Ambit Capital Initiates Coverage on Cyient (CYL:IN) with Buy Rating and INR 2,450 Price Target: Analysts Bullish on Aerospace, Energy, and Semiconductor Diversification
In a recent report, Ambit Capital has started coverage on Cyient (CYL:IN) with a Buy rating and a price target of INR 2,450. The investment firm highlights Cyient's expansion into energy, utilities, and semiconductors as a strategic move to complement its strong presence in the aerospace sector. Despite short-term project delays, Ambit Capital remains optimistic about Cyient's long-term prospects, citing a 13-year order backlog and sustained demand for new aircraft.
Ambit Capital forecasts continued robust demand in aerospace and energy security/transition for Cyient, with the company poised to benefit from increased investments in aerospace supply chains. This is expected to enhance production efficiency and boost maintenance, repair, and overhaul (MRO) services. Furthermore, the firm anticipates growth opportunities in sustainability, semiconductors, and automotive sectors.
The analysts at Ambit Capital project double-digit earnings before tax (DET) growth for Cyient, with an 8.5% increase in FY26 and an 8.3% increase in FY27E, following a softer FY25E. The DET EBIT margin is forecasted to improve by 120 basis points over FY26/27E to 15.7%. Currently, Cyient's DET valuations are trading at a discount of approximately 50% compared to its engineering research and development (ER&D) peers.
The price target of INR 2,450 set by Ambit Capital is based on 30 times the projected FY26 earnings per share (EPS). This valuation reflects the firm's confidence in Cyient's growth potential and market positioning relative to its industry counterparts.
In conclusion, Ambit Capital's bullish outlook on Cyient underscores the company's strengths in key sectors and its potential for future growth. Investors may consider this analysis when making informed decisions about their investment portfolios, taking into account the firm's recommendations and price target. Stay updated on the latest market insights and investment opportunities for potential financial gains.
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