Shares of Cyient Limited plunged 9% in early deals on Friday after the IT-enabled services firm reported its Q1 earnings. The earnings came below estimates on all fronts. The Cyient management lowered its FY25 DET (digital, engineering and technology) revenue growth guidance sharply to flat YoY from high single-digit growth.
In April, the ER&D company said it expects DET revenue to grow in high single digits for FY25.
Cyient stock slipped 9% to Rs 1724 on BSE against the previous close of Rs 1894.35. Market cap of the firm fell to Rs 19,434 crore on BSE.
Cyient shares opened lower at Rs 1800 today. The firm saw 0.58 lakh shares changing hands amounting to a turnover of Rs 10.17 crore on BSE.
In terms of technicals, the relative strength index (RSI) of Cyient stands at 59.3, signaling it's trading neither in the overbought zone nor in the oversold zone.
Cyient shares are trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Net profit fell 23.8% sequentially to Rs 144 crore. On a year-on-year (YoY) basis, the profit for the Hyderabad-based firm declined 18.6%.
Executive vice chairman and MD Krishna Bodanapu said, “Our top customer engagement grew double-digit YoY and our FY24 exit order intake was also double-digit higher YoY. We won five large deals in DET with a total contract potential of $52.4 million in this quarter. With this, we are confident that we have taken steps to align the supply to the demand. We believe this will translate into improved revenue realization and drive a sharp recovery of recovery of growth through the coming quarters.”
Brokerage Nuvama said, "Cyient reported a disappointing Q1FY25. DET revenue declined -5% QoQ/-3.6% YoY in CC terms to USD169.6mn, below our estimate of -1.8% CC QoQ. DET EBIT margin at 13.5% (-250bp QoQ), was significantly lower than our estimate of 15.4%. Cyient also lowered its FY25 revenue growth guidance to flattish YoY from high single digit."
It has maintained its hold call on the stock.
"We remain negative on Cyient, even as inexpensive valuations limit the downside potential. We continue to value the stock using SoTP methodology (exhibit 4) — DET business at 20x FY26E PE and DLM at current market-cap (applying a 20% holdco discount). Retain ‘HOLD/SN’," said Nuvama in in its earnings review.
Cyient is engaged in providing global technology services and solutions specialising in geospatial, engineering design, IT solutions and data analytics.