Cyient’s Q3 FY25 results have raised eyebrows among investors, with profit plunging by 16.92% YoY and the stock dropping 19% post-announcement. With leadership changes and revised growth guidance, the big question is: What lies ahead for Cyient? Let’s break it down.
Cyient’s Q3 FY25 performance: Key numbers
Financial results at a glance
| Metric | Q3 FY25 | Q2 FY25 | QoQ Growth | Q3 FY24 | YoY Growth |
| Total Revenue | ₹1926.4 Cr | ₹1849.1 Cr | +4.18% | ₹1821.4 Cr | +5.76% |
| Operating Income | ₹211.4 Cr | ₹230.7 Cr | -8.37% | ₹209.7 Cr | +0.81% |
| Net Income | ₹122.3 Cr | ₹179.1 Cr | -31.71% | ₹147.2 Cr | -16.92% |
| EPS (₹) | 11.02 | 16.14 | -31.72% | 16.77 | -34.29% |
- Revenue grew by 5.76% YoY to ₹1926.4 crore.
- Net profit declined by 16.92% YoY, settling at ₹122.3 crore.
- On a quarterly basis, profit shrank by 31.71%, raising investor concerns.
- EPS dropped significantly by 34.29% YoY, signaling profitability challenges.
What’s worrying investors?
1. Rising operational costs
Cyient’s bottom line has taken a hit due to increasing expenses:
- Selling, General & Administrative (SG&A) expenses rose 5.36% QoQ and 5.99% YoY.
- Total operating expenses climbed 5.97% QoQ and 6.41% YoY.
This cost pressure is directly impacting profitability.
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2. Weak FY25 guidance
Initially, Cyient projected high single-digit revenue growth for FY25. That estimate has now been downgraded to a 2.7% decline, a clear signal that the company anticipates further struggles ahead.
3. Stock tumbles 19%
Investor sentiment turned negative post-Q3 results:
- Cyient’s stock plummeted 19% on January 24, trading at ₹1,424.95 on NSE.
- The company’s YTD return stands at -4.47%, and 6-month return at -7.34%.
4. Leadership shakeup adds uncertainty
Adding to the turbulence, CEO Karthikeyan Natarajan resigned, with Krishna Bodanapu stepping in as interim CEO. Leadership transitions can create instability, making investors cautious about the company’s strategic direction.
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Are there any positive signs?
Despite the challenges, a few positive indicators remain:
- Record order intake: Cyient posted its highest-ever order intake of $312.3 million in Q3, a 100% QoQ increase.
- Semiconductor business expansion: Cyient continues growing its semiconductor division, a potential long-term growth driver.
- Analyst ratings remain mixed: As of January 24, 2025:
- 2 analysts recommend Sell
- 5 analysts recommend Hold
- 5 analysts recommend Buy
- 6 analysts rate it Strong Buy
The overall consensus still leans towards Buy, suggesting belief in a potential turnaround.
What should investors do?
With profitability under pressure and weak guidance, Cyient remains a high-risk, high-reward stock for now. Short-term traders may want to stay cautious, while long-term investors should watch for signs of improved cost control and execution.
Key takeaways:
- Short-term outlook is weak due to cost pressures and leadership changes.
- Long-term investors should monitor execution and order conversion.
- Watch for analyst revisions, as further earnings downgrades could impact the stock further.
Conclusion
Cyient’s Q3 FY25 results highlight significant hurdles, from declining profits to leadership uncertainties. While some analysts remain optimistic, the 19% stock drop suggests market concerns. The next few quarters will be crucial in determining Cyient’s trajectory.
