More Stories

Informist, Friday, Jul. 31, 2026

 

Please click here to read all liners published on this story

--Cyient CFO Kulkarni: Expect sales in Q2 to be better than in Q1
--Cyient CFO Kulkarni: Holiday season in key markets to dent Q2 sales
--Cyient CFO: See far better sales in Oct-Mar compared with Apr-Sept
--Cyient CFO: Weakness in energy vertical offsetting growth in other areas
--Cyient CFO: Seeing weak sales in utilities, mining verticals
--Cyient CFO: Arm Citec to drive growth in energy vertical Q3 onwards
--Cyient CFO: Expansion of Citec offerings in North America to aid growth Q3
--Cyient CFO: Oct-Mar pipeline looks good, West Asia war a drag
--Cyient CFO: Expect margins to recover further in coming quarters
--Cyient CFO: See broad-based margin recovery ahead
--Cyient CFO: Sales growth in aerospace vertical seen at current levels
--Cyient CFO: Not seeing extraordinary pricing pressure due to AI
 

 

By Shakshi Jain and Narayana Krishna

 

NEW DELHI/HYDERABAD – Cyient Ltd.'s top line for the ongoing second quarter is likely to be better than that for the June quarter and overall, the latter half of 2026-27 (Apr-Mar) is expected to rope in far stronger revenues than the former, Chief Financial Officer Shrinivas Kulkarni told Informist in a virtual interview on Jul. 24, a day after the company's June quarter earnings.

 

Expectations for a better September quarter hinge on the belief that several industry-specific challenges will decline then. "The sector-specific challenges that we're getting in Q1 (Apr-Jun) will minimise to some extent in Q2 (Jul-Sept). However, the headwind in Q2 is also the holiday (season). So, there will be some seasonal softness. It's not structural. But we still expect Q2 to be better than Q1," Kulkarni said. He, however, refrained from giving a number for the expected revenue improvement.

 

Expectations tied to a significantly better second half ride on anticipated revenue growth in the energy vertical from the December quarter, aided by the Finland-based Citec business, which was acquired in 2022. "We'll see some softness even in Q2 in that sector. But Q3 (Oct-Dec) onwards, we are confident it will come back to growth for us," Kulkarni said, explaining that the energy segment is experiencing significant decline, which is offsetting the growth seen in other areas of business.

 

Cyient provides engineering, digital transformation, and sustainable technology solutions across the oil and gas, power generation, nuclear, and clean energy sectors. Citec is a plant and engineering services company that caters to customers across energy, process, oil and gas, and manufacturing industries.

 

"The order book is translating into revenue, barring energy, which is a very sector-specific challenge that we are facing at this point in time," Kulkarni said. He added that while a healthy order book and deal pipeline for the second half have provided some early indications for a revenue growth forecast for FY27, the company is uncertain where it will land. This is also due to uncertainties tied to the war in West Asia, which has impacted margins in the energy business.

 

Kulkarni said a weak first quarter increases the ask rate for the remaining quarters and the company would have been better positioned to provide a revenue growth guidance for FY27 amid a more certain demand environment.

 

Cyient's digital, engineering, and technology (DET) business has entered the September quarter with its strongest-ever order book at $168.2 million.

 

Revenues in the energy vertical are expected to grow from the December quarter on the back of operational changes and planned expansion of offerings to North America, Kulkarni said. "What we have done is the go-to-market workforce, we have refreshed that over the last 12 months. So, there is a new team in place who (which) is sort of looking at the market differently."

 

In the Citec business, Kulkarni said a company executive is now driving sales of the offerings in North America to expand from primarily the Nordic markets currently. "So, we are seeing some early signs that the pipeline is shaping up and growing well. Hopefully, that results into revenue growth for us in the coming quarters."

 

Cyient comprises the core DET business, design-led manufacturing business which is separately listed on the bourses as Cyient DLM Ltd., and a wholly-owned semiconductors subsidiary. Within the DET business, the company operates in three segments - transport and mobility, networks and infrastructure, and strategic and new growth units.

 

Kulkarni said transport and mobility as well networks and infrastructure segments are recording healthy year-on-year and sequential growth. In the networks and infrastructure segment, growth in the communications category is compensating for the weakness in the utilities category to secure overall growth for the segment. In the strategic and new growth units, the healthcare and life sciences category is performing well but the energy, and mining and minerals verticals are reporting weak sales.

 

According to Kulkarni, it will be another month before all the closing formalities tied to the acquisition of TAO Digital Solutions Inc. are completed and Cyient will likely consolidate only seven months of the startup's financials in the current year. He pointed to a rough run rate of $90 million-$100 million in revenues for the AI-native company per year. This implies roughly 6-7% of Cyient's FY26 revenues for seven months.

 

Kulkarni does not expect a significant increase in the company's amortisation costs due to the acquisition. He also ruled out any further acquisitions in FY27. "So for the moment, after the buyback and the TAO acquisition, for this year at least, our capital allocation priorities are all sort of done. Focus is now on execution but those will not happen very likely this financial year," he said.  

 

Cyient reported a consolidated net profit of INR 1.04 billion for the June quarter, up almost 90% sequentially. Consolidated revenues for the quarter grew 7.7% sequentially to INR 20.76 billion. In the DET business, the top line rose 2.7% sequentially in rupee terms but declined 0.5% in constant currency terms. This business accounts for over 74% of the company's overall top line for the quarter.

 

Revenues from the transportation and mobility segment grew 2.5% sequentially in constant currency terms for the June quarter and those from the networks and infrastructure segment rose 0.9%. Meanwhile, contribution from the strategic units segment fell 8.5% sequentially.

 

 

DEMAND, OUTLOOK

Kulkarni said revenues from the transportation and mobility segment -- which comprises the aerospace, rail, and automotive verticals –- could see double-digit growth in FY27, sustained by the current order book and the price hike awarded by customers. He, however, lamented the absence of new programme launches by customers in the aerospace vertical. "So Boeing and Airbus have both stalled the announcement of any new designs in aircraft. That also has a cascading effect on the entire industry. So, what that means is the current growth is sort of assured, but we cannot see more growth than that," he explained.

 

For the cyclical automotive sector, Kulkarni said there are pockets that are performing extremely well alongside some that are not. "Out of the mix of businesses that we have, we are actually seeing favourable tailwinds. We are actually seeing momentum and growth coming into that business," he added.

Kulkarni cited robust demand in the communications vertical and weakness in the utilities category. "As you may have seen, all the top providers, AT&T, Verizon, etcetera, they have launched the fibre rollout, which means the work will come to us," he said, adding that the company is working hard to build a pipeline in the utilities vertical.

 

Kulkarni clarified that the weakness in the utilities vertical is not an industry-specific phenomenon but rather lack of focus on sales within the company. Cyient is trying to solve the issue structurally. "So these are the two areas where I think we will see growth. The pipeline is also shaping up quite well to support that hypothesis," Kulkarni said.

 

Among strategic units and new growth areas, the healthcare and life sciences vertical is performing well and enjoys a healthy deal pipeline, according to Kulkarni. Meanwhile, the energy as well as the mining and minerals verticals face structural challenges. In the energy vertical, Cyient requires to reorient business focus beyond Europe and the Nordic region. "...Which is what we are doing today and the pipeline is shaping up. We have a few new wins there, new logos," Kulkarni said, while warning that meaningful growth visibility might be some time away given the long sales cycle. 

 

For the mining and minerals category, Kulkarni said, "The consulting business is going down, but then the rest of the mining industry is doing well, and so we are seeing some growth offshoots there." He said the energy vertical constitutes strong weightage, implying this segment will see significant growth.

 

According to the finance chief, margins across the three segments are largely similar, and Cyient is targeting recovery across the board. "Right now, we are trying to stop the leakage in the energy business, which is where the concern is. We will see broad-based growth going forward but led by transportation as well," he said.

 

Earlier this year, Cyient had pushed back the timeline for reaching its FY27 exit earnings before interest and tax margin guidance of 15% for its DET business to the September quarter of FY28, citing slower revenue growth. For the June quarter, the DET business registered a 79 basis-point sequential expansion and a 114 bps annual improvement in the metric to 13.2%.

 

According to Kulkarni, there is no significant change in pricing pressure due to artificial intelligence but customers now expect more automation baked into the delivery models, which can reduce costs for them. "Customer wants more by paying the same dollars. It is up to us to evolve our delivery models to meet their criteria as well as make margins from there."

 

On government contracts, the CFO said Cyient is engaging with the government in specific areas such as utilities and semiconductors, and also companies that serve the domestic market. In the rail vertical, Cyient's focus is oriented towards exports.  End

 

US$1 = INR 95.36

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.