Cyient surges 9%, hits 52-week high on strong Q4 results

Overall, from a macro standpoint, the business outlook remained strong with no material impact on the BUs, except for few sub-segments, analysts said.

Shares of Cyient hit a 52-week high of Rs 1,194.10, as they rallied 9 per cent on the BSE in Friday’s intra-day trade on the back of heavy volumes after the IT firm reported a strong 48.3 per cent year-on-year (YoY) jump in consolidated revenue to Rs 1,751 crore in March quarter (Q4FY23), aided by a strong services deal pipeline.

At 09:43 AM the stock quoted 6 per cent higher at Rs 1,158, as compared to 0.03 per cent rise in the S&P BSE Sensex. It was trading at its highest level since October 2021. The average trading volumes at the counter jumped over three-fold today. A combined 2 million equity shares changed on the NSE and BSE.

During the quarter under review, Cyient won five large deals worth over $185 million and saw a 38.4 per cent constant currency (CC) YoY growth. Cyient reported revenue of $213 million at group level, up 8.1 per cent quarter-on-quarter (QoQ) while in CC terms it grew by 6.6 per cent.

Normalised core services earnings before interest and tax (EBIT) margin exclusive exceptional items & acquisition impact improved by ~100 bps QoQ to 16.1 per cent due to the tailwinds of improved realizations +130 bps, cost efficiency due to increase in volume +90 bps, favourable revenue mix +40 bps & currency benefits +30 bps mitigated by the tailwinds of increase in SG&A expenses -100 bps & decline in utilisation -90 bps.

On EBIT margin, the management has guided for a 100-200 bps YoY gain for the consolidated service business for FY24 v/s 13.7 per cent in FY23. Margin would be supported by strong cost control, ability to draw price hikes, improved offshoring, and focus on fixed-price projects, Motilal Oswal Financial Services said.

Overall, from a macro standpoint, the business outlook remained strong with no material impact on the BUs, except for few sub-segments. All growth engines are firing well for the company. Aerospace, Communication, Mining and Auto are expected to deliver double-digit growth, while other segments are on the verge of recovery and should incrementally contribute to its overall growth in FY24E, the brokerage firm said in its result update.

“Cyient is guiding for 15-20 per cent revenue growth in FY24 led by increased traction in aerospace vertical wherein it expects double digit growth due to increase in air travel & opening up of China economy. The company indicated that it has given wide revenue guidance due to the uncertain macro environment but we expect the company to narrow the gap as the year progresses. The company has also received approval from SEBI for IPO of the DLM business which will further be accretive for the margins at the group level,” ICICI Securities said in a note.