Cyient Share Price: Buy Cyient, Target Price Rs 1138 : ICICI Securities
Cyient Ltd., incorporated in 1991, is a mid-cap company (having a market capitalization of Rs 10081.36 Crore) operating in the computer software industry.
The main products/revenue segments of Cyient Ltd. include software development costs for the year ending March 31, 2020.
For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 1230.60 Crore, up 2.08% from last quarter, total revenue of Rs 1205.50 Crore and up up 8.58% from the same quarter last year, total revenue of Rs 1133.40 Crore. The company reported a net profit after tax of Rs 154.20 Crore last quarter.
The brokerage believes that the valuations are not expensive and the transaction is accretive to EPS from Y1. Overall, the acquisition is accretive on all profitability ratios (including EV/EBIT). Citec has a higher EBITDA margin of 19% compared to Cyient’s 18.1% at the end of FY22. It incorporates an improvement in ETR of 50 basis points (26.5% compared to 27 % previously) thanks to the benefits of lower taxes in Europe. We are revising our EPS estimates upwards by around 3%/8% for FY23E/FY24E. It continues with the BUY rating for Cyient and values the company at 18x FY24E EPS of Rs63, arriving at a target price of Rs1,138 (previously: Rs1,037).
The promoters held 23.41% of the company’s capital as of March 31, 2022, while the FIIs held 35.38% and the DIIs 21.97%.
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