Cyient surges 9%, nears 52-week high on healthy business outlook

Shares of Cyient rallied 9 per cent to Rs 1,409 on the BSE in Thursday’s intra-day trade after the IT firm said it remain confident in strong growth across the industry verticals. The stock was trading close to its 52-week high level of Rs 1,415, touched on May 22, 2023.

Cyient is engaged in providing global technology services and solutions specialising in geospatial, engineering design, IT solutions and data analytics. The Company specialises in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets.

Thus far in the calendar year 2023 (CY23), the stock price of Cyient has zoomed 74 per cent, as against 2.5 per cent rise in the S&P BSE Sensex.

On outlook, Cyient said FY24 will prove to be an exciting and transformational year for the Cyient group as they grow Cyient and Cyient DLM (Design Led Manufacturing) as separate entities. The new structure promises to boost the growth and ambitions of each organization in its own trajectory.

The company said it will continue to apply technology imaginatively to solve problems that matter across the high-growth sectors of transport, connectivity, sustainability, healthcare, automotive, semiconductor, and design-led manufacturing. The outlook is positive for Cyient DLM with the proposed Initial Public Offering (IPO) in the current fiscal year.

“The outlook for FY24 for Energy, Industrial, and Plant Engineering (EIP) segment remains positive, with a strong sentiment that we forecast strong growth across our sustainability business. This growth will be driven by increased investment from customers in areas such as digital twins, carbon capture and storage, autonomous operations, autonomous mining, and the expansion of digital factories,” Cyient said in its FY23 annual report.

As regards to utilities segment, the company said the outlook for the next fiscal year remains very positive, with opportunities to drive strong growth in the areas of grid modernization, transmission capacity, Intelligent Asset Management (IAM), and the integration of smart & micro grids.

On order guidance for FY24, the company indicated that on the back of strong demand for its services, robust order book with large deal wins and expected double digit growth across its large verticals of transportation, connectivity and sustainability, it is guiding for consolidated services revenue growth of 15-20 per cent.

Overall, from a macro standpoint, the business outlook remained strong with no material impact on the BUs, except for few sub-segments. All growth engines are firing well for the company. Aerospace, Communication, Mining and Auto are expected to deliver double-digit growth, while other segments are on the verge of recovery and should incrementally contribute to its overall growth in FY24E, Motilal Oswal Financial Services said.