CYIENT - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 3.1
| Stock Code | CYIENT | Market Cap | 12,842 Cr. | Current Price | 1,156 ₹ | High / Low | 2,042 ₹ |
| Stock P/E | 29.4 | Book Value | 348 ₹ | Dividend Yield | 2.25 % | ROCE | 15.6 % |
| ROE | 13.2 % | Face Value | 5.00 ₹ | DMA 50 | 1,159 ₹ | DMA 200 | 1,276 ₹ |
| Chg in FII Hold | -3.81 % | Chg in DII Hold | 2.79 % | PAT Qtr | 128 Cr. | PAT Prev Qtr | 119 Cr. |
| RSI | 47.1 | MACD | -1.34 | Volume | 4,96,006 | Avg Vol 1Wk | 4,53,937 |
| Low price | 1,050 ₹ | High price | 2,042 ₹ | PEG Ratio | -3.66 | Debt to equity | 0.02 |
| 52w Index | 10.6 % | Qtr Profit Var | -20.3 % | EPS | 40.8 ₹ | Industry PE | 31.6 |
📊 Analysis: CYIENT presents moderate fundamentals with ROE at 13.2% and ROCE at 15.6%, which are acceptable but not exceptional for long-term compounding. Valuation is fair with P/E at 29.4 compared to industry average of 31.6. Dividend yield at 2.25% adds shareholder value, and debt-to-equity at 0.02 reflects a nearly debt-free balance sheet. However, PEG ratio (-3.66) signals weak earnings growth outlook, and quarterly profit variance (-20.3%) raises concerns. Technicals show RSI at 47.1 (neutral), MACD slightly negative (-1.34), and price below 200 DMA (1,276 ₹), indicating cautious sentiment.
💡 Entry Zone: Ideal entry would be in the 1,050–1,120 ₹ range, closer to support levels and valuation comfort. Current price (1,156 ₹) is slightly above fair entry zone, making patience advisable for better risk-reward.
📈 Exit Strategy: If already holding, maintain positions for medium-term (12–24 months) given stable ROE/ROCE and dividend yield. Exit near 1,300–1,350 ₹ resistance if earnings growth does not improve. Long-term holding is viable only if profit growth stabilizes and PEG ratio turns positive.
Positive
- 📌 ROE (13.2%) and ROCE (15.6%) support moderate compounding potential
- 📌 Dividend yield of 2.25% provides shareholder returns
- 📌 Debt-to-equity at 0.02 indicates strong financial stability
- 📌 EPS at 40.8 ₹ reflects reasonable profitability
Limitation
- ⚠️ Negative PEG (-3.66) highlights weak growth outlook
- ⚠️ Quarterly profit variance (-20.3%) raises concerns
- ⚠️ Price below 200 DMA (1,276 ₹) indicates bearish trend
- ⚠️ FII holding decreased (-3.81%)
Company Negative News
- ❌ Quarterly PAT decline from 119 Cr. to 128 Cr. with -20.3% variance
- ❌ Reduced foreign institutional confidence (FII holdings down)
Company Positive News
- ✅ DII holding increased (+2.79%)
- ✅ Dividend yield supports investor returns
Industry
- 🏦 Industry PE at 31.6, sector moderately valued
- 🏦 IT/engineering services sector remains resilient but faces growth moderation
Conclusion
🔎 CYIENT is a moderately attractive candidate for medium-term investment with fair valuation, dividend yield, and low debt. Entry near 1,050–1,120 ₹ offers margin of safety. Existing holders can maintain positions for 12–24 months, targeting exits near 1,300–1,350 ₹ unless earnings growth improves. Long-term compounding potential is limited unless profit trajectory strengthens and PEG ratio turns positive.
Would you like me to extend this into a peer benchmarking overlay comparing CYIENT against IT mid-cap peers like LTTS, KPIT, and Tata Elxsi to highlight relative valuation comfort zones?
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