ECONOMY

Cyient Q1 Review – Value Buy In An Overheated Small Cap Universe: ICICI Securities

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Cyient Ltd.’s revenue was marginally ahead of our estimates.

Services segment remained stable while design-led manufacturing (down 20% QoQ, U.S. dollar) witnessed a sharp drop led by seasonality.

Within services, aerospace, communications and utilities verticals grew in the range of 2-4.4% QoQ (U.S. dollar).

Services’ Ebit margin expanded 100 basis points QoQ – led by operational optimisation and lower selling, general and administrative spends.

However, negative operating leverage at design-led manufacturing remained a drag on overall margins.

While Cyient’s Q1 FY22 growth in services was impacted due to Covid-19 second wave, FY22 growth and margin outlook remained upbeat.

Order intake (services) increased ~22% YoY.

Click on the attachment to read the full report:

ICICI Securities Cyient Q1FY22 Results Update.pdf

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