Cyient: Why IT Stock Slipped 23% In 1-Day? Should You Buy?

Mid cap IT software firm Cyient shares today recorded steep decline of 23.28% on Bombay Stock Exchange (BSE) to settle at Rs 1344.70 apiece. The sharp fall in shares of Cyient took place after it reported sluggish December quarter results and CEO Karthikeyan Natarajan’s resignation due to reduced FY25 growth and margin guidance. Cyient shares hit lower circuits thrice in just 1-day. The stock also traded 52-week low and witnessed spurt in volume by more than 8.17 times. The company has a market capitalisation of Rs 14,928.63 crore. Its return on equity (ROE) is 30.47%. Cyient shares slipped 23.41% in last 1-week and 25.57% year-to-date (YTD). Check details below:

Resignation of CEO Karthikeyan Natarajan

According to the regulatory filing of Cyient dated January 23, 2025, “this is to inform that Mr. Karthikeyan Natarajan, (DIN 03099771) has resigned as Executive Director and Chief Executive Officer of the Company on 23 January 2025. The said resignation was noted by the Board of Directors.”

Cyient Financials

The company announced its financial results for the quarter ending December 31, 2024 on January 23, 2024. The company declared its revenue from operations at Rs 1480 crore with YoY degrowth at 0.8% and QoQ growth at 2.1%. Cyient DET announced its EBIT at Rs 200 crore, indicating a margin of 13.5%. Cyient DET declared the profit after tax (PAT) for the quarter ended December 31, 2024 at Rs 124 crore posting an YoY degrowth of 28.3%. Meanwhile, the company’s order intake surged 5% YoY. Cyient DET (Digital, Engineering, and Technology) segment.

Cyient now anticipates its Digital, Engineering and Technology (DET) business to declared a revenue fall of 2.7% year-on-year in constant currency terms for financial year 2025 as compared to its previous guidance of flat growth. Earleir, Cyient guided for EBIT margins to be at 16% by fourth quarter end, which it now anticipates to remain around 13.5%.

The management attributed the revenue growth guidance cut to projects transfer and the slash in EBIT margin guidance as a result of aggressive wage hikes it offered. Cyient will reportedly target 16% EBIT margin in FY2026, but focus first on pushing revenue growth.

Cyient Dividend History & Dividend Yield

The IT firm announced a total of 40 dividends since August 11, 2000. In last 1-year, Cyient Ltd recommended an equity dividend amounting to Rs 30.00 per share. If the current share price of Cyient is taken into consideration, it offers a dividend yield of 2.23%.

Should You Buy Cyient Shares

Several leading brokerages houses issued buy, add, and sell call to the IT stock. Prabhudas Lilladher recommended buy call to Cyient shares with target price of Rs 2010 per share. The analyst said, “we are valuing the company on SOTP basis. However, we are shifting our DLM valuation to PLe vs (market valuation earlier) with a holding company discount of 20%, and the DET business at 23x PE FY27E EPS. We expect CYL’s DET USD revenue and INR PAT to grow at a CAGR of 7.3% and 20.1% over FY25-FY27E, respectively. Our SOTP-based target price of Rs. 2,010 implies an upside of 15%.”

Motilal Oswal suggest sell call to Cyient shares with reduced target price of Rs 1350 from Rs 2100 previously. IIFL suggested add call to Cyient shares with target price of Rs 1670 from Rs 1810 recommended previously. Out of a total of 23 analysts tracking Cyient shares, 12 recommended buy rating, seven suggested hold and remaining 4 opted for sell call.

Cyient Shares Performance

The 52-week high price of Cyient Ltd shares on BSE is Rs 2265.95 per share (as on 08/02/2024) and 52-week low price is Rs 1328.90 per share (as on Jan 24, 2025). Cyient shares slipped 28.68% in last 6-months, fell 34.32% in last 1-year, gained 55.20% in last 1-year, and offered return of 55.20% in last 2-years.

Cyient About

Cyient is a global leading ER&D services provider, delivering Intelligent Engineering solutions for a digital, autonomous, and sustainable future for over 300 customers, including 30% of the top 100 global innovators, according to its LinkedIn page.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Moneydaily.in, the Author, and the respective Brokerage House will not be held accountable for any losses caused as a result of decisions based on the article. Moneydaily.in advises readers to do their own research or consult a SEBI registered investment advisor before making any investment decisions.