Cyient Ltd. – Q3FY15 Result Update :: HDFC Securities

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In our Q2FY15 Result review dated Oct 22, 2014, we recommended investors to buy Cyient Ltd. at the then CMP of Rs. 449.6 and to average it on dips to Rs. 387-405 for a
price target of Rs. 511 over the next quarter. Thereafter the stock met our target on Nov 10, 2015 and subsequently touched a new high of Rs. 592.8 on Jan 15, 2014.
Currently it is quoting at Rs. 549.
Cyient delivered robust set of numbers for Q3FY15 with better than expected revenue & PAT growth and in line numbers at the operating level. We present an update on
the stock.
Key highlights of Q3FY15 results: (IFRS)
 Consolidated revenues for the quarter increased by 23.1% Y-o-Y and 5.9% Q-o-Q to Rs. 7118.1 mn. USD revenues increased by 3.5% Q-o-Q to USD 114.7 mn driven
largely by higher revenues from Softential, which grew by 70% Q-o-Q to USD 9 mn. Growth at Softential was mainly driven by planned revenue of Q4FY15, realizing in
Q3FY15.
 Vertically, the growth was driven by Data Transformation, Network and Operations (DNO), which increased by 12.1% Q-o-Q (41.6% of revenues) in USD and 15.7% Qo-Q
in CC, aided by higher growth in Softential. Excluding Softential, the growth in CC stood at 7.1% Q-o-Q. Engineering (ENGG) [57.5% of revenues] declined by 2.1%
Q-o-Q in USD owing to lower billing days (seasonality) and adverse impact of cross currency. In CC, the revenues declined marginally by 0.4%. Geographically, the
growth (in CC) was broad based with all regions growing between 4-6%.
 EBITDA rose marginally by 1.9% Y-o-Y & by 7.1% Q-o-Q. EBITDA margins fell by 338 bps Y-o-Y, but improved by 19 bps Q-o-Q to 16.3%. The sequential margin
expansion was on account of change in mix of revenues, improved utilization and rupee depreciation.
 PAT grew at a relatively better rate by 45.3% Y-o-Y & 11.8% Q-o-Q. Y-o-Y growth was supported by higher other income (on account of higher treasury income & forex
gains of Rs. 202.6 mn compared to loss of Rs. 173.5 mn in Q3FY14. Q-o-Q growth was aided by lower effective tax rate (down 165 bps Q-o-Q to 28% and higher other
income (up 7.5% Q-o-Q). PAT margins improved by 234 bps Y-o-Y & 66 bps Q-o-Q to 13.5%.
 EPS for the quarter stood at Rs. 9 vs. Rs. 6.2 in Q3FY14 & Rs. 8.1 in Q2FY15.

http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010897