Cyient Earnings Drop: The Company Appoints Interim CEO Amid Declining Margins and Lowered Sales Outlook

Cyient Earnings Drop: Interim CEO Faces Pressures of Revised Guidance

Following a 32% decline in the December quarter earnings, IT company Cyient Ltd. released its margin guidance and once again lowered its FY25 sales growth guidance to negative 2.7% compared to flat before. In addition, promoter Krishna Bodanapu has been appointed temporary CEO in lieu of the company’s departing CEO, Karthikeyan Natarajan. As a result of the changes, analysts have lowered their target prices and earnings projections for Cyient. The Cyient management had initially projected a high single-digit sales growth for FY25, but this has since been regularly lowered to a current drop of minus 2.7%.

The weak exit rate also impacts growth prospects for FY26. We remain negative on Cyient even as inexpensive valuations limit the downside potential,

Nuvama

Due to decreased growth and margins, this brokerage drastically lowered its FY25 and FY26 EPS projections by 10.8% and 4.5%, respectively. It recommended changing the target price from Rs 1,700 to Rs 1,660.

Cyient Stock Drops 17% Despite 4.2% YoY Revenue Growth in December Quarter

During Friday’s trading, the stock fell 17% to a low of Rs 1,440 on the BSE. Consolidated revenue for Cyient increased 3.3% QoQ and 4.2% YoY during the quarter, whereas DET revenue increased 2.4% CC QoQ (down 1.9% CC YoY).

Strong execution and a ramp-up in North America propelled Connectivity’s growth among verticals, which increased 5.7% CC QoQ. Rail transportation was stable, but transportation rose 3.7% CC QoQ, driven by aerospace deal ramp-ups and strong demand from current customers.

NGA grew 2.1 per cent CC QoQ while Sustainability declined 1.3 per cent CC QoQ, due to continued challenges. Order intake came in strong at $312 million, up 99 per cent QoQ/up 5 per cent YoY. Large deals’ TCV at $234.5 million comprises 13 large deals. The management is winning deals in the areas of emerging technologies, and expects this momentum to continue,

Nuvama

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