“BUY” This Mid Cap IT Stock With A Target Price of Rs. 1200: Axis Securities

Axis Securities Limited one of the largest retail brokering companies of India has placed a buy call on the stock of Cyient Limited with a target price of Rs. 1,200. The brokerage expects the stock to rise 12 percent from its present market price of Rs. 1,074 over the target period of 6-9 months. Cyient is a global company that provides engineering and technology solutions all around the world.

Q2FY22 results of Cyient Ltd

Axis Securities in its research report has said that "Cyient reported robust results in Q2FY22 with revenue for the quarter at Rs 1,112 Cr, improving by 4.6 % QoQ and 11.2% YoY. Operating Margins expanded by 90bps QoQ to 15.5%. Operating margins of the Services segment grew by 90bps QoQ and stood at 15.5%. DLM margins stood highest at 6.8%, advancing from 5.6% in the quarter before and were driven by the company's strong execution during the quarter. The company's Net profit for Q2FY22 stood at Rs 121 Cr, registering a growth of 5.5% QoQ. The management expects double-digit revenue growth for FY22 with the Communications growth to be led by Network Transformation, E&U (to be benefited from IG Partners acquisition), and Transportation (to be led by the Rail)."

Buy Cyient Ltd with a target price of Rs. 1200

The brokerage has claimed that the company's "DLM business is expected to grow in the range of 15% to 20% and Operating Margins to improve by 250bps-300bps. The deal pipeline continues to look healthy at $63 Mn (6 deals in the pipeline). Growth in key accounts and a few large deal wins (4 key deals in fibre, wireless, system integration, and 5G rollout) and accelerated deployment of 5G led segment significantly contributed to the Communication vertical's growth. The company's outlook remains positive, supported by robust investments in technology-led network transformation and accelerated deployment of broadband and wireless infrastructure. We recommend a BUY rating on the stock with a target price of Rs 1,200/share."

Disclaimer

The stock has been picked from the brokerage report of Axis Securities Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.