Shares of Cyient jumped 9 per cent in Friday's trade on robust FY24 guidance. The IT firm clocked a 5.83 per cent year-on-year (YoY) rise in net profit at Rs 163.20 crore for the March quarter compared with Rs 154.20 crore in the same quarter last year. Excluding an one-off expenses, normalised profit was up 8.2 per cent YoY at Rs 176 crore, Cyient said.
Revenue for the quarter came in at Rs 1,751.40 crore, the IT firm said. This is against Rs 1,181.20 crore sales it recorded in the corresponding quarter last year. Cyient expects FY24 consolidated Services revenue growth to be in the range of 15-20 per cent YoY in constant currency (CC) terms. It sees FY24 consolidated services normalised EBIT margin to improve 100-200 basis points on YoY basis. Analysts said there was a significant beat in terms of revenue and margins.
Nuvama Institutional Equities said margins (adjusted for legal expense) at 14.2 per cent were ahead of its estimates – driven by operating leverage and better pricing.
"Order intake came in strong at $212.7 million (up 13.3 per cent YoY). Management guided to 15–20 per cent CC YoY growth in FY24 in Services business – solid guidance – though boosted by acquisitions (7 per cent contribution by our estimates). It does not see any big impact of cut in discretionary spend due to weak macro – though clients in a few pockets might pause spends partly. The management also expects Services margins to expand 100–200bp YoY – a tall order, in our opinion," Nuvama said.
Following the development, the stock rose 9.40 per cent to Rs 1,194.10.
"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," said Motilal Oswal Securities.
This brokerage sees the stock at Rs 1,360. Nuvama has upped its target on the stock to Rs 1,150 from 930 earlier.
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