Prabhudas Leeladhar’s research report about Cyient
Cyient’s performance in the December 2024 quarter was in line with our estimates, but the outlook for the fourth quarter, i.e. March 2025, is extremely disappointing. The main reason for this is the collection of project based revenue in a fixed time. Due to closure of projects and non-availability of immediate alternatives, there are fluctuations in the performance of some segments of the company.
However, the rest of the company’s portfolio is stable and better deals are expected to be achieved. Also, several measures have been taken to deal with the fluctuations present in some segments. However, brokerage firm Prabhudas Lilladher believes that a large portion of non-annuity revenues is significant and will take several quarters to stabilise.
The departure of the CEO after implementing cost control measures came as a surprise. Till the new appointment, Krishna Bodanapu will continue to work as the CEO of the company. The brokerage firm has advised to buy the shares of the company and has kept the target price at Rs 2,010.
The company has improved margins on a low base and this trend may continue in the times to come. Hence, the brokerage firm has not made any major change in the margins.
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