Prabhudas Lilladher is bullish on Cyient has recommended buy rating on the stock with a target price of Rs 1088 in its research report dated July 16, 2021.
Broker Research
July 16, 2021 / 01:24 PM IST
“India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business,” JM Financial research report.
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Prabhudas Lilladher’s research report on Cyient
Cyient reported revenue of $ 143.5 Mn -4.3% QoQ USD (Ple: -5%, Cons: -5%), led by anticipated weakness in DLM (-20.1% QoQ USD) and flattish growth in Services (-0.3% QoQ USD). Revenue lost this quarter was around $ 3 Mn due to higher absenteeism due to severe second Covid wave in India and scarcity of digital talent. Order intake was lower this quarter at $ 120 mn, +21% YoY (vs $ 238 Mn in 4QFY21). However, management is confident of growing double digit in FY22 with growth coming back from 2Q given order backlog and robust order intake. They anticipate DLM to also post robust growth of 20% YoY CC in FY22.
Outlook
We arrive at a TP of INR 1088 (earlier INR 912) on Sep-23 EPS (roll over) of INR 54.4. Cyient is currently trading at 21X/18X on FY22/23 earnings of INR 44.9/53 respectively, which is significantly lower as compared to its ER&D peers. Maintain BUY.
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