Buy Cyient, target Rs 894: IIFL

IIFL has a buy call on Cyient Ltd. with a target price of Rs 894.0 . The current market price of Cyient Ltd. is Rs 745.5. Time period given by the brokerage is a year when Cyient Ltd. price can reach defined target. Cyient Ltd., incorporated in the year 1991, is a midcap company with a market cap of Rs 8325.79 crore.

Investment Rationale by IIFL
Cyient, a mid-sized IT company, would post robust growth as it transforms to a full scale solutions company (thereby expanding its addressable market). Traction in transportation and communications verticals along with strategic acquisitions to build up offerings would drive 14.5% revenue CAGR over FY18-20E. We expect EBIT margin expansion by 100bps to 12.3% and PAT CAGR of 15.0% over FY18-20E. We recommend BUY with target price of Rs 894 (18x FY20E EPS).