Cyient (532175) Q4 97/98 earnings summary

Executive summary

• FY1997-98 total income rose 38% to Rs. 1,005.45 lakh and profit after tax increased 17% to Rs. 252.84 lakh.

• Results fell short of public-issue projections: income Rs. 1,005.45 lakh vs Rs. 1,532 lakh, profit Rs. 252.84 lakh vs Rs. 372 lakh, and EPS Rs. 4.70 vs Rs. 6.76.

• Growth broadened into Business Software and Net Services alongside Conversion Services and Technical Software; long-term orders and diversification underpin the growth plan.

Financial highlights

• Total income was Rs. 1,005.45 lakh vs Rs. 728.48 lakh; sales were Rs. 913.74 lakh vs Rs. 710.43 lakh.

• Operating profit before prior-year adjustment was Rs. 269.01 lakh vs Rs. 243.36 lakh; PBT was Rs. 258.73 lakh vs Rs. 244.96 lakh.

• PAT was Rs. 252.84 lakh vs Rs. 219.96 lakh; tax provision fell to Rs. 5.89 lakh from Rs. 25 lakh.

• Recommended tax-free dividend was 16% vs 15%; proposed dividend Rs. 86.10 lakh, with dividend tax provision of Rs. 8.61 lakh.

Outlook and guidance

• FY1998-99 income and profitability were expected to meet projections, supported by Rs. 3,200 lakh of orders on hand for execution over three years.

• More than Rs. 3,000 lakh in CAD/GIS contracts were secured for execution over three years; management expected large contracts to drive a recovery from the prior-year shortfall.

• Management expected the in-car navigation product contract to improve profitability in coming years, as products offer higher leverage than project work.