- Cyient’s defense BU witnessed a growth of 4.7 per cent QoQ and de-growth of 6.9 per cent YoY in Q4 FY20
- Company’s semiconductor business witnessed de-growth of 22.3 per cent QoQ and 35.1 per cent YoY in Q4 FY20
Cyient, a global engineering and technology solutions company, has reported its consolidated financial results for the fourth quarter (Q4) of FY 2020 that ended on 31 March 2020.
“Our performance was below expectations both on revenue and margin terms largely due to the impact of COVID which was significant on many parts of our business. Our revenue for the quarter stood at $149.2 Mn, 3.8 per cent lower QoQ in constant currency. Services revenue at $132.3 Mn is lower by 5.4 per cent in constant currency due to de-growth in Utilities and Semiconductor businesses and was offset by an increase in the Aerospace & Defense business. The DLM revenue at $17 Mn was higher by 12.4 per cent QoQ,” said Krishna Bodanapu, Managing director and Chief Executive Officer, Cyient.
Group revenue at $625.2 million (Rs 44,274 million)
The company posted group revenue at $625.2 million (Rs 44,274 million). This indicated a de-growth of 5.3 per cent (4.0 per cent in CC terms) and degrowth 4.1 per cent YoY.
“Our gross margin at 33.5 per cent was lower by 248 bps QoQ with significant impact due to the shortfall in revenue. DLM gross margin at 13.3 per cent was lower due to changes in revenue mix. Lower utilization during the quarter due to COVID preparedness also impacted the margin. Our EBIT margin was lower by 120 bps mainly due to a volume drop. For the year, our revenue stood at $ 625.2 Mn which is 5.3 per cent lower YoY. Services revenue at $550.7 Mn was lower by 5.1 per cent YoY while DLM at $74.6 Mn was lower by 6.6 per cent. Degrowth in the services business was driven predominantly by A&D, communication and portfolio BUs,” added Bodanapu.
“The revenue for FY20 stood at $625.2 Mn (₹ 44,274 Mn) with operating profit of $57 Mn (₹ 4,084 Mn) and normalized PAT of $52.2 Mn (₹ 3,727 Mn). Our sustained focus on collections led to a robust EBIDTA to FCF conversion of 56.9% and healthy cash balance of ₹ 9,518 Mn. We generated FCF of ₹ 4,102 Mn for the year. We are preparing to secure future in these challenging times with an aggressive cost control and optimization plan with primary focus on liquidity and cash. This includes rigorous initiatives on collections, working capital cycles, receivables, payables, and discretionary cost control,” said Ajay Aggarwal, president & CFO, Cyient.
Aerospace & defense
Cyient’s defense BU witnessed a growth of 4.7 per cent QoQ and de-growth of 6.9 per cent YoY in Q4 FY20 predominately driven by weak customer spend and impact of Covid pandemic from mid of Q4. For full year, BU de-growth is at 4.7 per cent YoY. The company informed that its services business is expected to de-grow through the year due to the global industry challenges caused by Covid.
Semiconductor
Company’s semiconductor business witnessed de-growth of 22.3 per cent QoQ and 35.1 per cent YoY in Q4 FY20 predominantly driven by IC chips delivery issues due to disruptions in the supply chain. For full year SIA BU witnessed a degrowth of 14.3 per cent YoY. We expect positive business momentum through opportunities in design services for large digital chips, embedded systems and software for automotive and new turnkey silicon opportunities.
Medical technology and healthcare
The Medical and Healthcare business witnessed a de-growth of 10.9 per cent QoQ and a growth of 12.7 per cent YoY. Revenue from key clients has grown considerably through the year. For full year MT&H BU witnessed a growth of 18.5 per cent YoY. We also witnessed a strong growth in the manufacturing side of the business. With the focus on COVID related services we expect positive momentum to be back in the second half of the year.
“We are focused on accelerating business growth and have strengthened our leadership team with the appointment of Karthik Natarajan as the President & Chief Operating Officer and Felice Gray-Kemp as Sr. Vice President & General Counsel. With both joining us we will strengthen our focus on winning new business, especially in digital focused, IP-driven solutions and services. We will continue to strengthen our capabilities across business verticals and realign ourselves to achieve growth through these challenging times,” added Cyient’s CEO.
