to 12.2%.
Despite wage hikes and restructuring costs (200 bps impact), cost optimization offset the pressure. PAT stood at Rs 137 crore, down 16% QoQ. Transportation and network and infrastructure units grew 3.9% and 3.6% QoQ respectively, while the semiconductor business rebounded 12% QoQ, aided by strong order intake and a $100 million pipeline.
Design led manufacturing reported strong momentum in (with 130% YoY) order-intake and double-digit margins. The group expects to be Ebit-neutral in semiconductors business by FY27, and DET margins to reach 15% by Q4 FY27.
Cyient announced an interim dividend of Rs 16 per share, its highest ever, reflecting confidence in cash flows and outlook.
Management guided for stronger revenue and margin performance in H2 FY26. We have reduced our estimates by ~14% (FY26/FY27e), we maintain our Hold rating by valuing the stock at 18x FY27E EPS and with a revised target price of Rs 1,211.
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