Result Analysis: Cyient Limited Result Update: Q3FY23

Cyient Limited is a leading global engineering, manufacturing, and digital technology solutions company. The company is engaged with customers across their value chain helping to design, build, operate and maintain the products and services offered by the company. Its major business units include Aerospace & Defence, Transportation, Industrial, Energy and natural resources, Semiconductor, Internet of things and Analytics, Medical and Healthcare, Utilities & Geospatial, Communications and Design led manufacturing. It has presence in 19 countries with 15,000+ associates serving to over 300 customers worldwide.


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    Stock Details
    Market Cap. (Cr.) 9370.88
    Face Value 5.00
    Equity (Cr.) 55.26
    52 Wk. high/low 1079 / 724
    BSE Code 532175
    Book Value (Rs) 287.88
    Sector IT – Software


    Key Ratios
    Debt-equity: 0.19
    ROCE (%): 19.43
    ROE (%): 17.2
    EPS: 44.53
    P/BV: 2.9
    P/E: 19.04

    Result Highlights:

    • Group Revenue – Highest ever at INR 1,618 crores with QoQ growth of 15.9% and YoY growth of 36.7%
    • Group CC Revenue Growth at 13.4% QoQ and 28.6% YoY
    • Normalized Group EBIT – Highest ever at INR 208.4 crores with a margin of 12.88%
    • Normalized PAT- Highest ever at INR 162.7 crores, 47.51% QoQ, and 23.54% YoY growth.
    • Order Intake at $ 237 Mn, the highest in the last 15 quarters.
    • Services Order Intake grew by 83% QoQ
    • Offshoring at 46.2%
    • By Geography America contributes 48.1%, Europe, Middle East, Africa contributes 32.8%, and Asia Pacific (including India) contributes 19% of the total Revenue
    • The services revenue was $167.9Mn an increase of 11.9% QoQ and 34.4% YoY in cc, driven by the Semiconductor, Automotive, and Energy and Mining business.
    • Pipeline for the year is higher by 1.5x YoY with large deals accounting for 70% of the pipeline
    • Won 5 large deals in services with total contract potential of ~$59.2 mn
    • Attrition Rate down to 26.5% from 28.4% of last quarter.


        Management Commentary:

    • Commenting on the results, Mr. Krishna Bodanapu, MD and CEO, said, “We continue to witness strong momentum across the business, driven by key wins, robust Order Intake, and We continue to strengthen our technology offerings, focusing on industries like Automotive, Medical, Communications, etc. Cyient has been ranked in the Leadership zone across Aerospace, Telecommunication, Semiconductors, Industrial, and Medical Devices verticals. Our outlook for the year continues to be strong, we expect double-digit growth at the group level driven by strong OI, a large deals pipeline, and growth in key accounts

    • Commenting on the results, Mr. Ajay Aggarwal, ED & CFO, said, “With a strong foundation on sustainable initiatives, we remain confident of this momentum continuing in Q4 FY23. We remain strongly focused on growth, margin and cash generation and exiting FY23 on a very strong note”.


    Shareholding Pattern:

    Shareholding Pattern  
    Promoters & Promoter Group 23.37%
    FIIs 32.62%
    DIIs 23.69%
    Public 19.35%
    Others 0.98%


    Cyient Limited has shown robust performance in the latest quarter, and is expecting Q4 organic revenue in cc to be higher than Q3 driven by growth in Aerospace, Mining, and Communications & Automotive, the company will add 14-15% in FY23 revenue due to acquisitions in cc which was upgraded from last quarter’s expectations of 13-15%, FY23 normalized EBIT margins are expected to be in the range of 13-14%, FY23 normalized EBITDA margins are expected to be in the range of 16-17% for the group, Q4 normalized EPS is expected to be in the range of ₹15-16 , in FY24, the company has a visibility to project $1 Bn revenue run rate, and the FY24 EPS is expected to be atleast ₹60.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22      QoQ %          YoY%
    Revenue from Operations 1,618.20 1,396.20 1,183.40 15.90% 36.74%
    Other Income 27.50 19.7 22.1 39.59% 24.43%
    Total Income 1,645.70 1,415.90 1,205.50 16.23% 36.52%
    Employee Benefit Expenses 825.10 563.2 454.1 46.50% 81.70%
    Employee benefit Expenses as % of Sales 50.99% 40.34% 38.37% 26.40% 32.88%
    EBIT 208.40 166.1 164.2 25.47% 26.92%
    EBIT Margin (%) 12.88% 11.90% 13.88% 8.25% -7.18%
    Profit After Tax 162.70 110.3 131.7 47.51% 23.54%
    PATM (%) 10.05% 7.90% 11.13% 27.27% -9.66%
    EPS (in Rs.) 14.9 10.1 12.1 47.52% 23.14%
    Segment Revenue (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22      QoQ %          YoY%
    Services 1,379.80 1,206.80 967.40 14.34% 42.63%
    Design Led Manufacturing (OLM) 238.40 189.60 216.10 25.74% 10.32%
    Geography Revenue % Q3FY23 Q2FY23 Q3FY22
    America 48.10% 50.70% 54.20%
    Europe, Middle East & Africa 32.80% 28.00% 28.10%
    Asia Pacific (Including India) 19.00% 21.30% 17.80%
    Source: Company website, EWL Research

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