Cyient (532175) Q4 06/07 earnings summary

Executive summary

• FY07 operating revenue reached Rs.5,425.4m ($120m), up 49.7% YoY; consolidated net profit after associate earnings rose 66.3% to Rs.836.6m.

• Growth came from global demand for engineering design and geospatial services, supported by 31 new clients, new service offerings and expanded delivery locations.

• Strategic priorities include developing higher-value services, entering IT services and targeting $250m revenue by end-March 2009.

Financial highlights

• Consolidated operating revenue was Rs.5,425.4m, up 49.7%; total income was Rs.5,492.6m versus Rs.3,658.5m in FY06.

• Consolidated net profit before associate earnings was Rs.744.1m; including Rs.92.5m share of associate profit, net profit was Rs.836.6m, up 66.3%.

• Consolidated EPS was Rs.18.24 basic and Rs.17.82 diluted, versus Rs.11.11 and Rs.10.87 in FY06.

• Standalone operating revenue rose 61.27% to Rs.3,446.1m; PAT rose 129.23% to Rs.650.5m, with EPS of Rs.14.18 basic and Rs.13.85 diluted.

• Standalone other income included Rs.50.6m of subsidiary dividends and Rs.22.1m net foreign-exchange gains, versus a Rs.95.4m FX loss in FY06.

Outlook and guidance

• Management targeted $250m revenue by end-March 2009, with EMI expected to be the main growth driver in FY08.

• Planned focus includes deepening aerospace, rail and industrial expertise, broadening EDS and GIS offerings, and entering IT services as a total-solutions provider.

• Management cited market estimates of $35–40bn for engineering design services and $10bn for GIS; these were forward-looking market estimates, not company guidance.