Cyient Ltd (Cyient) reported a decent set of Q3FY21 numbers. The highlight of the quarter was that the company made structural changes to its organization, which will allow it to accelerate its growth and improve its profitability. The company has streamlined the organization which will realign its go-to-market strategy, focus on big contracts, process discipline and incentives to align employees for better sales productivity. We believe this will help improve the outlook for earnings and margins over the longer term and will be key to reassessing the stock.

Assessment and outlook

The company has enjoyed good momentum in large transactions and backlog which we believe will drive long-term growth. This, coupled with the restructuring of his organization with the aim of accelerating growth, improving sales, focusing on large contracts (as won in this quarter), seeking customers and increasing sales. digital contracts and DLM bodes well for revenue growth. In addition, the improvement in the trajectory of margins encourages us to be positive on the stock. Therefore, we maintain BUY with a revised target price of Rs. 690 (14x P / E on BPA FY23E) (previous target price was Rs. 440 / share).

For more details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Cyient_CoUpdate_Jan21.pdf

Cyient Limited shares were last trading in BSE at Rs.602.85 from the previous close of Rs. 507.45. The total number of shares traded during the day was 406,189 in over 22,400 trades.

The share hit an intraday high of Rs. 608.9 and intraday low of 511. Net turnover during the day was Rs. 233,453,803.