Cyient stock surges 7% despite tepid Q2FY25 earnings; details here

Cyient share price surged 7 per cent at Rs 1,900 per share on the BSE in Friday's intraday deals despite the company reporting a tepid show in its quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25). 

 

However, analysts said Cyient reported in-line revenue, led by growth in the core verticals and better-than-expected margin performance.

 

“Digital, engineering, and technology (DET) revenue was led by a revival in the aerospace and communications verticals, offset by seasonality in the sustainability vertical in Europe. The management has maintained its guidance for flat YoY CC growth in DET for FY25E, which implies a compound quarter growth rate (CQGR) of more than 4 per cent for 2 half of FY25, said analysts at HDFC Securities.

 

In the second quarter of fiscal 2025, Cyient's DET segment reported revenues of Rs 1,450 crore, marking a quarter-on-quarter growth of 2.5 per cent, but a year-on-year decline of 1.8 per cent. 

 

Analysts further noted that The DET gross margin was up 16 bps despite the wage hike, and the Ebit margin was up 75 bps to 14.2 per cent. Those at HDFC Securities maintained thier ‘Add’ rating with a target price of Rs 1,975.  

 

Technology services firm reported a 2 per cent year-on-year increase in net profit. Group revenue for the quarter reached Rs 1,826.1 crore, reflecting a year-on-year growth of 2.6 per cent in constant currency.

 

The segment's earnings before interest and taxes (Ebit) stood at Rs 206 crore, resulting in a margin of 14.2 per cent. Profit after tax for the quarter was reported at Rs 177 crore, a slight increase of 2.3 per cent from the previous year.

 

“Cyient’s Digital, Engineering, and Technology (DET) business revenue was driven by solid growth in Aerospace, Connectivity, and New Growth Areas. We continue to progressively improve our performance in the subsequent quarters and aim to deliver a strong second half of FY25,” said Karthikeyan Natarajan, Executive Director and Chief Executive Officer of Cyient.

 

The company specialises in providing global technology services and solutions, focusing on geospatial engineering, design, IT solutions, and data analytics. 

 

With headquarters and development facilities in India, the company serves a global customer base through its subsidiaries in the United States, United Kingdom, Germany, Japan, Australia, Singapore, and India.

 

The company has a total market capitalisation of Rs 20,328.42 crore. Its shares are trading at a price to earnings multiple of 43.80  times and at an earning per share of Rs 40.54. 

 

At 11:33 AM, the stock price of the company pared most of its gains and was up 3.17 per cent at Rs 1832.05 per share on the BSE. In comparison, the BSE’s Sensex was down 0.84 per cent to 79,394.15 level.