Buy Cyient, target price Rs 1170: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Cyient with a target price of Rs 1170.The current market price of Cyient is Rs 962.1.

Cyient, incorporated in the year 1991, is a Mid Cap company (having a market cap of Rs 10698.21 Crore) operating in IT Software sector.

Cyient key Products/Revenue Segments include Software Development Charges for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1645.70 Crore, up 16.23 % from last quarter Total Income of Rs 1415.90 Crore and up 36.52 % from last year same quarter Total Income of Rs 1205.50 Crore. Company has reported net profit after tax of Rs 156.00 Crore in latest quarter.

The company’s top management includes Mr.B V R Mohan Reddy, Mr.Vivek Narayan Gouir, Mr.Vinai Thummalapally, Mr.Vikas Sehgal, Ms.Matangi Gowrishankar, Mr.Alain De Taeye, Mr.Ajay Aggarwal, Mr.Karthikeyan Natarajan, Mr.Krishna Bodanapu, Mr.M M Murugappan, Mr.Ramesh Abhishek. Company has S R Batliboi & Associates LLP as its auditors. As on 31-12-2022, the company has a total of 11 Crore shares outstanding.

Investment Rationale
The company's service segment is shaping up quite well with a majority of its growth engines (excluding Rail, Consulting and Utility) sustaining the positive momentum and delivering robust growth of 15% YoY in 9MFY23. Conversely, other segments are on the verge of recovery and should incrementally contribute to its overall growth in FY24E.

Furthermore, the current valuations at 18x/14x FY23E/FY24E EPS of INR51.9/INR68.6 appear highly attractive giving the brokerage more comfort to maintain its BUY rating.

Promoter/FII Holdings
Promoters held 23.36 per cent stake in the company as of 31-Dec-2022, while FIIs owned 31.07 per cent, DIIs 24.92 per cent.