Buy Cyient; target of Rs 598: SPA Research

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SPA Research's report on Cyient

Cyient reported consolidated revenue growth of 6.5% YoY and 7% QoQ to INR 9645 mn (US$ 150.1 mn) in Q2FY18. Core services business continued with its strong performance and reported revenue growth of 4.2% QoQ and 9.2% YoY to highest ever revenue of $134.3 mn. Growth in services business was driven by Communication, Transportation and Aerospace & Defence. DLM business reported operating profit vis-à-vis loss in last quarter.

Outlook

CYL had guided for double-digit growth in the Services business, whereas DLM is expected to clock revenue growth of 20%. Company plans to focus on infrastructure management services and development of new solutions with analytics, electronics and design led manufacturing to drive growth. We maintain our BUY rating with TP of INR 598 (15x FY19E EPS).

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