Shares of Cyient Ltd. experienced a significant rally on Friday, October 23, 2026, climbing 10.79 percent to reach a one-year high of Rs 1,268. This surge occurred despite a generally weak performance across domestic benchmark indices, highlighting strong investor confidence in the IT services firm.
Brokerages Reaffirm Positive Outlooks
Leading global brokerage JP Morgan maintained its 'Overweight' rating on Cyient, citing an exceptional second-quarter (Q2 FY27) performance. The report noted substantial beats on both revenue and margin expectations, propelling the stock's upward trajectory.
JP Morgan raised its target price for Cyient to Rs 1,300, up from an earlier Rs 1,150, and adjusted its price-to-earnings (P/E) multiple to 15x from 14x, rolling forward its valuation to December 2027.
Strong Q2 FY27 Performance Drives Optimism
According to JP Morgan, Cyient's Digital, Engineering, and Technology (DET) revenues grew by 1.6 percent quarter-on-quarter (QoQ) in constant currency terms, or 7.5 percent overall, exceeding its estimates by 110 basis points. The company also reported a robust 21 percent year-on-year (YoY) increase in order intake.
EBIT margins expanded impressively by 110 basis points QoQ, reaching 14.2 percent—the highest in ten quarters. The brokerage anticipates continued organic, broad-based growth across Cyient’s three key verticals: transportation, network infrastructure (rebounding from prior headwinds), and strategic business units.
Strategic Deals and Annuity-Based Portfolio
Further bolstering its positive view, JP Morgan highlighted Cyient's recent win of a 50 million euro framework deal with a consumer products client. This significant contract, not yet part of the reported order intake, is expected to ramp up from Q3 FY27 and fully integrate over the next one to two years.
Cyient is also making steady progress toward building a more predictable, annuity-based revenue portfolio. The company aims for a long-term mix of 70:30 in favor of annuity-based deals, a notable shift from its current 50:50 split. Looking ahead, JP Morgan projects that wage hikes in Q3 and Q4 FY27 will be effectively offset by cost efficiencies and operating leverage, ensuring margins remain consistent with Q2 FY27 levels.
Axis Securities Updates Target Price
Separately, domestic brokerage Axis Securities also revised its target price for Cyient, increasing it to Rs 1,240 per share from Rs 900 previously. While maintaining a 'HOLD' rating, Axis Securities noted management's growing confidence in achieving a phase of stable and consistent growth, reinforcing the overall positive sentiment surrounding the company.