Cyient shares fall 6% post Q2 numbers; should you buy, sell or hold?

Cyient shares fell as much as 5.9 per cent to touch a day’s low of Rs 1,110 on BSE against its previous close of Rs 1,179.90 in Friday’s trade. The sharp decline in the stock came after the IT services company announced its financial results for the second quarter ending September 30, 2025. At last check, the shares had recovered most of their losses and were trading 0.87 per cent lower at Rs 1,169.65.

The company reported a consolidated revenue of Rs 1,781 crore for Q2FY26, marking a 4 per cent increase quarter-on-quarter (QoQ) but a 3.7 per cent decline year-on-year (YoY). The firm's profit after tax (PAT) saw a significant drop, declining 28.9 per cent YoY and 17.2 per cent QoQ to Rs 127.4 crore. Similarly, earnings before interest and taxes (EBIT) fell 27.5 per cent YoY to Rs 167.2 crore. On a positive note for shareholders, the company's board declared an interim dividend of Rs 16 per share, which it noted was the highest-ever in its history.

Following the quarterly performance, major brokerages have shared their analysis, with mixed ratings but a generally cautious outlook on the stock's near-term prospects while acknowledging management's upbeat guidance.

Choice Institutional Equities upgraded the stock to ‘Reduce’ from a ‘Sell’ rating, setting a target price of Rs 1,190 per share. The brokerage noted that while Q2 revenues were in line with estimates, the EBIT margin and PAT came in under pressure. The report highlighted that Cyient is navigating a "strategic reset" focused on margin recovery and scaling up its semiconductor and DLM (Design Led Manufacturing) businesses. Despite near-term macroeconomic uncertainty, management remains confident of achieving a 15 per cent EBIT margin by the fourth quarter of FY27. Choice pointed to a sharp 12 per cent QoQ rebound in the semiconductor business and a 130 per cent YoY growth in the DLM order book as positive signs.

Axis Securities maintained its ‘Hold’ recommendation on Cyient with a target price of Rs 1,280. The brokerage described the quarter as having "Degrowth Across All Fronts; Upbeat Outlook". It noted that while revenue was in line with its expectations, EBIT margin and PAT missed estimates. Axis Securities highlighted that management expressed high confidence for the second half of FY26 to be stronger than the first half in both revenue and margins, supported by healthy deal wins. The report also mentioned that the firm is pursuing a "domain-first and Al-infused" strategy and recently secured a major deal to establish an AI Center of Excellence for a healthcare client.