Broker's call: Cyient (Buy)

BL Chennai Bureau | Updated on: Jun 07, 2022

ICICI Securities

Target: ₹977

CMP: ₹829.25

Cyient announced acquisition of Celfinet, a Portugal-based international wireless engineering services company focused on providing end-to-end ‘network planning and performance optimisation’ services. With this acquisition, Cyient aims to strengthen its wireless engineering practice to support communication service providers (CSPs) and enterprises in deploying their pervasive connectivity networks at scale.

This will also enable enterprises to build networks to harness the power of 5G and drive their own digital transformation journey. The communications vertical currently accounts for about 28 per cent of Cyient’s services revenue and grew 8 per cent YoY in FY22.

The acquisition will also strengthen Cyient’s presence in Europe, where Celfinet has a strong footprint, and help scale Cyient’s wireless business across North America and Australia.

Cyient is currently trading at 15x/12x on FY23/FY24 EPS of ₹53/65. We continue with our Buy rating for Cyient and value the stock at 15x FY24 EPS of ₹65, arriving at a target price of ₹977 (earlier: ₹961)

Published on June 07, 2022
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