Growth in top line mandatory for Cyient re-rating; FY20 outlook key

Management revised services revenue growth guidance to 7.5% for FY19 from 8.5-9.5% earlier

An indication of feeble top line growth for the second consecutive quarter in the March 2019 quarter led to a sharp downtick in Cyient's stock price on Tuesday. With about 11 per cent decline, the stock topped the BSE 500 losers chart even as the Nifty IT index was up 0.9 per cent. A reversal of the top line trend is a must if the stock is to recover from the current levels. This is why the FY20 growth outlook is key, says Harit Shah of Reliance Securities. IDBI Capital too believes that substantial re-rating in the stock would happen