Anand Rathi has recommended buying Cyient, setting a target price of Rs 2,230 in its latest research report dated October 30, 2024.

The report indicates a 2% quarter-on-quarter growth for Cyient, driven by growth across various verticals, although sustainability metrics declined by 6.4% sequentially.

The report mentions a total contract value (TCV) of $156.8 million, showing a 14.7% year-on-year decrease, with a book-to-bill ratio of 0.9x, below the four-quarter average of 1.2x.

Despite these challenges, the Q2 EBIT margin improved by 74 basis points quarter-on-quarter to 14.2%, although it decreased by 233 basis points year-on-year.

Management is optimistic about stronger growth in the second half of the fiscal year compared to the first half.

Anand Rathi has increased its earnings forecast for FY25 by 6.6%, primarily due to increased foreign exchange gains, while maintaining its estimates for FY25 and FY26.

The target price revision reflects a valuation of 26 times the expected FY27 earnings per share.