Cyient (CYIENT)

FairStock Score: 76/100 — STEADY

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 1/1

Key Financials

Strengths

• Low leverage: Debt/Equity of 0.10 and Altman Z-Score of 2.86 indicate financial stability
• Positive free cash flow of ₹656 Cr despite soft earnings
• ROCE of 16.58% shows operational capital efficiency
• Dividend yield of 2.84% provides income support
• Piotroski F-Score of 6/9 suggests moderate financial resilience

Concerns

• Sales and profits are declining: -0.84% and -14.34% respectively; latest quarter net margin is only ~5.2%
• Valuation has no margin of safety: price ₹935.90 is above Graham Number ₹726.77 and DCF value ₹419.06; MOS is -25.86%
• Promoter holding of 23.29% is low for an Indian listed company, raising alignment risk
• Negative EV/EBITDA of -55.76 clouds earnings quality and needs explanation

AI Analysis

Cyient strikes me as a cyclical business going through a soft patch, and my first rule is to never catch a falling knife without a margin of safety. The balance sheet is solid: debt/equity is only 0.10, free cash flow is ₹656 Cr, and ROCE is 16.58%. The Altman Z-score of 2.86 tells me there is no imminent distress, and Piotroski's 6/9 is acceptable. So this is not a financial junk pile. But the economics are mediocre: ROE is 10.24%, sales have fallen 0.84%, and profits are down 14.34%. The latest quarter converted ₹1,849 Cr of revenue into only ₹97 Cr of profit. Where is the moat? I don't see it in these numbers. At ₹935.90, the market cap is ₹10,164 Cr, P/E is 18.19, and P/B is 1.96. Graham taught me to pay a fair price for a wonderful business, but an average business must be bought at a discount. The Graham Number is ₹726.77, the DCF value is ₹419.06, and the stated margin of safety is negative 25.86%. That fails my test. The 2.84% dividend yield provides some comfort, but not enough to justify owning a flat, profit-shrinking company. I also worry about promoter holding of just 23.29%; in India, minority shareholders need strong aligned owners. The negative EV/EBITDA of -55.76 is a red flag I would need explained before trusting the earnings quality. FairStock's 50/100 mixed score matches my hesitation. I will wait for either a stronger growth signal or a lower price — preferably near the Graham value — before acting.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer