Buy / Sell Cyient share
In a few ideas for profit from Moneycontrol Pro, Nitin Sharma of Moneycontrol.com spoke about a stock he is tracking closely, Cyient.
Cyient is a midsize IT firm with around Rs 4,500 crore in revenue. Division wise, the services segment contributes around 82 percent while design-led manufacturing, the DLM segment, contributes the rest.
The company generates an EBITDA margin of 18 percent while EBIT margin ranges between 13 percent and 14 percent. The margin improvement in recent years came from employee cost rationalisation.
In the fourth quarter, the company's revenue grew by 8.1 percent year-on-year driven by the utilities and portfolio sub-segment. The DLM segment saw a decline of 10.8 percent year-on-year due to global semiconductor shortage.
Sharma said, sequentially, the company’s EBIT margin expanded by 58 basis point to 14.5 percent during the quarter. Along with this, the company won seven large deals during the quarter. Its attrition was at 26.9 percent, which remains a major pain point.
The company recently acquired Citec and Grit Consulting to augment its position in the plant engineering and consulting space.
At the current market price, Cyient trades at an FY24 PE of 14.2 times, which is a significant discount to its peers. With a dividend yield of more than 3 percent it makes it an attractive pick. Sharma believes long-term investors can buy Cyient.
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