Motilal Oswal: Cyient Delivers Better Than Expected Q1 Performance And Outlook
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Motilal Oswal Report
Cyient’s first quarter performance suggests revenue impact was not as bad as anticipated earlier. While demand-side challenges persist in some verticals, management indicated supply-side issues should not be a bottleneck going forward.
Outlook on growth from second quarter is much better than previously expected. As growth recovers and some of the restructuring costs are behind, margins should report sharp expansion over second half of the year.
We upgrade our FY21/FY22E EPS estimates by 25% on a better-than expected revenue and margin outlook. We await further evidence on execution and margin management before turning constructive on the stock.
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