Cyient's Q4 Results Decline, but Brokerage Maintains BUY Rating with a Target Price of INR 1,675.
Cyient's Q4FY25 results fell short of expectations, with Digital, Engineering & Technology (DET) segment revenue reaching USD 170 million, a 1.9% decrease from the previous quarter. Despite this weaker performance, brokerage reports maintain a BUY rating on the stock.
Slowdown in Growth and Uncertainties
The company refrained from providing any annual guidance for this year, citing the impact of global economic conditions and a slowdown in new growth areas on its performance. This indicates the difficulty in forecasting future prospects.
Margin Decline and Weak Order Intake
Cyient's EBIT margin decreased to 13% this quarter, below the brokerage's estimate of 13.5%. Additionally, DET's order intake declined from USD 312.3 million in the previous quarter to USD 184.2 million.
Investment Recommendation: BUY Rating Maintained
Brokerages maintain a BUY rating on Cyient, setting a target price of INR 1,675. This is a 43% increase from the current CMP (INR 1,243). While uncertainty remains regarding the company's stability, the stock's current valuation is considered attractive.
Advice for Investors
Brokerages suggest that despite the recent results, Cyient's performance is likely to improve. Therefore, investors may currently retain this stock in their portfolio. However, it is advisable to consult with a financial advisor before making any investment decisions.
