Cyient net profit falls 2.6% to Rs84.3 crore in March quarter1 min read . Updated: 22 Apr 2016, 01:41 AM IST
On an annual basis, Cyient?s adjusted net profit fell 2.6% to Rs344.3 crore, on revenue of Rs3,095.60 crore
Hyderabad: Engineering services provider Cyient Ltd said on Thursday that its adjusted net profit dropped 2.6% to ₹ 84.3 crore for the quarter ended 31 March on account of stagnation of business in its core divisions and poor sales from its two recent acquisitions.
The adjusted profit includes one-off treatments such as ₹ 8.7 crore to pay bonuses in accordance with changes in Payment of Bonus Act, ₹ 4.1 crore towards foreign exchange impact and ₹ 5.6 crore towards reassessment of depreciation of software and other intangible assets.
Excluding these one-offs, the net profit fell to ₹ 65.9 crore, a decline of 29.7% over the year-ago period.
Quarterly revenue rose 11.8% to ₹ 815.8 crore.
On an annual basis, the company’s adjusted net profit fell 2.6% to ₹ 344.3 crore, on revenue of ₹ 3,095.60 crore. Excluding adjustments, annual net profit fell 7.6%.
Managing director and chief executive officer Krishna Bodanapu, son of the company’s founder and executive chairman B.V.R. Mohan Reddy, said it has been a challenging year for Cyient.
“The core business of the company consisting of the engineering and DNO (data transformation, network and operations) operations was flat," Bodanapu said in a statement.
“In addition to revenue growth in the core business, we faced significant headwinds in some of the investments we made."
Softential Inc., a US-based software provider for telecom and cable operators that Cyient bought in March last year, had a challenging quarter in software sales, impacting the parent’s revenue growth and profitability.
Mysuru-based electronics system design and manufacturing (ESDM) services company, Rangsons Electronics Pvt. Ltd., which Cyient acquired in January 2015 “faced significant headwinds with the cyclicality of the business."
Chief financial officer Ajay Aggarwal said integration of some of the acquired companies was taking longer than expected.
“We had consistent Q-o-Q (quarter-on-quarter) growth, but the revenue for the year was lower than what we originally committed. As a result of these challenges FY16 was a disappointing year," said Bodanapu.
Cyient’s stock fell 3.94% to ₹ 482.15 on BSE while the benchmark Sensex gained 0.14% to 25880.38 points.