Shares of Cyient gained as much as 8% to their day’s high of Rs 1,055 on the BSE on Wednesday after the IT services company laid out its growth and margin priorities at its investor day, with brokerages differing on the pace and strength of its recovery.
Cyient said its immediate focus is to reignite growth, targeting double-digit year-on-year revenue growth and steady quarter-on-quarter growth through FY28-29. In the near term, the company is targeting EBIT margins of more than 15%, while its medium- to long-term goal is to deliver industry-leading growth with EBIT margins above 16%.
The company said its go-to-market (GTM) team is now fully in place to pursue larger deals and gradually move the business from project-based work towards annuity-based contracts, which provide greater revenue predictability. Project-based work currently makes up around 40% of the business.
Management said Cyient's large-deal pipeline has reached a record high, with nine qualified deals carrying a combined total contract value of around $300 million.
Cyient described FY26 as a year of stabilisation after several strategic interventions. It expects FY27 and FY28 to mark the start of a recovery driven by its revamped strategy.
The company has also made progress on margins, with EBIT margin rising to 13.2% in Q1 FY27 from around 12.2%. Management aims to reach the 15% medium-term target through AI-led revenue leverage and operating cost efficiencies.
The domestic brokerage continues to value the Digital, Engineering and Technology (DET) business at 9x FY28E EPS. This reflects gradual margin improvement, a muted organic growth outlook and continued execution risk. The brokerage also continues to apply a holding company discount to the value of the DLM stake.
Nuvama retained its Hold rating on Cyient while raising its target price to Rs 1,050 (7.5% upside) from Rs 900. The brokerage said the company's total addressable market (TAM) has expanded significantly, from around $100 billion to $2.4-3.2 trillion, creating a larger long-term growth opportunity.
Nuvama highlighted Cyient's three-year roadmap, which envisages stabilisation in FY26, transformation in FY27 and scaling in FY28. The company has set an FY31 objective of achieving industry-leading growth alongside a 16% EBIT margin. Cyient Semiconductors, meanwhile, is targeting nearly 4X revenue growth, a gross margin of more than 40% and an EBIT margin above 20% by FY31.
The company has also introduced CYINGINE, a platform designed to help clients scale AI adoption and deliver measurable engineering outcomes.
PL Capital said the key monitorables remain the success rate and execution within Cyient's marquee accounts. The brokerage has not incorporated Tao Digital's financials as the acquisition is yet to be completed.
It has largely retained its FY27E and FY28E DET USD revenue growth estimates while marginally raising its EBIT margin estimates to 13.5% and 14.0%, respectively, from 13.2% and 13.7% earlier. PL Capital maintained its Hold rating with a target price of Rs 1,040, an upside of 6.5% from the last closing price.
