Cyient (Estd: 1991, NSE: CYIENT), a global engineering and technology solutions company, reported its consolidated financial results for the First quarter (Q1) of FY 2021 ending June 30, 2020.
- Consolidated revenue at $130.6 Mn (INR 9,917 Mn); degrowth of 12.5% QoQ (in $ terms) and de-growth of 16.6% YoY (in $ terms) and degrowth of 7.6% QoQ (in INR terms) and de-growth of 8.9% YoY (in INR terms)
- Services revenue at $112.2 Mn; de-growth of 15.2% QoQ (-14.3% in CC) and de-growth of 18.6% YoY
- DLM revenue at $18.4 Mn; growth of 8.5% QoQ, and de-growth of 1.4% YoY
- Free cash flow to EBITDA conversion at 138.1%
- EBIT margin for services at 6.7%, down 283 bps QoQ
- EBIT margin for DLM at -4.6%, down 410 bps QoQ
- Profit After Tax at INR 814 Mn for the quarter; growth of 8.0% QoQ
Commenting on the results, Mr. Krishna Bodanapu, Managing Director and Chief Executive Officer, said “Q1 FY21 results were better than our expectations, where we recorded a revenue of $130.6 Mn which was lower by 11.6% QoQ and 15.1% YoY in constant currency. Services business was lower by 14.3 % QoQ in constant currency. The DLM business grew by 8.5% QoQ. We expect traction from top clients to return post Q2. The EBIT margin is lower by 328bps QoQ mainly due to lower business volume which was somewhat offset by lower SG&A spend. We generated Free Cash Flow of INR 2,163 Mn which was higher by 101% QoQ.”
“This quarter we had some significant wins in both new business and existing clients. This will help us strengthen our revenue outlook in the coming quarters. This quarter we also made significant investments in strengthening our business through strategic partnerships and alliances.
We partnered with Microsoft for industry 4.0 offerings. The partnership will allow us take IoT solutions faster to market with hardware and software that has been pre-tested and verified to work with Microsoft Azure IoT services. We also signed a partnership with Fore Optics for joint Go to Market on taking asset tracking offering to the market. As part of this partnership Fore Optics brings in its IP in supply chain analytics and Cyient its IP in asset tracking IoT. We further strengthened the management team with the addition of Felice Gray-Kemp as the Global General Counsel and Meenu Bagla as the Chief Marketing Officer. The new DLM factory in Hyderabad has been commissioned and I am happy to say that this is one of the most advanced electronics manufacturing facilities in India, underpinned by the latest technologies in factory automation, Industry 4.0 and supply chain management.”
“Our Outlook for Q2 is positive and we expect growth to return in all industries except Aerospace, which will de-grow further in Q2. For the year, we expect a de-growth in revenue in double digits. We will also reiterate that H2 margin will be back to the steady state margin of H1 of last year. This will continue to be underpinned by strong free cash flow generation and prudent Capex spend.”
Commenting on the results, Mr. Ajay Aggarwal, President & CFO, said, “The revenue for Q1FY21 stood at $130.6 Mn (INR 9,917 Mn) with EBIT of INR 511 Mn and PAT of INR 814 Mn. Our rigor on cash collections, close engagement with customers and initiatives on cash conservation has yielded results with FCF generation of INR 2,163 Mn and FCF to EBITDA conversion of 138.1%.”
“With significant efforts spent on efficiencies and cost optimisation in the last financial year, our focus on cost reduction and profit improvement continued in Q1 and well set to show results in the coming quarters. We are positive on realising benefits of our sustained initiatives on collections, working capital cycles, payables and discretionary cost control in FY21.
In the current turbulent times, it is very difficult to predict future with a reasonable certainty. We are cognizant of the dynamic situation we are in, and are working with extreme agility in making decisions and taking corrective actions to manage business scenarios with special focus on cash and costs.
We remain strongly focused on growth, improvement in operating efficiencies and cash generation and thus maximizing the value for our shareholders.”
Financial breakups in INR & US$ separately
|Q1 FY21||Q4 FY20||Q1 FY20|
|Other income $||9.0||2.9||4.1|
|PAT – Normalized||814||754||905|