Share price of Cyient surged over 9 percent on April 21 after the company reported better than expected performance for the quarter ended March 2023.
Consolidated revenue for the quarter grew 8.2 percent quarter-on-quarter (QoQ) and 48 percent year-on-year (YoY) to Rs 1,751 crore while dollar revenue increased 8.1 percent QoQ to $213 million. Constant currency revenue growth stood at 6.6 percent QoQ and 39.1 percent YoY.
On the operating front, EBIT jumped nearly 17 percent QoQ to Rs 249 crore and saw margin expansion of 106 bps at 14.24 percent for the quarter. The engineering and technology solutions company recorded a 4.5 percent sequential growth and 5.5 percent yearly growth in consolidated net profit at Rs 163 crore for Q4FY23 on the back of strong topline and operating numbers.
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Consolidated services revenue stood at Rs 1448.9 crores for the quarter ended March 2023, with QoQ increase of 5 percent and YoY growth of 47.3 percent. The company expects consolidated services revenue growth in the range of 15-20 percent (YoY) on a constant currency basis for FY24 while sees risk in semi-conductors business where slowdown is expected.
“We won five large deals worth over $185 million and saw a 38.4 percent constant currency YoY growth in consolidated services revenue. We also completed three strategic acquisitions to extend our service offerings portfolio and enter newer markets,” said Krishna Bodanapu, Executive Vice Chairman and MD, Cyient. He is confident that the company will achieve a revenue run rate of $1 billion by Q4FY24 and mentions that acquisitions are integrated in business and hence they can’t segregate organic and inorganic growth for FY24.
The company also announced a final dividend of Rs 16 per equity share, on par value of Rs 5 a share, for FY23.
Domestic brokerage firm Motilal Oswal maintained a 'buy' rating on the company at a target price (TP) of Rs 1,360, "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."
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IDBI Capital also has a 'buy' rating on the stock with a TP of Rs 1,265 and believes services revenues will grow at 13.3 percent CAGR over FY23-FY25E led by revival in aerospace vertical.
"The growth is expected to be driven by double digit growth in aerospace, communication, and sustainability segments. In addition, we expect DLM to grow 32 percent and 20 percent in FY24E & FY25E. We expect overall revenue to grow at a CAGR of 15 percent over FY23-FY25E," it added.
At 10.05 a.m., the scrip was trading 6.18 percent higher on the NSE at Rs 1,156.80 with the Nifty IT index trading up 0.18 percent at 26,685.85 points.
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