Cyient shares crash 10% post Q4 results; should you buy, sell or hold?

Shares of Cyient tanked about 10 per cent during the trading session on Friday after the company reported a disappointing set of performance in the March 2025 quarter and withheld its guidance citing uncertain demand. Brokerage firms, however, remain mixed on the stock post quarterly earnings and led to target price cuts and downgrades following the results.

Cyient reported a 39.3 per cent quarter-on-quarter (QoQ) rise in its net profit at Rs 170.4 crore in the March 2025 quarter, while its revenue fell 0.9 per cent QoQ to Rs 1,909.2 crore. However, its Ebit margins improved to 12.30 per cent. The midcap IT firm company board declared a dividend of Rs 14 per share for the shareholders.

Cyient's Design, Engineering and Technology (DET) segment, a key business unit, reported a 3 per cent QoQ drop in dollar revenue to $170 million, while order intake plunged 41 per cent sequentially to $184.2 million. Constant currency revenue fell 1.9 per during the period.

Following the announcement of results, shares of Cyient cracked 9.5 per cent to Rs 1,125 during the trading session Friday, with its total market capitalization slipping below Rs 12,500 crore mark. The stock had settled at Rs 1,243 in the previous trading session on Thursday.

Cyient's DET segment reported another quarter of lackluster operating performance. Increased macro uncertainty contributed to the revenue miss on moderated expectations. The business is likely to remain challenged through 1HFY26, said Kotak Institutional Equities.

"We do not expect a meaningful recovery in FY2026E. Some tweaks in the organization and focus areas are likely under the new CEO. These could require additional investments, reflecting a cut in margin guidance and a likely cut in dividend payout. We cut EPS estimates by 8-14 per cent and lower fair value to Rs 1,150," it added with a 'reduce' rating.

Cyient’s DET segment reported QoQ CC de-growth of 1.9 per cent, primarily due to softness in March influenced by global uncertainties. This softness is expected to continue in the Q1FY26E as well. The global uncertainty led to delays in decision making and impacted verticals like connectivity and may further impact aerospace in the coming quarters, said HDFC Securities.

"Amidst the current macroeconomic uncertainty, Cyient has decided to temporarily stop providing guidance for FY26E. The company secured six large deals in Q4, including two in aerospace and two in communications, with three from its top 10 clients. We cut our revenue and EPS estimates by factoring in slower growth. We maintain our 'add' rating with a target price of Rs 1,400," it said.

"We maintain our 'sell' rating on the stock as we believe a weak 4Q and seasonally weak 1H could lead to lower revenue growth in FY26, and margins could be impacted in a similar vein," said Motilal Oswal Financial Services. "We value the company’s stake in DLM at a market valuation with a holding company discount of 20 per cent."

It cut our estimates by 5 per cent for FY26E/FY27E, largely on recalibration in margin expectations and industry-wide uncertainties for key growth areas such as sustainability and aerospace. The brokerage values the DET business at 17 times FY27E EPS to arrive at a target price of Rs 1,120.

Delayed or paused projects in aerospace and manufacturing also contributed to the subdued performance, aligning with the broader macro caution and tariff-related uncertainty. Deal closures in Q2 may be slower, but awarded deals are expected to proceed with a minor shift in schedule, said Antique Stock Broking.

"It expects the margin to stabilize at around 15% over 24 months with continued cost control framework, wage commitments, and more outcome-focused investment. Due to weak exit in 4QFY25 results, we reduce our FY26/ 27 EPS estimates by 6 per cent and reduce Cyient's DET business forward PE multiple to 20 times leading to a reduction in target to Rs 1,675 (from Rs 1,900), it said.