Shares of Hyderabad-based Cyient Limited climbed nearly 4 percent on Friday, January 13, after the net profit of the company surged 97.22 percent to ₹156 crore on a 15.9 percent rise in revenue from operations for Q3 FY23 over Q2 FY23 and surpassed industry expectations.
The tech firm benefited from four acquisitions last year, including its largest ever, of Finnish engineering services provider Citec, which helped it extend its reach in Europe.
During Friday’s trade, the stock opened at a price of Rs. 889.90 per share against the previous close of Rs. 883.30 per share and grew further during the early trading session to touch an intraday high of Rs. 917.95. However, the stock failed to hold onto this rally and was trading at ₹887.35, up by 0.46 percent, at 12:55 p.m. on the NSE.
The stock touched a 52-week high of Rs. 1,059.40 on January 12, 2022 and a 52-week low of Rs. 720 on May 26, 2022, indicating that at the current level, the stock is trading over 23 percent above its 52-week low and 16 percent below its 52-week high.
The stock has grown nearly 9 percent in the last one month. Moreover, in the past six months, it has yielded a return of 15.5 percent. However, the stock has declined almost 14 percent in the last one year.
On Thursday, the company reported its Q3 results through an official filing stating that the consolidated revenue from operations for the quarter that ended December 31 stood at 16.18 billion rupees, compared with 11.83 billion rupees a year ago.
Consolidated net profit rose to 1.56 billion rupees while normalized group earnings before interest and taxes stood at 2.09 billion rupees with a margin of 12.9 percent.
In October, the company had said it expected acquisitions to add about $150 million annually to its revenue. The acquisitions contributed to 15.6 percent of the total revenue for the quarter and the company's services order intake grew 83 percent quarter-on-quarter.
"We continue to witness strong momentum across the business, driven by key wins, robust Order Intake, and pipeline. We won 5 large deals in services with a strong total contract potential of $59.2 million this quarter. We also witnessed significant growth across key accounts, with revenue from the top 30 accounts growing at 14.9% YoY in constant currency terms. We have a strong order intake at $237 million, the highest in the last 15 quarters," said Krishna Bodanapu, MD and CEO of the company.
A few days back, Cyient's subsidiary Cyient DLM filed papers for a ₹740 crore IPO with market regulator SEBI.
The proposed listing of Cyient DLM will comprise an IPO in the form of fresh issue of new equity shares for an amount of up to ₹740 crore, the company informed.
Cyient's strong performance comes even as the industry braces for a demand slowdown amid fears of a recession in major western markets.
Domestic brokerages HDFC Securities and Motilal Oswal have a ‘buy’ call on Cyient with a target price of ₹1,030 and ₹1,100, respectively, reported ET.
Cyient Ltd., established in 1991, is a mid-cap company with a market capitalization of ₹9,758.36 crore that operates in the IT software industry. The company, through its subsidiaries in the United States, United Kingdom, Germany, Japan, Australia, Singapore and India, provides a range of services, including software product development, consulting, analytics and implementation.
