News

Shares of an IT-enabled services company and a constituent of the BSE 500, remain in focus after JP Morgan reiterated an ‘Overweight’ rating with a target price of Rs 1,500.

At the current market price of Rs 1,143.20, the brokerage sees an upside of about Rs 357 per share. The company’s market capitalisation stands at Rs 12,701 crore.

Notably, LIC holds 34,47,858 shares in this IT stock, which represents a 3.1 per cent stake in the company.

Over the past year, the stock has been down over 44 per cent, while it has delivered 116 per cent returns over five years. The stock under discussion is Cyient.

The stock ended the latest session at Rs 1,143.20, up 0.42 per cent, with a day’s high of Rs 1,157.60 and a low of Rs 1,130.80. Despite the recent uptick, the stock is still sharply lower from its 52-week high of Rs 2,099.90 and closer to its 52-week low of Rs 1,050.20.

A key positive highlighted by JP Morgan is Cyient’s move to strengthen its semiconductor business. The company announced it will acquire a more than 65 per cent stake in Kinetic Technologies, a US-based semiconductor firm specialising in analog and mixed-signal integrated circuit design. The acquisition is valued at $93 million, implying an EV-to-revenue multiple of 3.5x.

JP Morgan noted that Kinetic’s expected revenue of $41 million in CY25 compares favourably with Cyient’s organic semiconductor business revenue of $25 million (annualised for FY26).

Post-acquisition, the DET and semiconductor business together are expected to contribute around 6 per cent of Cyient’s FY26 revenues.

The deal should help Cyient scale up its semiconductor operations faster, a segment where the company has increased focus after carving it out earlier this year with a separate management team.

The brokerage acknowledged that the acquisition multiple is higher than the average 1.9x paid for Cyient’s last three deals, but believes the strategic fit supports long-term growth.

In Q2FY26, Cyient Ltd reported total revenue of Rs 1,831 crore, down 3.6 per cent YoY from Rs 1,900.20 crore in Q2FY25. Profitability also saw a decline over the year, with Profit Before Tax (PBT) at Rs201.40 crore, down 20.8 per cent YoY from Rs254.30 crore, and Profit After Tax (PAT) at Rs142.90 crore, down 23.4 per cent YoY.

Earnings per share (EPS) fell to Rs 11.48, a 28.9 per cent YoY decline. Despite a slight increase in total expenses to Rs 1,650.30 crore (up 0.3 per cent YoY).