Cyient reports decline in Q1 FY25 revenue but optimistic outlook on pipeline

Cyient, a prominent player in the Intelligent Engineering solutions sector, has released its financial results for the first quarter ending June 30, 2024. The results reveal a mixed performance, with some declines in revenue but a robust pipeline that could signal a turnaround.

Cyient Financial Highlights for Q1 FY25

For the first quarter of FY25, Cyient’s Digital, Engineering, and Technology (DET) division reported revenues of INR 1414 crores. This marks a 5% decline quarter-on-quarter (QoQ) and a 2.8% decrease year-on-year (YoY). Cyient DET’s constant currency revenue also showed a decrease of 5% QoQ and 3.6% YoY. The EBIT for the DET segment was INR 190 crores, yielding a margin of 13.5%, while the Profit After Tax (PAT) stood at INR 141 crores, reflecting a 17% decrease YoY.

Challenges and Future Outlook

Krishna Bodanapu, Executive Vice Chairman and Managing Director of Cyient, noted that the company experienced a soft start to FY25. The group’s quarterly revenue was reported at $200.9 million, showing a 1.5% decrease YoY in constant currency terms. The DET business delivered a revenue of $169.6 million, with a 5.0% QoQ decline and a 3.6% YoY decrease in constant currency.

Despite the current downturn, Cyient remains optimistic about its prospects. Bodanapu highlighted that the top customer engagements and the FY24 exit order intake grew by double digits YoY. The company secured five large deals within the DET segment, with a total contract value of $52.4 million this quarter. This optimism is supported by the belief that alignment of supply and demand will lead to improved revenue realization and a sharp recovery in growth in the coming quarters.

Strategic Developments and Innovations

Cyient’s announcement of its new semiconductor subsidiary represents a significant advancement in the company’s innovation strategy. The subsidiary’s focus on turnkey ASIC design and chip sales positions Cyient to seize opportunities within the global semiconductor market. The company is also committed to advancing its intelligent engineering solutions to address key megatrends and drive future growth.

Karthikeyan Natarajan, Executive Director and Chief Executive Officer of Cyient, reported securing five major deals in the areas of Connectivity, Aerospace, and Sustainability. Despite a challenging Q1, Natarajan expressed confidence in achieving mid-to-long-term growth through a balanced portfolio and investments in technology. He thanked Cyient’s associates for their dedication and the customers for their continued trust.

Recognition and Awards

During the quarter, Cyient received the Premier Award from customer RTX for the third consecutive year, recognising its performance in cost competitiveness, collaboration, and customer service. Additionally, Cyient was named a leader by ISG for the second consecutive year in Digital Engineering for Design and Development, Platform and Application Services, and Intelligent Operations in North America and EMEA.

Company Overview

Established in 1991 and listed on NSE under the ticker CYIENT, Cyient delivers Intelligent Engineering solutions for a digital, autonomous, and sustainable future. The company serves over 300 global customers, including 40% of the top 100 global innovators. Cyient remains dedicated to fostering a culturally inclusive, socially responsible, and environmentally sustainable future in collaboration with its stakeholders.