Stock in Action
Cyient: Cyient is a global engineering and technology solutions company. Cyient’s industry focus includes aerospace and defense, healthcare, telecommunications, rail transportation, semiconductor, geospatial, industrial, and energy. Cyient Strengthens its Digital Solutions Suite, IntelliCyient, through the Acquisition of WorkForce Delta. The acquisition will strengthen Cyient's digital transformation capabilities & offerings in the Utilities and Telecom industries. The management expects overall revenue growth for FY22 to improve in double-digit, with the Communications growth to be led by Network Transformation. The DLM (design led manufacturing) business is expected to grow in the range of 15% to 20% and operating margins to improve by 250bps-300bps. The deal pipeline continues to look healthy at USD 63 million. The company’s outlook remains positive supported by investments in technology-led network transformation and accelerated deployment of broadband and wireless infrastructure. Valuation at P/E multiple of 20X on FY23E EPS, thus looks compelling at current level. Positive on Cyient given compelling valuation and healthy deal pipeline.
FairChem Organics ltd.: Fairchem Organics Ltd. (Fairchem) is engaged in the business of manufacturing of Oleo Chemicals and Nutraceuticals, since the last 25 years. Company’s raw materials are by-products of vegetable oil refineries processing soya, sunflower, rape seed, groundnut, rice bran, corn etc. which are purchased on `as is where is basis’ without any technical specifications. The company is promoted by Fairfax India Holdings and backed by experienced Management team. Its products caters to high growth industries like Paints, Inks, Printing. The plant raw material capacity has been expanded from 45,000 MTPA to 72,000 MTPA in FY21, and is being expanded further to 1,20,000 MTPA by end of FY22. The ongoing capacity expansion to increase capacity by more than 2.5x by end of FY22 with minimal CAPEX. Over the years company has delivered strong Revenue, EBITDA & PAT growth. Positive on FairChem Organics given its strong financial performance, environmental friendly products and strong client base.
Larsen & Toubro: Larsen & Toubro (L&T) construction arm has bagged a significant order from National High Speed Rail Corporation Ltd (NHSRCL). The major scope of work for the project comprises design and construction of civil and building works for a double-line high speed railway of a length of 8.198 km. The project alignment passes through Vadodara, Gujarat and the project is scheduled to be completed within 49 months. Company is already executing two other packages of the high-speed corridor and takes pride in being associated with this prestigious project. Over the years, L&T has significantly enhanced its capability to build faster, and reliable mass transit systems and this project is in line with its strategic goals. Positive for L&T as there is an immense scope of growth in high speed rail segment.