Cyient locked in 10% lower circuit on lower-than-expected Q4 results

Share of Cyient have been locked in the 10 for every cent lower circuit band, at Rs 209, on the BSE on Friday at 01:28 pm immediately after the company’s March quarter (Q4F20) performance arrived under expectations on, both of those, revenue and margin conditions largely due to the affect of Covid-19.

A mixed 2.sixty five million fairness shares have modified fingers on the counter until the time of writng of this report, and there have been pending promote orders for all over 82,000 shares on the NSE and BSE. The inventory of the IT consulting and application organization was investing close to its fifty two-week lower of Rs 200 touched on April 28, 2020.

The company’s revenue for the quarter stood at $149.2 million, for every cent lower quarter on quarter (QoQ) in continual forex conditions. In rupee conditions, consolidated revenue through the quarter underneath evaluate declined 2.9 for every cent at Rs 1,074 crore on sequential foundation.

The consolidated net gain, also, diminished by thirty.4 for every cent to Rs 75.4 crore from Rs 108.3 crore in prior quarter. The substantial affect on net gain due to lower other revenue and lower EBIT (earnings ahead of desire and tax).

On top of that, gross margin at 33.five for every cent was lower by 248 bps QoQ with substantial affect due to the shortfall in revenue. The design and style-led production (DLM) gross margin at 13.3 for every cent was hit due to improvements in revenue blend. Reduce utilisation through the quarter due to Covid-19 preparedness also impacted the margin. EBIT margin was lower by 120 bps mostly due to a quantity fall.

The management expects a sequential revenue decline of fifteen-twenty for every cent in April-June 2020. Thereafter, it expects a restoration on the back again of subject operate limits staying eased, and predicted restoration in Communications and E&U. The management expects subject operate limits to affect in close proximity to-phrase prospects (1HFY21) in verticals like Communications, Vitality & Utilities and Geospatial. Cyient anticipates some of these verticals to recuperate around 2HFY21 as lockdown/subject operate limits relieve out.

Motilal Oswal Economic Products and services have lower its EPS estimate for FY20-22E by 31-33 for every cent due to the worse-than-expected outcomes and commentary. “Offered the continued execution troubles at the organization, dented visibility on earnings restoration and the just one-off trail, hope of a re-score may perhaps be also optimistic,” the brokerage organization stated in outcome update.