Cyient said reaccelerating growth is its near-term priority, with the company 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 ambition is to deliver industry-leading growth alongside EBIT margins of over 16%.
The company said its go-to-market (GTM) team is now in place to pursue larger deals and shift the business away from project-based work towards annuity-based contracts, which offer greater revenue predictability. Project-based work currently accounts for around 40% of the business.
Cyient’s large-deal pipeline is currently at a record high, with nine qualified deals representing a total contract value of around $300 million, management said.
The company described FY26 as a year of stabilisation following several strategic interventions and expects FY27 and FY28 to mark the beginning of a recovery from its revamped strategy.
On margins, Cyient has already made progress, with EBIT margin reaching 13.2% in Q1 FY27, up from around 12.2%. Management aims to reach the 15% medium-term target through AI-led revenue leverage and operating cost efficiencies.
Key metrics that management will track include double-digit order inflow growth, particularly from large deals, and continued margin expansion towards 15%, according to JPMorgan.
Brokerage reactions
JPMorgan has an ‘Overweight’ rating on Cyient with a price target of ₹1,050 per share. The brokerage said Cyient’s revamped strategy appears to be moving in the right direction, but execution will be key for a potential re-rating of the stock.
JPMorgan highlighted the company’s focus on large deals, the shift towards annuity-based revenue and its margin expansion plans as key positives from the investor day.
Meanwhile, Motilal Oswal has reiterated its ‘Sell’ rating on Cyient with a price target of ₹740, implying a downside of around 24% from Tuesday’s close.
The brokerage said it would wait for better evidence of execution before turning constructive, as the recovery remains back-ended and FY27 organic growth is expected to remain broadly flat.
While Motilal Oswal remains positive on Cyient’s semiconductor opportunity, it said it would wait for proof of concept before assigning significant valuation to the business.
Emkay Global has retained its ‘Reduce’ rating on Cyient with a price target of ₹900.
The brokerage said management appears to have addressed the company’s key growth impediments, with a strategy and the necessary levers now in place. However, it said a change in its stance and rating would depend on execution.
Cyient is transitioning from traditional engineering research and development (ER&D) services towards a broader lifecycle engineering services model. The company estimates its addressable market could expand from the traditional ER&D opportunity of around $80-100 billion to a full engineering lifecycle opportunity of $2.4-3.2 trillion.
Shares of Cyient ended 7.26% higher at ₹975.05 on Tuesday, and the stock has gained more than 18% over the past month.
