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Cyient Ltd: A Good Operating Performance - Views on News from Equitymaster
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Cyient Ltd: A Good Operating Performance
Oct 13, 2017

Cyient Ltd has announced results for 2QFY18. The company has reported a 6.4% QoQ increase in sales, while the net profit grew 26.9% QoQ. Here is our analysis of the results.

Performance Summary
  • Consolidated net sales increased by 6.4% QoQ in 2QFY18. In constant currency terms, the topline was up 5.1% QoQ. In US$ terms, the topline was up 6.7% QoQ.
  • The operating performance was good. The operating margin came in at 14.5%. The operating profit increased by 23.4% QoQ.
  • The net profit was up by 26.9% QoQ. The net margin improved sequentially to 11.5%.
  • The company has declared an interim dividend of Rs 5 per share. The record date and payment date for the same are 26 October 2017 and 3 November 2017 respectively.

    Consolidated Financials
    (Rs m) 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change
    Sales 9,070 9,654 6.4% 17,485 18,724 7.1%
    Operating expenditure 7,937 8,256 4.0% 15,118 16,193 7.1%
    Operating profit (EBITDA) 1,133 1,398 23.4% 2,367 2,531 6.9%
    Operating profit margin (%) 12.5% 14.5%   13.5% 13.5%  
    Finance costs 44 52 18.2% 104 96 -7.7%
    Other income 371 412 11.1% 304 783 157.6%
    Depreciation 261 259 -0.8% 455 520 14.3%
    Exceptional item 0 0   0 0  
    Profit before tax 1,199 1,499 25.0% 2,112 2,698 27.7%
    Tax 373 421 12.9% 504 794 57.5%
    Associate profit & minority interest 52 36 -30.8% 104 88 -15.4%
    Profit after tax/(loss) 878 1,114 26.9% 1,712 1,992 16.4%
    Net profit margin (%) 9.7% 11.5%   9.8% 10.6%  
    No. of shares (m)         112.6  
    Diluted earnings per share (Rs)*         33.0  
    P/E ratio (x)*         16.3  
    * On a trailing 12-months basis

    Segmental Performance (IT services)
    Verticals 1QFY18 2QFY18 Change
    Aerospace & Defense 2,924 2,997 2.5%
    Transportation 872 967 10.9%
    Semiconductor 374 354 -5.3%
    Medical & Healthcare 158 190 20.4%
    Utilities & Geospatial 1,379 1,373 -0.4%
    Communications 1,894 2,012 6.3%
    Industrial, Energy & Natural resources 706 743 5.2%
    Total IT services revenue 8,307 8,637 4.0%
    Geography      
    Americas 5,387 5,232 -2.9%
    Europe, Middle East, Africa (EMEA) 2,568 2,578 0.4%
    Asia Pacific 1,699 1,844 8.5%

    Segmental Performance (DLM)
    Verticals 1QFY18 2QFY18 Change
    Aerospace & Defense 130 240 85.0%
    Medical 95 95 -0.8%
    Communications 308 467 51.4%
    Industrial 222 211 -5.2%
    Others 8 5 -33.4%
    Total DLM revenue 763 1,017 33.3%
    Geography      
    Americas 139 157 12.8%
    Europe, Middle East, Africa (EMEA) 531 856 61.2%
    Asia Pacific 93 4 -95.6%
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Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

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DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report.
  2. Equitymaster has financial interest in Cyient Limited.
  3. Equitymaster's investment in the subject company is as per the guidelines prescribed by the Board of Directors of the Company. The investment is however made solely for building track record of its services.
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Oct 19, 2017 07:33 PM

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