Shares of IT firm Cyient gained almost 5% intraday on Friday after the company posted its Q2 earnings.
The Hyderabad-based company reported a 14.8% decline in its consolidated net profit at Rs 83.9 crore for September quarter against a net profit of Rs 98.5 crore in the year-ago period. Cyient's revenue decreased 13.4% to Rs 1,003.3 crore for the quarter under review as against Rs 1,158.9 crore in the same period last fiscal.
On a quarterly basis, company's revenue increased 1.2% from Rs 991.7 crore in the June 2020 quarter and the net profit was higher by 3% from Rs 81.4 crore.
"PAT increased by 3 % quarter-on-quarter mainly from higher operating income driven by higher volume and efficiency," the company said in a regulatory filing.
The highly volatile stock today touched an intraday high of Rs 383.4, rising 4.67% as against the previous close of Rs 366.30 on BSE. The stock also touched an intraday high and low of Rs 385 and Rs 370, respectively.
Cyient stock has gained after 5 days of consecutive fall. Market capitalisation of the small-cap firm stood at Rs 4,202 crore as of today's session. Cyient shares trade higher than 5, 100 and 200-day moving averages but lower than 20 and 50-day moving averages.
Krishna Bodanapu, Managing Director and Chief Executive Officer of Cyient said the second-quarter results are in line with its expectations. "This quarter we focused on setting up the business back on a growth path. We continued our rigour on efficiency improvement and building pipeline for the business," he added.
"Our outlook for H2 is positive and we expect growth based on the outlook and pipeline across most sectors. For the year, we expect a double-digit decline in revenue and margins will be similar to FY20 margins," he added.
The company has won key projects that set it up for a better second half, he said.
Jyoti Roy-Equity Strategist, Angel Broking said, "Cyient reported a 3.4% qoq growth in revenues to USD 135mn. EBIT margins for the quarter expanded by 586bps qoq to 11.0% due to lower employee costs and tight costs control which negated the margin headwinds due to rupee appreciation. During the quarter the company reported order intake of USD 127.3mn, an increase of 9% qoq. While the company did post a growth in revenues it was well short of the growth posted by larger companies like Infosys and TCS."
He added," This was largely due to the continued degrowth in the aerospace and defence segment which is amongst the worst impacted due to the Covid-19 pandemic and degrew by 10.4% qoq. Markets will look forward to management commentary especially on the outlook for the aerospace and defence segment."