Home News Cyient reports PAT at ₹ 1083 Mn for the Third Quarter FY...

Cyient reports PAT at ₹ 1083 Mn for the Third Quarter FY 20

India: Cyient (Estd: 1991, NSE: CYIENT), a global provider of engineering, manufacturing, geospatial, network, digital and operations management solutions to global industry leaders, today  reported its consolidated financial results for the Third quarter (Q3) of FY 2020 ending December 31, 2019.

Financial Highlights

  • Consolidated revenue at ₹11,060Mn; De-growth of 4.6% QoQ (₹ terms) and de-growth of 6.9% YoY (₹ terms); $ 155.2Mn; De-growth of 5.5% QoQ ($ terms) and de-growth of 6% YoY ($ terms)
  • Profit After Tax at ₹1,083 Mn for the quarter; growth of 10% QoQ and growth of 17.6%YoY
  • Services revenue at $140.1 Mn; De-growth of 0.2% QoQ (0.5% in CC) and de-growth of 3.1% YoY
  • DLM revenue at $15.1 Mn; De-growth of 36.5% QoQ, 26.7% YoY
  • Cash flow to EBITDA conversion at 96%
  • Normalised EBIT* excluding one-offs and long-term investments at ₹1,361Mn
  • EBIT margin excluding one-offs and long-term investments at 12.3%; flat QoQ
  • EBIT margin for services excluding one-offs and long-term investments at 13.6%, lower by 72bps QoQ

Business Highlights

  • Actively involved in accelerating the deployment of 5G network for a key client in Australia
  • Signed an agreement with key client in transportation which extends the commercial framework till 2023, reconfirms Cyient’s position as a preferred partner for a major program planned in 2020
  • Partnered with Clear Horizon to capture and maintain quality mobile network asset data for utilities
  • AnSem joins Arm – Approved Design Partner program. Reinforces AnSem’s expertise in delivering Arm-based Custom Turnkey ASIC solutions and services which will ensure faster time to market for customers
  • Set up a new development center in Warangal to support telecom customers globally with plan & design and engineering services for their mobile and fixed-line networks

Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said, “Q3 is generally a slow quarter and we recorded a revenue decline of 5.7% in constant currency QoQ and 5.3% YoY. The services revenue declined by 0.2% QoQ in USD is predominantly driven by a decline across Transportation and A&D business units. The decline in services business was majorly driven by a long-term risk-sharing agreement we signed with one of our key clients. As part of this agreement, we have provided a one-time discount in Q3. This agreement will accelerate our growth in the coming years and since the cumulative impact was taken in Q3 it has resulted in degrowth.

Due to seasonality in the business, DLM BU witnessed a decline of 36.5% QoQ. EBIT was lower QoQ by 4.2% mainly due to volume drop in A&D and Transportation. PAT increased QoQ by 10% ($15.2 Mn) primarily driven by higher other income despite ETR increase. We continue to make investments in our S3 strategy and are focused on building our capabilities across the product value chain. Our digital suite of solutions is also gaining traction, we are witnessing an increased interest from clients across industries. We will continue to invest in building a strong digital portfolio as part of our strategy.

We expect a strong growth through Q4 driven by growth in E&U, Transportation and Semiconductor, IoT and Analytics BU’s. For FY20, we expect a slight de-growth driven by decline in key clients across Communications and Aerospace BU’s.”

Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “In the last 3 quarters, there has been significant focus on efficiencies and cost optimization program. Due to the program and this focus, our cost and profit position is well set for the coming year. The current quarter and the year also had costs associated with the program.

This despite drop in volume and lower billing days vs. paydays, our EBIT margins stayed flat at 9.6% QoQ (12.3% without one-offs and long term investments). We also posted a double-digit growth in net profit of 10% QoQ. The net profit for the quarter stood at Rs.1,083 Mn.

We had good collections in Q3, which resulted in EBITDA to FCF conversion of 96% and YTD 52%. This culminated in a cash balance of Rs.10,239 Mn for the quarter-end. We generated FCF of INR 1,944 Mn for the quarter.

We are confident of exiting the year with a strong performance in Q4 FY20, which will then provide a solid platform for FY21. We will continue our focus on Growth, Margin expansion and Cash Generation to maximise value for our shareholders.”

Business performance and outlook

Aerospace & Defense

Aerospace & Defense BU witnessed a decline of 17.6% QoQ & 15.4% YoY driven by continued uncertainty and weak customer spend resulting in de-growth in key client accounts. The growth momentum is expected to return over the coming quarter led by key clients in North America. We expect a de-growth through the year due to the global industry challenges and challenges in two of our key customers. We continue to see growth in our DLM business with significant order wins across both North American and Europe.TheServicesbusinessisseeingashiftincustomerspendingtowardsmoreDigitalservices.


Communications BU witnessed a growth of 12.1% QoQ and 0.4% YoY driven by growth in key accounts, momentum across geographies and new project wins. This is the second quarter of sequential growth through the BU. We expect the growth momentum to continue through the year, driven by growth in focus segments, healthy pipeline and momentum in strategy execution.


Transportation BU witnessed decline of 13.9% QoQ and 9.5% YoY driven by cyclicality in rolling stock projects and right shifting of key projects. The de-growth in Q3 was higher than expected due to a one-off event with a key client wherein we have entered into a long-term risk sharing agreement. As part of this agreement, we have provided a one-time discount in Q3. This agreement has a potential to accelerate our growth in the coming years and since the cumulative impact was taken in Q3 it has resulted in a de-growth. We have also renewed the agreement with this key client until end of 2023, which provides us with a strong visibility for future. We expect normal run rate and growth in Q4 basis our continued strong engagements with key clients and project visibility especially in the Rolling Stock segment


The Energy and Utilities BU witnessed a strong growth of 7.0% QoQ and6.4%YoY driven by growth in the services business esp. across utilities clients. We expect the growth momentum to continue through the year, with double digit growth expected driven by the positive momentum in the services business and new client wins in the utilities segment. Also, the pipeline for digital projects continues to grow especially in the mining sector.


Medical Technology and Healthcare BU witnessed a growth of 7.1% QoQ and 23.2% YoY driven by growth across manufacturing business while services business witnessed a moderate growth driven by key customers. The outlook for the year continues to be strong with double digit growth expected through the year, driven by strong growth in manufacturing business and top customer growth in services business


Semiconductor, IoT and Analytics BU witnessed a growth of 0.2% QoQ and 2.3% YoY driven by growth in our turnkey business. However, our performance through the quarter was impacted by softness in the industry and client ramp downs. We expect de-growth through the year driven by de-growth in our semiconductor services business.


The Portfolio BU witnessed a decline of 4.4% QoQ and 8.7% YoY driven by de-growth in the industrial and geospatial segments. Business seasonality and delay in ramp up in key client accounts impacted growth in geospatial segment while Industrial witnessed a de-growth across key client accounts. We expect decline in growth through the year impacted by sluggish industry outlook and decline in key clients.

Awards and Recognition

  • Cyient Foundation received a ‘Platinum Award’ under Apex India CSR Excellence Award 2019 in the Engineering and IT Services Sector
  • Cyient won the coveted ‘Exemplar of Inclusion’ award as part of the Most Inclusive Companies Index 2019 in India
  • Cyient recognized as one of the Best Companies for Women in India by Working Mother Media and AVTAR Group
  • Cyient highly commended at the European Diversity Awards 2019

CSR Activities

  • Continue to support 25 Government Schools – providing education to 18,500+ under privileged children
  • Continue to support more than 70 Cyient Digital Centres (CDCs) in and around Hyderabad which cater to more than 25,000 childrenand15,000 community members
  • Completed training to the third pilot batch of 300 community unemployed women on tailoring, bakery and beauty courses through the Cyient Urban Micro Skill Center(CUMSC) for urban poor
  • Cyient trained and certified 403 unemployed people under the Cyient IT/ITES Skill Centre andsuccessfullycompleted11batches

TCarta Marine, a global provider of marine geospatial products, is commercializing a new technique to derive highly accurate shallow-water bathymetry measurements from NASA’s ICESat-2 satellite data. The new methodology is being developed by TCarta with funding from the National Science Foundation (NSF).

In 2018, NSF awarded TCarta a Phase 1 Small Business Innovation Research (SBIR) grant to commercialize new satellite-derived bathymetric (SDB) measurement technologies. Referred to as Project Trident, the research focused on leveraging Artificial Intelligence (AI) – machine learning and computer vision – to determine shallow-water seafloor depth in variable water conditions.

“As participants in NASA’s Applied Users Program, we incorporated laser data from ICESat-2 as a validation tool for the enhanced SDB technologies under development,” said TCarta President Kyle Goodrich. “The results were so impressive we plan to introduce a stand-alone ICESat-2 bathymetric data extraction tool as one of several commercial products from our NSF work.”

NSF awarded TCarta a $750,000 Phase 2 grant in late 2019 to continue Project Trident for an additional two years. Phase 2 will incorporate the new ICESat-2 research into the project’s original objective of enhancing existing SDB technologies with AI capabilities to measure seafloor depths in diverse water conditions.

“The breakthroughs we made with NSF funding will enable us to apply SDB technology in geographic areas and water conditions not previously possible,” said Goodrich. “The results will have commercial impacts on marine operations related to oil & gas exploration and production, coastal infrastructure engineering, environmental monitoring, and geospatial intelligence (GEOINT) activities.”

TCarta pioneered the application of high-resolution optical satellite imagery for seafloor depth measurement in 2014 with commercialization of a proprietary technique. This SDB technology, however, was limited to the relatively calm and clear waters of shallow coastal areas. In 2018, TCarta teamed with jOmegak of San Carlos, Calif., and DigitalGlobe of Maxar Technologies (DigitalGlobe) of Westminster, Colo., on Project Trident.

The Project Trident team added ICESat-2 space-based laser data to the project shortly after the small satellite’s launch in 2018. Developed by NASA and the University of Texas, ICESat-2 (Ice, Cloud & land Elevation Satellite) was designed primarily for polar ice elevation and tree canopy measurements, but the green laser altimeter onboard has proved remarkably accurate at gauging seafloor depths down to 100 feet below the surface.

TCarta is developing a software tool incorporating AI algorithms to automatically extract bathymetric measurements from ICESat-2 data sets. This tool will soon be available for beta testing.