Cyient surges on strong Q2 results

The stock rallied 14% to Rs 552 after the company posted 31% QoQ growth in consolidated net profit at Rs 97.25 crore for the quarter ended September 30, 2016.

Cyient has moved higher by 14% to Rs 552 on the BSE after the information technology (IT) company reported 31% growth in its consolidated net profit at Rs 97.25 crore for the quarter ended September 30, 2016 (Q2FY17) on a sequential basis. The company had posted net profit of Rs 73.97 crore in June 30, 2016 (Q1FY17).

Total income from operations grew 9.4% at Rs 914 crore during the quarter under review against Rs 835 crore in preceding quarter. The company reported strong revenue growth of 10.3% in constant currency.

“Operating margin improved around 100 basis points (bps) to 14% on QoQ despite the headwinds on FX, salary hike and one off 25 years celebration expenses,” Cyient said in a press release.

“We expect our services business to grow in double digits and our DLM business to grow by 50%. We expect our operating margin to remain flat to marginally higher for the year leading to double digit earnings growth,” said Krishna Bodanapu, Managing Director and Chief Executive Officer.

“It is heartening to see business continuing momentum and delivering a robust revenue growth of 9.5% QoQ in dollar terms and 10.3% in constant currency terms to coincide with this milestone. This is the highest ever growth in last 22 quarters,” said Ajay Aggarwal, Chief Financial Officer.

Analysts at Motilal Oswal Securities expected USD revenue growth of 3.8% QoQ for the quarter.

At 03:09 pm, the stock was up 13% at Rs 545 on the BSE, as compared to 1.6% fall in the S&P BSE Sensex. A combined 953,113 shares changed hands on the counter so far, against an average sub 100,000 shares that were traded daily in past two weeks on the BSE and NSE.