Cyient Sees 45% Profit Jump In Q1 But Misses Estimates As Costs Rise

Cyient reported a 45 per cent rise in quarterly profit on Tuesday that just missed analysts' estimates as rising expenses at the engineering and IT services company offset a strong order pipeline and demand recovery in some sectors.

The Hyderabad-based company reported a 45 per cent rise in consolidated net profit of Rs 168 crore for the first quarter ended on 30 June 2023, compared with Rs 116 crore a year ago.

Analysts, on average, were expecting Cyient to earn Rs 173 crore, as per Refinitiv data.

Cyient said its US subsidiary incurred legal costs of Rs 11.1 crore during the quarter, and overall expenses rose 30 per cent.

The company's results come after bigger rivals like Infosys, Tata Consultancy Services and Wipro have either cut forecast or missed estimates as the country's IT industry faces slowing demand for services and cancellation of orders prompted by fears of a global recession.

For Cyient, revenue from its biggest Digital, Engineering and Technology (DET) segment rose to Rs 1,450 crore, up from Rs 1,060 crore a year earlier. Consolidated revenue from operations rose 35 per cent to Rs 1,690 crore for the quarter.

"We won 6 large deals in DET with a total contract potential of USD 48.8 million in this quarter. The order intake stood at USD 193.2 million, up 32.5 per cent year-on-year. Our pipeline for the year looks robust," Cyient's Managing Director Krishna Bodanapau said on Tuesday.

Cyient shares closed 1.07 per cent lower at 1466.55 rupees on Tuesday.