Cyient shares rally 7%; IT firm signs MoU with Japanese eVTOL aircraft manufacturer

Shares of Cyient Ltd climbed 7 per cent in Friday's trade amid across-the-board buying in the IT pack. Mirae Asset Capital Markets initiated coverage on the stock today with a 'Buy' rating and a target of Rs 2,710. The stock was sustaining intraday gains, as the IT firm entered into a memorandum of understanding with SkyDrive Inc, a Japanese eVTOL aircraft manufacturer, to work in partnership across product development, engineering, manufacturing, and digital services.

In a filing to BSE, the engineering and technology solutions provider talked about Urban Air Mobility (UAM) and its potential to revolutionise transportation of goods inter and intra-cities, providing a faster and more efficient alternative to traditional ground-based transportation. It sad the UAM aircraft market is expected to grow to around $25-30 billion by 2030.

In the midst of the development, the stock rose 6.83 per cent to hit a high of Rs 2,297.85. The gains were aided by across-the-board rally in the IT pack following better-than-expected numbers of Infosys and TCS.

At , the stock is trading at 25 times its FY25 DET earnings estimates (adjusted for DLM), at a 35 per cent discount to LTTS.

"Using the SoTP methodology, we assign 28 times to December 2025E PAT of the DET business and a 20% holdco discount to the market cap of Cyient DLM, implying target price of Rs 2,710. Therefore, we initiate the coverage on the stock with a BUY rating. We prefer Cyient because of improving earnings outlook, high customer stickiness, domain expertise and healthy cash conversions," Mirae Asset Capital Markets said.

“Engineered in India has an immense potential to contribute to the future of Urban Air Mobility (UAM) globally. By partnering with Cyient, SkyDrive has the opportunity to leverage India's engineering ecosystem, which is rich in talent, innovation, and technology. This collaboration will enable SkyDrive to cater to the global Urban Air Mobility (UAM) market, including India,” said BVR Mohan Reddy, Founder Chairman and Board Member, Cyient.

“By the year 2030, the UAM sector is poised to transform air mobility globally. Today marks a momentous milestone for us as we proudly become India's first partner with Japan's foremost UAM eVTOL manufacturer, SkyDrive,” said Karthikeyan Natarajan, Executive Director & CEO, Cyient.

Natarajan said the alliance is a testament to his company’s dedication to pioneering intelligent engineering solutions for a sustainable, autonomous future of urban air mobility.

“I look forward to a remarkable journey of collaborative innovation with SkyDrive in mobility revolution,” he said

Also read: Stock recommendations by analyst for January 12, 2024: RVNL, Exide Industries and LT Foods

Also read: Infibeam Avenues, YES Bank, Easy Trip Planners, Suzlon Energy shares see high volumes on NSE