The global brokerage said DET (Digital, Engineering, and Technology) revenues grew 1.6 per cent quarter-on-quarter (QoQ) in constant currency (CC) terms (7.5 per cent overall) and came 110 basis points (bps) ahead of its estimates. Order intake was up 21 per cent year-on-year (YoY), while EBIT margins expanded 110 bps QoQ to 14.2 per cent, the highest in 10 quarters.
It expects growth to be organic broad-based across the company's three verticals, with transportation growth momentum continuing, networks infrastructure rebounding as headwinds from some project completions are behind, and strategic units returning to growth.
JP Morgan said Cyient has won a 50 million euro framework deal with a consumer products client that is not part of order intake. The deal will ramp up from the third quarter (Q3 FY27) and fully ramp up over the next one to two years.
The brokerage said Cyient is making progress towards an annuity-based portfolio to drive more predictable revenues. The company's long-term target is to have a 70:30 mix in favour of annuity-based deals, compared with the current 50:50 mix.
On margins, JP Morgan said wage hikes over the third and fourth quarters would be offset by cost efficiencies and operating leverage, helping margins remain at Q2 FY27 levels.
The brokerage raised its target price-to-earnings (P/E) multiple to 15x from 14x, rolled forward its valuation to December 2027 and retained its 'Overweight' rating with a revised target price of Rs 1,300 from Rs 1,150 earlier.
Separately, Axis Securities raised its target price on Cyient to Rs 1,240 per share from Rs 900 earlier, while maintaining its 'HOLD' rating. The domestic brokerage said management has indicated growing confidence towards returning to a phase of stable, consistent growth.
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