IT stock engaged in the business of providing global technology services and Solutions slumped 8 percent in the day’s trade upon posting weak Q1FY25 results and expecting flat revenue growth from a segment.
Price Action
With a market capitalization of Rs. 19,289 Crores, the shares of Cyient Limited were trading at Rs. 1,739 per equity share, down 8.2 percent from its previous day’s close price of Rs. 1,894.
About the Company
Cyient Limited is engaged in the business of providing global technology services and solutions, specializing in geospatial, information technology solutions, engineering design, data analytics, and many more.
Q1Y25 Results
Its revenue from operations declined by 0.64 percent YoY from Rs. 1686.5 Crores in Q1FY24 to Rs. 1675.7 Crores in Q1FY25 and it declined by 9.94 percent QoQ from Rs. 1,860.8 Crores in Q4FY24 to Rs. 1,675.7 Crores in Q1FY25.
Its Net Profit declined by 13 percent YoY from Rs. 169.1 Crores in Q1FY24 to Rs. 147.6 Crores in Q1FY25 and it declined by 25 percent QoQ from Rs. 196.9 Crores in Q4FY24 to Rs. 147.6 Crores in Q1FY25.
The EBIT margin for Q1 FY25 is 13.5 percent, down by 256 bps compared to previous quarter, driven largely by absorption impact from QoQ revenue movement and our investments in sales and technology
In addition Cyient Limited announced that it has established a fully-owned subsidiary for the strategic expansion of its Semiconductor business, thereby Strengthening its decades of Turnkey Application Specific Integrated Circuits (ASIC) expertise by delivering world-class specialized turnkey ASIC design and chip.
Brokerage Outlook
As per sources 17 out of the 22 analysts tracking the company have a ‘buy’ rating on the stock, three recommend a ‘hold’ and two suggest a ‘sell’,
As per sources Kotak Institutional Equities said that the lowered revenue guidance from Cyient is also aggressive. The brokerage has cut its earnings estimate by 14 percent to 18 percent over the financial year 2025 – 2027 and has cut the target to Rs. 2,275 from Rs. 2,050.
Management Message and Guidance
“We had a challenging Q1, however, we remain confident that with our balanced portfolio and investment in technology solutions, we will achieve growth in the mid-to-long term to deliver value to stakeholders,” said Karthikeyan Natarajan, executive director and chief executive officer, of Cyient.
The management also said that it is eyeing flattish DET revenue growth for FY25 in constant currency terms due to the Q1 FY25 impact. However, the management was optimistic on the turnaround in the second half of the current fiscal.
Our top customer engagement grew double-digit YoY and our FY24 exit order intake was also double-digit higher YoY. We won 5 large deals in DET with a total contract potential of $52.4 Mn in this quarter.
With this, we are confident that we have taken steps to align the supply to the demand. We believe this will translate into improved revenue realization and drive a sharp recovery of growth through the coming quarters.
Written by: Bharath K.S
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