Cyient Q3 earnings miss street expectations

Hyderabad-based software-enabled Engineering and Geographic Information company Cyient announced its quarterly results on Thursday. Company’s Q3FY16 earnings missed analyst expectations as profits and margin saw a decline.

Sequentially, Cyient’s consolidated total revenue from operations increased by 1 per cent in Q3FY16. Total revenues came in at Rs 781.78 crore compared to Rs 771.64 crore in Q2FY16. Significant pressure was seen on revenues due to reduction in working days across geographies and capacity constraints. Operating profits stood at Rs 109.53 crore in Q3 compared to Rs 117.21 crore in Q2FY16, which is a decline of 7 per cent Q-O-Q (quarter on quarter). Margins saw a de-growth as it dropped by 100 basis points Q-O-Q to 14 per cent from 15 per cent in the previous quarter. Margins declined as the number of pay days in the quarter are same, while the number of working days and hence billing days are lower. Profits after tax for the quarter in review decreased by 12 per cent compared to the same period in the previous quarter. PAT came in at Rs 86.84 crore from Rs 98.52 crore achieved in Q2FY16.

According to company’s filing on BSE, the results for the quarter and nine months ended December 31, 2015; and December 31, 2014 are not stringently comparable as Cyient had acquired 74 per cent stake in Rangsons Electronics in February 2015, whose revenue has been included in the consolidated financials thereafter.

Geographically revenues saw pressure emanating from America, which was down 1.2 per cent Q-O-Q; and Europe, MENA, India saw revenue dip of 2.7 per cent Q-O-Q. However, bucking the trend Asia Pacific revenue was up 10.7 per cent for the quarter.

Total clients added for the quarter were 24. Engineering verticals additions were 10 and 11 from Data Network and Operations. For quarter ended December total employee utilisation was 12186 (in numbers); as against 12,777 in the corresponding quarter of FY15. Voluntary attrition at the company during the October-December quarter of FY16 was 20.6 per cent; as compared with 21.6 per cent in Q2FY16.

Cyient scrip ended the day with more than 4 per cent cut in trade, before closing day at Rs 467.10 reacting to the dull set of numbers.

The promoters holding in the company stood at 22.18 per cent while Institutions and Non-Institutions held 49.78  per cent and 28.04 per cent respectively.