- 26 Jul 2024
- ICICI Securities
Cyient Ltd.: Weak numbers; misses revenue and margin growth guidance
CYIENT - 1790 Change: -104.30 (-5.51 %)News: Cyient at group level reported revenue of US$ 200.9 mn, down 10.3% QoQ & 2.1% YoY (down 1.5% YoY in CC terms). In DET business reported revenue of US$ 169.6 mn, down 5.4% QoQ/ 4.2% YoY (down 5% QoQ / 3.6% YoY in CC terms). Geography wise Americas (47% of mix) grew by 1.7% QoQ while EMEA (32.8% of mix) & APAC (20.1% of mix) declined by 14.3% & 5.4% respectively. Segment wise in CC terms all business units de-grew with Transportation, Connectivity, Sustainability and New Growth reporting de-growth by 7%, 7.6%, 2.8% and 1.6% respectively. The company in DET business reported EBIT margin of 13.5% (down ~250 bps QoQ) while at Group level EBIT margin came at 11.9% (down 250 bps QoQ). The PAT stood at ₹141 crore with a PAT margin of 10% in DET business. The company in Q1 reported order intake of US$ 182.7 mn, down 19.8% QoQ & 5.4% YoY.
Views: The company failed to achieve its revenue and margin guidance as it faced operational challenges during the quarter and delay in ramp up of deals in the connectivity unit. However, the management expects strong recovery Q2 onwards on the back of a double-digit order book as well as ramp up in delayed deals. Accordingly, it revised its guidance to a flattish YoY growth in CC terms vs high single-digit growth guided earlier for FY25 while on margins front, it now expects to achieve the guided 16% margin for DET business by Q4FY25 only. Considering the soft Q1 and wage hike impact to be absorbed in Q2, we have a cautious outlook for the company.
Impact: Negative