CYIENT - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | CYIENT | Market Cap | 12,734 Cr. | Current Price | 1,144 ₹ | High / Low | 1,537 ₹ |
| Stock P/E | 28.0 | Book Value | 348 ₹ | Dividend Yield | 2.27 % | ROCE | 15.6 % |
| ROE | 13.2 % | Face Value | 5.00 ₹ | DMA 50 | 1,146 ₹ | DMA 200 | 1,239 ₹ |
| Chg in FII Hold | -2.28 % | Chg in DII Hold | 1.09 % | PAT Qtr | 89.5 Cr. | PAT Prev Qtr | 128 Cr. |
| RSI | 51.4 | MACD | -2.08 | Volume | 2,23,979 | Avg Vol 1Wk | 2,11,747 |
| Low price | 1,050 ₹ | High price | 1,537 ₹ | PEG Ratio | -3.48 | Debt to equity | 0.02 |
| 52w Index | 19.4 % | Qtr Profit Var | 25.5 % | EPS | 21.2 ₹ | Industry PE | 25.9 |
📊 Analysis: Cyient shows moderate fundamentals with ROE at 13.2% and ROCE at 15.6%, reflecting average efficiency. Debt-to-equity is very low (0.02), ensuring financial stability. Dividend yield of 2.27% provides decent income support. Current P/E of 28.0 is slightly above industry average (25.9), suggesting fair valuation. However, the PEG ratio is negative (-3.48), indicating weak growth prospects relative to valuation. Quarterly PAT declined from 128 Cr. to 89.5 Cr., raising concerns about earnings consistency. Technicals show neutral momentum with RSI at 51.4 and MACD negative (-2.08).
💰 Ideal Entry Zone: Considering DMA levels (50 DMA at 1,146 ₹, 200 DMA at 1,239 ₹) and support near 1,050 ₹, the ideal entry zone is 1,080–1,130 ₹. Current price (1,144 ₹) is near resistance, so staggered entry is advisable.
📈 Exit / Holding Strategy: For existing holders, medium-term holding (2–3 years) is advisable if earnings stabilize. Exit strategy: consider profit booking near 1,500–1,530 ₹ resistance zone. Long-term holding is viable only if ROE improves above 15% and profit growth resumes consistently.
Positive
- ✅ Low debt-to-equity (0.02) ensures financial safety.
- ✅ Dividend yield of 2.27% supports income investors.
- ✅ EPS of 21.2 ₹ provides earnings visibility.
- ✅ DII holdings increased (+1.09%), showing domestic institutional confidence.
Limitation
- ⚠️ Negative PEG ratio (-3.48) indicates weak growth prospects.
- ⚠️ ROE (13.2%) and ROCE (15.6%) are moderate compared to peers.
- ⚠️ Quarterly PAT decline raises concerns about earnings stability.
Company Negative News
- 📉 PAT dropped from 128 Cr. to 89.5 Cr.
- 📉 FII holdings decreased (-2.28%), showing reduced foreign confidence.
- 📉 MACD negative (-2.08), indicating weak momentum.
Company Positive News
- 📈 EPS of 21.2 ₹ supports valuation strength.
- 📈 DII holdings increased (+1.09%), reflecting domestic support.
- 📈 Dividend yield of 2.27% adds investor appeal.
Industry
- 🏦 Industry P/E at 25.9 suggests Cyient trades at a slight premium.
- 🏦 IT and engineering services sector has long-term demand potential driven by digital transformation and outsourcing trends.
Conclusion
🔎 Cyient is a financially stable company with low debt and decent dividend yield, but weak growth metrics and declining profits limit its attractiveness for long-term compounding. Ideal entry zone is 1,080–1,130 ₹. Suitable for medium-term holding (2–3 years), with exit near 1,500–1,530 ₹ resistance unless earnings growth improves.