Cyient Ltd Research ReportCo.Update

Organisational restructuring to drive growth… Cyient Ltd (Cyient) reported a decent set of Q3FY21 numbers. The key highlight of the quarter was that the company has made some structural changes to the organisation which will enable the company to accelerate growth and improve profitability. The company has simplified the organisation which will realign its go to market strategy, will focus on large deals, process discipline and incentives to align employees for better sales productivity. We believe this will help improve revenue and margin prospects in longer run and will be key to re-rating of the stock. Traction in large deal and digital to drive growth The company is expecting healthy QoQ growth in Q4FY21E (Q4FY20 revenues in Q4FY21E) mainly led by traction in services and DLM business. We believe this will lead to high single digit (~5.5%) growth in Q4FY21E. The company has also won 5 multi-year deal with total contract potential of US$106 million in the quarter and its order book has increased by 7% YoY which we believe will drive company’s long term revenues. Further, the company has restructured its organisation with an aim to accelerate growth, improve sales, focus on large deals (as won in this quarter), client mining and increase digital & DLM deals. This coupled with bottoming out of Aerospace vertical and traction in communication, mining utility and medical bodes well for long term revenue trajectory for the company.