Cyient (532175) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 was weaker than expected due to operational challenges, project delays, and sectoral headwinds, particularly in the DET segment, but management expects a robust recovery from Q2 onward, supported by a strong order backlog and new client additions.

• Group revenue for Q1 FY25 was $200.9M (₹16,757 million), down 1.5% YoY in constant currency, with DET revenue at $169.6M (₹14,144 million), down 5% QoQ and 3.6% YoY in constant currency.

• DET EBIT margin declined to 13.5%, down 256 bps QoQ and 260 bps YoY, attributed to revenue movement and investments in sales and technology.

• Five large DET deals were won, totaling $52.4M in contract value.

• A new wholly owned subsidiary was established to focus on turnkey ASIC design and chip sales, aiming to capitalize on growth in the semiconductor sector.

Financial highlights

• Group revenue: $200.9M (₹16,757 million), down 1.5% YoY in constant currency; DET revenue: $169.6M (₹14,144 million), down 5% QoQ and 3.6% YoY in constant currency.

• Group PAT: INR 1,439 million (₹144 Cr), down 18.6% YoY; DET PAT: INR 141 Cr; Basic EPS: INR 13.09, down 18.8% YoY.

• Group FCF: INR -15 crore, impacted by DLM business cash cycle; DET FCF: INR 164 crore, down 30% QoQ.

• Group EBIT margin: 11.9% (-281 bps YoY); DET EBIT margin: 13.5% (-256 bps QoQ, -260 bps YoY).

• Basic EPS (Group): INR 13.09; Paid-up equity share capital: ₹1,465 million as of June 30, 2024.

Outlook and guidance

• FY25 revenue guidance revised to flattish YoY in constant currency, with recovery expected from Q2 and stronger H2 performance.

• EBIT margin is expected to recover to previous year’s level (16%) by Q4 FY25, driven by revenue growth.

• Management has incorporated learnings from Q1 into new guidance, applying more conservative forecasting and risk adjustments.

• Medium-term outlook remains positive, with double-digit order book growth and strong performance from top customers.