'Shocking quarter': Cyient cuts FY25 guidance; analysts share stock price target 

Cyient Ltd, whose shares are down 17.50 per cent in the past one year, reported a weak set of June quarter results, across all the fronts. The IT firm reported revenue and margin, which were far lower than analyst estimates. The Cyient management also lowered its FY25 DET (digital, engineering and technology) revenue growth guidance sharply to flat YoY from high single digits growth, which analysts said was the lowest among its midcap and smallcap peers.

"Cyient now requires 3 per cent-plus CQGR to achieve FY25 flat YoY revenue guidance –a tall ask in our view, given broad-based weakness. Cheap valuations limit potential downside. We are cutting consolidated FY25/26 EPS by 15 per cent/12 per cent due to a sharp cut in DLM estimates," Nuvama Institutional Equities said.

Calling Q1 results as shocking, Nuvama said only reasonable valuations will save the day for Cyient.

The domestic brokerage has rolled forward its earnings estimates to 20 times September 2026 PE from 22 times on lower growth visibility, yielding target price of Rs 1,840 from Rs 2,120 earlier.

"Cyient (DET) reported a miss on moderated expectations. Top-line performance was uninspiring (5% qoq decline) with revenue decline across verticals and flowed through the P&L, resulting in 250 bps qoq EBIT margin decline. The company expects flat revenues in FY2025E (high-single digit growth earlier), which is still aggressive, in our view. We cut our earnings estimate by 14-18 per cent over FY2025-27E. The foundational strength of the model remains though we take cognizance of a few headwinds in our revised estimates," said Kotak Institutional Equities.

This brokerage retained its 'Buy' call on the stock but lowered its fair value target on the stock to Rs 2,050 from Rs2,275 earlier.

The Cyient management expects growth to recover from Q2FY25, with H2 stronger than H1.

Nuvama said EBIT margin of DET business came in at 13.5 per cent, a sharp dip of 250 basis points sequentially due to revenue decline headwind. Margin guidance was retracted for FY25 due to an uncertain growth environment. Cyient is aiming to achieve 16 per cent exit rate margin by Q4FY25 – versus 16 per cent for full year FY25 earlier.

"Cyient sharply lowered guidance and shall be one of the lowest among midcap/small-cap peers – that also appears a tall ask currently. The broad-based decline across verticals raises uncertainty on growth recovery path. We remain negative on Cyient, even as inexpensive valuations limit the downside potential," Nuvama said,

The brokerage values Cyient's DET business at 20 times FY26E PE and DLM at current market-cap by applying a 20 per cent holdco discount.