BackCyient profit increases 34% to Rs93.8 crore
Revenue during the quarter increased 22.7% to `730 crore
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Hyderabad: Quarterly net profit of engineering services provider Cyient Ltd rose 34.4% from a year ago to ₹ 93.8 crore, partly aided by income of ₹ 39.8 crore it earned from avenues other than its main business.
The company, formerly known as Infotech Enterprises Ltd, had a foreign exchange gain of ₹ 19.8 crore during the quarter to 31 March.
Revenue during the quarter increased 22.7% to ₹ 730 crore, helped by a ₹ 57.18 crore contribution from Rangsons Electronics Pvt. Ltd, in which Cyient bought a 74% stake in January.
The deal was concluded in February and Cyient included income from the Mysuru-based electronics system design and manufacturing services company for February and March.
However, lower margins of Rangsons dragged down Cyient’s operating profit. Operating margin declined from 18.1% in March quarter last year to 12.3% in March 2015. As a result, operating profit fell 16.4% to ₹ 89.87 crore in the latest quarter.
“EBITDA margins declined 395 bps (basis points) QoQ to 12.3% led by integration of the lower margin Rangson business," ICICI Securities Ltd said in a note. EBITDA or earnings before interest, taxes, depreciation and amortization, is a measure of operating profitability.
“Currency fluctuation created a significant headwind along with the reallocation of revenue in a key client from Q4 (fourth quarter) to Q3 (third quarter). Due to these reasons, financial performance was muted," Krishna Bodanapu, managing director and chief executive officer of Cyient, said.
Net profit for the financial year ended 31 March grew 32.8% to ₹ 353.3 crore for the Hyderabad-based company while annual revenues increased 24% to ₹ 2735.9 crore.
The company generated ₹ 296.8 crore of cash during FY15, 36% higher than the previous fiscal, taking total cash on the company’s books to ₹ 656.5 crore.
Cyient acquired three companies over the past 13 months—Softential Inc., Invati Insights Pvt. Ltd. Rangsons Electronics.
“While Q4 was a muted quarter, pipeline and backlog remain very strong. Traction from existing clients remains strong and we continue to see good wins," Bodanapu said. The company expects some headwinds in the first quarter of the current fiscal due to annual salary hikes but the impact of it will be “significantly less" compared to previous years because of higher share of offshore revenue, better resource utilization and cost control.
Cyient stock rose 2.67% to ₹ 490 on BSE while the benchmark Sensex declined 0.56% to ₹ 27,735.02 points.
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