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IDBI Capital Report
Cyient Ltd. reported subdued (-0.5% QoQ) revenues in Q4 FY24 due to macro related challenges. The company expects H1 FY25E to be soft and H2 FY25E to drive growth based on healthy order book and ramp up of deals.
Hence the company has guided high single digit growth for IT services in FY25E.
We believe the guidance is based on optimism of H2 FY25E and hence conservatively built 6.4% YoY growth for FY25E.
We have also built in 8.5% YoY growth for IT services revenues versus earlier expectation of double digit growth.
This has led to 2.4% and 6.5% cut in earnings per share estimates for FY25E and FY26E.
Hence, we have revised target price downwards from Rs 2,360 to Rs 2,210 (25 times FY26E EPS).
However, considering structural tailwinds in aerospace and sustainability in medium term and recent correction in price prompt us to maintain Buy rating on the stock.
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