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Informist, Tuesday, Oct. 14, 2025

By Arya S. Biju

MUMBAI – Weak demand from the energy segment is expected to lead Cyient Ltd. to report another set of disappointing earnings in the September quarter, with both top line and bottom line falling on a sequential as well as on a year-on-year basis. However, the sequential decline in the company's revenue and profit is expected to be limited to low-to-mid single digits, which will be better than the double-digit sequential fall it had reported in both these metrics in the previous quarter. The company's earnings before interest and tax margin, on the other hand, is expected to improve sequentially, driven by cost optimisation and foreign exchange gains, analysts said. 
 
The manufacturing and engineering technology solutions company is expected to report a consolidated net profit of INR 1.52 billion for the latest quarter, down a little over 1% on quarter and down over 15% on year, according to the average of estimates from 11 brokerages. The highest estimate for the company's net profit is INR 1.72 billion by Nuvama Wealth Management Ltd. and the lowest is INR 1.32 billion by HSBC Global Research.

 
The company's consolidated revenue for the quarter is expected to fall by over 6% on quarter and over 13% on year to INR 16.01 billion, the average of estimates showed. Prabhudas Lilladher Pvt. Ltd. has the highest estimate for the company's net sales at INR 19.10 billion and HDFC Securities Ltd. has the lowest at INR 14.19 billion. 

In dollar terms, Cyient is expected to report a revenue of $179.73 million, down over 10% from the $200 million reported in the previous quarter and over 18% lower than the $220.70 million reported in the corresponding quarter a year ago.

 
Revenue from the company's core business – digital, engineering, and technology - is expected to grow 0.4-0.5% in dollar terms, estimates from three brokerages showed. In constant currency terms, the company's revenue from its core business is expected to grow 0.3-0.6% on a quarter-on-quarter basis, estimates from four brokerages showed. Nuvama expects the digital, engineering, and technology services segment to report a 0.3% growth in revenue in constant currency terms and 0.4% in dollar terms, hit by furloughs in Europe, the brokerage said in a note.

Among the business units under the company's digital, engineering, and technology segment, weak demand from the energy segment is expected to be offset by strong growth in the aerospace business, analysts said. Indsec Securities and Finance Ltd. expects the company's aerospace business to continue its growth, while the energy business is expected to improve from the December quarter. 

The company's earnings before interest, taxes, depreciation, and amortisation for the September quarter are expected to increase over 9% on quarter but fall around 15% on year to INR 2.52 billion, according to the average of estimates from five brokerages. Kotak Institutional Equities has the highest estimate for EBITDA at INR 2.73 billion and Motilal Oswal Financial Services Ltd. has the lowest at INR 2.37 billion. 

The company's EBIT margin for the reporting quarter is expected to be 9.6-12.6%, estimates from 10 brokerages showed. This would mean an improvement of 10-310 basis points from the EBIT margin of 9.5% reported in the previous quarter. "EBIT margins are expected to increase by 20 bps qoq (quarter on quarter) with our expectations of DET (digital, engineering, and technology) EBITM (EBIT margin) improvement by 24 bps to 12.3% largely led by FX (foreign exchange) benefits which will help compensate headwinds from soft growth, investments and partial wage hikes," Equirus Securities Pvt. Ltd. said. 

ICICI Securities, on the other hand, expects the company's EBIT margin to remain largely flat during the September quarter in the absence of revenue growth and investments in sales and marketing.

The company will announce its September quarter earnings Thursday. Investors will watch out for updates on the company's semiconductor business, outlook for demand across verticals and deal pipelines. The management's commentary on the impact of US tariffs on its business, as well as the overall spending in the engineering, research and development segment, will be closely monitored by the Street, analysts said. 

The management's commentary on the impact of furloughs on the September quarter, attrition rates, and hiring plans will be closely watched. Updates on new logo additions during the quarter will also be monitored.

Of the 14 research reports on the company available with Informist, five have a 'buy' or equivalent rating on the stock with an average target price of INR 1,688. Of the remaining nine, six have a 'hold' or equivalent rating on the stock with an average target price of INR 1,402 and three have a 'sell' or equivalent rating with a target price of INR 1,050-INR1,150. 

During the June quarter, the company had reported a consolidated net profit of INR 1.54 billion, down around 10% on quarter but up 7% on year. Its revenue from operations for the quarter had fallen over 10% on quarter but had risen over 2% on year to INR 17.12 billion. 

Tuesday, shares of the company closed 0.9% lower at INR 1,152.70 on the National Stock Exchange. The stock has fallen over 7% since the announcement of its June quarter earnings on Jul. 24. 

The following are the Jul-Sept earnings estimates for Cyient from 11 brokerages in descending order of the estimate of net profit in INR million:
 

End

Edited by Saji George Titus

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