Cyient Q3FY17 Concall Summary

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Financial Highlights

Cyient Q3FY17 Performace
  • Revenue  is in  line with expectation. Revenue growth of 16.5% year on year
  • Q3 Revenue at US $135.8 million increased by 0.6% QoQ
  • Net profit for Q3 is Rs. 942 million increased by 13.8% year on year
  • The Company had highest ever cash flow of 127.3 er
  • DSO stands at 76 days (lowest ever) which shows a positive act
  • Company shows a positive approach and wanted to expand by opening two new offices in Pune, India and other in Florida, USA
  • DLM Sector has given l00 Cr revenue in this qtr for the first time as a part of Cyient.
  • Strong growth in Revenue  in Rs terms 17.1% YoY and 0.4% QoQ :Q3 revenue  stands at Rs .9.17 Cr
  • Q3 was soft as the number of working days were less impacting service revenue by -2% and 40% of the business was in non- dollar currency.
  • Growth of 0.6% in Constant currency
  • PAT is 14% higher against Q3 of  the  last year
  • PAT in Q3 is impacted by higher tax and lower Income from associates, partially offset by higher other income
  • Free cash flow 83% of EBITDA, Rs.12 7 er for Q3
  • DSO stands at 76 days which is lowest ever and reduced by 10 days YoY, 1 day QoQ
  • Rs . 826 er of  cash is available at the end of Q3.
  • During the  quarter  dividend  paid  Rs 408 Mn  and investments  were Rs . 358 Mn (Blom and defence)
  • Other income increase is mainly driven by Unrealized Forex gains
  • Forward contract gain could be$  8 Mn  in coming year
  • Company has hedged 70% of inflows for next 12 months

Management Update

  • Mr. Suman Narayan joined as head of Semiconductor BU.
  • The Company is excited with new licensing and expecting a prominent growth in coming future. The Aerospace business was affected due to less number of working days in the qtr.
  • The Company is planning to expand the human resource
  • Minimum wages increment doesn't affect the Company's financials
  • Customer acceptance is high in aerospace, medical, transportation sectors and low in semiconductor sector.

Awards  and accolades

  • Company has been awarded Prestigious Pratt & Whitney 2016 Supplier Innovation and productivity Savings Awards For delivering highest productivity savings ($5 .2M ), 9 Patents, 250 Standard    Works

Client Sector Update

  • The Aerospace & Defence market shows a prominent growth and also indicates large defence programs in US, with a new indication cyient defence  solution
  • Analytics sector  is growing slow but  with a positive opportunity in  future
  • Transportation sector has shown healthy growth as the Company is working with every big large company. The Company has seen hurdles in exchange rates in this sector .
  • In medical and healthcare sector the industry is consolidating, as lots of merger and acquisition has been held.
  • The Industrial, Energy and natural resources sector emphasis will be on improving products through new technologies (Electronics, loT, analytics, etc.).
  • Communication sector's growth in the industry is expected to be driven  by  fiber  deployment  through CAF II initiatives in the US, shift. The sector is also expecting good money flow.
  • Designed Led Manufacturing (DLM) is witnessing healthy growth as generating lOOcr revenue this qtr for the first time.
  • DLM business will be in the ballpark of 50% growth


  • Cyient Services forecasts 100 bps improvements in operating margin and for the Group the OPM is expected to remain flat to marginally positi ve.
  • Improved onsite job margins : 100 bps
  • Offset by Wage Hike (150 bps) & DLM mix (60 bps)

Blom Aerofilms Acquistion

Blom Aerofilms Snapshopt
  • Company through its European Subsidiary has acquired 100% of UK based GIS company Blom  Aerofilms  Ltd engaged in  providing services  of  data modelling, data acquisition  and data processing.
  • The acquisition is made to strengthen the geospatial business
  • Blom brings complementary skills to strengthen Cyient ' s end to end geospatial solutions in line.
  • Blom has a core team of around 40 people which are focused on the growth aspects

Future Outlook

  • Future Outlook for the year remains unchanged. Company expects Double digit growth in the core business
  • Reason for double digit growth is expected as all the BU's are performing good  and there are lots of large deals will be taken place
  • Future outlook of 50% growth in DLM is possible as the Company is in growing  phase  and  DLM business  is indicating  healthy growt h.
  • Engineering business and communication is growing at a steady rate as the markets in  Asia, Europe  and US is growing
  • Communication, Aerospace, utilities sectors are performing well and only Industrial and natural resources sector is performing soft .
  • The Industry mix will include  aerospace,  medical and defence  sector.
  • DLM business will be in the ballpark of 50% growth