On Friday, JPMorgan reiterated its Overweight rating on CYIENT (CYL:IN) stock, maintaining a price target of INR2,250.00. The firm's analysis highlighted that Cyient delivered an in-line quarter, which included growth, margins, and guidance, marking a notable performance amid recent industry trends.
Cyient's Design-led Manufacturing (DET) business revenues saw a 1.3% constant currency (CC) quarter-over-quarter (QoQ) increase, driven by strong growth in the Transport (Aerospace), Telecom, and New Growth Areas. The company's Ebit margins improved by 75 basis points QoQ to 14.2%, as the negative impact from wage increases was counterbalanced by operating leverage.
The company has maintained its forecast for FY25 with constant currency revenue growth expected to be flat and fourth-quarter exit margins projected at 16%. Cyient anticipates that the third-quarter growth will be stronger than the second quarter due to the ramp-up of deals closed across all four verticals. Furthermore, the company expects a stronger first half of the year (H1H) margin and broad-based growth throughout the second half of the year (2H).
Despite the stock's 11% decline over the past month, JPMorgan suggests that the in-line results coupled with positive management commentary could prompt a relief rally. The firm's stance on Cyient remains Overweight, considering the stock's valuation at 23 times its one-year forward Price to Earnings (PE) ratio to be attractive.
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