Investment Memo: CYIENT

[s2If !current_user_can(access_s2member_level1)][lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

Our Rating: HOLD

Mehabe score: 5
G Factor: 5
Piotski Score: 6
The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 6.

Description

Cyient is engaged in providing global technology services and solutions specialising in geospatial, engineering design, analytics, network and operations solutions.(Source : 202003-01 Annual Report Page No:157)Site: CYIENTMain Symbol: CYIENT

Price Chart

Technical Analysis

• Stock trades at 946.0, above its 50dma 816.37. It also trades above its 200dma 652.3. The stock remains bullish on techicals
• The 52 week high is at 920.00 and the 52week low is at 267.85

Price Chart

P/E Chart

Sales and Margin

Strengths

– has been maintaining a healthy dividend payout of 44.73%

Weakness

– The company has delivered a poor sales growth of 5.96% over past five years.

Competition

– The industry trades at a mean P/E of 33.1x. Happiest Minds trades at the industry’s max P/E of 133.93x. CYIENT trades at a P/E of 28.6x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. CYIENT has a G-Factor of 5 and Piotski scoreof 6.
– Average 1 month return for industry is 20.9%. The max 1- month return was given by Happiest Minds: a return of 60.28 %

Quarterly Results

• Sales for period ended Jun 2021 is Rs 1058.0 cr compared to Rs 992.0 cr for period ended Jun 2020, a rise of 6.7%
• Operating Profits reported at Rs 186.0 cr for period ended Jun 2021 vis-vis 99.0 for period ended Jun 2020 .
• Operating Margins expanded 760.1 bps for period ended Jun 2021 vis-vis Jun 2020 .
• The EPS for Jun 2021 was Rs 10.44 compared to Rs 9.37 for previous quarter ended Mar 2021 and Rs 7.4 for Jun 2020

Profit & Loss Statement

Profit&Loss Comments

• Company reported sales of Rs 4199.0 cr for period ended TTM vis-vis sales of Rs 4132.0 cr for the period ended Mar 2021, a growth of 1.6%. The 3 year sales cagr stood at -3.1%.
• Operating margins expanded to 16.0% for period ended TTM vis-vis 14.0% for period ended Mar 2021, expansion of 200.0 bps.
• Net Profit reported at Rs 397.0 cr for period ended TTM vis-vis sales of Rs 364.0 cr for the period ended Mar 2021, rising 8.3%.
• Company reported a poor Net Profit CAGR of -6.0% over the last 3 years

Balance Sheet Statement

Cash Flow Statement

Cash Flow comments

• CashFlow from operating activities was positive.
• CashFlow from operating activities: Rs 856.0 cr for period ended Mar 2021 vis-vis Rs 582.0 cr for period ended Mar 2020

Sales Growth

Profit Growth Statement

Profit Growth Statement

Stock Price CAGR

Return of Equity

General Comments

– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 13.0% compared to 15.0% over the last 3 Years.
– The stock has given a return of 252% on a 1 Year basis vis-vis a return of 10% over the last 3 Years.
– The compounded sales growth on a TTM bassis is -7% vis-vis a compounded sales growth of 2% over the last 3 Years.
– The compounded profit growth on a TTM basis is 6% vis-vis a compounded profit growth of -4% over the last 3 Years.

Ratios

Shareholding Pattern

– FII shareholding has risen for the period ended Mar 2021. The Mar 2021 fii holding stood at 38.47% vis-vis 35.7% for Dec 2020
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 16.83% vis-vis 18.15% for Dec 2020

Conclusion

– has been maintaining a healthy dividend payout of 44.73% – The company has delivered a poor sales growth of 5.96% over past five years.

• The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
• Technically, the stock remains above its 50 DMA 816.37 and is trading at 946.0, thus bullish price action wise.
• Thus, overall we retain a HOLD on the stock.

[/s2If]
Join Our Telegram Group