Cyient said Monday it plans to acquire Finland-based plant and product engineering services firm Citec for 94 million euros, nearly Rs 776 crore, in an all-cash deal. This will be the largest outbound acquisition by an Indian engineering services company and Cyient’s largest acquisition to date, according to a company filing to the stock exchanges. Shares of Cyient fell nearly 3 per cent to Rs 891 a piece in intraday trading. Brokerages are bullish on the Cyient stock so far and see an upside of up to 34 per cent going forward.
“This acquisition will allow us to take our combined Plant Engineering and Digital Solutions portfolio to a new set of customers who have extensive manufacturing facilities globally. Citec’s strong brand value and talent pool, especially in the Nordic region, will be integral to Cyient gaining a strong foothold in the region and accelerating our future growth,” Krishna Bodanapu, Managing Director and CEO of Cyient said in the statement.
Cyient enters Nordic markets
The BSE and NSE listed firm will be able to reach European markets, specifically the Nordic region, where the company did not have a presence so far. Of the $157 million revenue the company reported in Q4, $39 million or about a quarter of the revenue was contributed by the Europe and Middle East region.
The company said the acquisition is expected to be complete in the first half of this year indicatively by 10 May, 2022. Through the deal, the combined portfolios of Cyient and Citec will be one of the largest independent plant engineering capabilities globally. The combined entity will offer services and offerings such as Plant Engineering, Digital Solutions, Product Engineering, Consulting, and Technical Documentation, it added.
Brokerages bullish on Cyient after muted revenue in Q4 earnings
Last week, the engineering services firm reported its quarterly results and recorded a 17 per cent rise in profits for the quarter ended March 2022, however, it reported a soft quarter in terms of revenue, which was down 0.4% quarter-on-quarter. Services segment growth was muted (up 1.6% Q-o-Q), while DLM segment was soft (down 9.3% Q-o-Q).
Brokerage firm Motilal Oswal said it is bullish on the stock and sees a target price of Rs 1000 per unit, a 20 per cent upside. HDFC Securities on the other hand sees a 34 per cent potential rally at Rs 1,120 a piece. ICICI Securities sees a target price of Rs 1025 apiece, which represents an upside of 24 per cent. All three brokerages have a Buy rating for the stock.
from | The Financial Express https://ift.tt/K7pbEtO
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