IT firm Cyient stock fell the most on BSE, after hitting a fresh 52-week low, as the company recorded losses in its Q1 earnings report. This quarter-on-quarter performance by the tech giant, that is recorded as the worst in the past 10 years has led brokerage firms analysts cut ratings on the stock.
"Our Q1 FY20 results were disappointing, we recorded a revenue of USD 156.6 million lower by 5.2% quarter-on-quarter and 2.6% year-on-year," Cyient Managing Director and CEO Krishna Bodanapu said.
The stock opened with a gap down pattern, losing 3% to trade at Rs 524.00, against the last closing price of Rs 544.15 on BSE and later fell over 11.40%to touch Rs 482.10, its fresh 52-week low.
IT firm Cyient Thursday posted a 9.7% rise in net profit at Rs 90.5 crore for the June 2019 quarter, compared to Rs 82.5 crore recorded in the corresponding quarter a year ago, as per the regulatory filing submitted on Thursday to the bourses.
The Hyderabad-based company's revenue rose marginally by 52.2% in April-June quarter, however, on a sequential basis, the revenue declined by 6.4% QoQ and 2.6% YoY. The statement added that by the end of June 2019, the company had a total of 15,043 employees with a voluntary attrition rate of 17.4%.
"While Q1 was expected to be a weak quarter, Cyient misread the recovery in A&D and Communications, its two largest verticals that were expected to offset the anticipated weakness in other segments. However, the recovery is now expected to be more robust, giving confidence of 5 %+ QoQ growth for Q2FY20," Motilal Oswal said in a results' review note, adding that they hope for a "robust recovery" in the coming quarters with expectations of a 5%QoQ growth in Q2FY20 and maintained a 'Buy' on the stock.
Similarly, brokerage firm HDFC Securities has maintained its 'Neutral' stance on the stock. Reliance Research too maintained 'Buy' recommendation on the stock with a revised Target Price of Rs 610, while reducing their EPS estimates by 13-15% for FY20E/FY21E and cutting target PE multiple to 12.5x from 14x earlier.
However, Cyient's stock target was slashed to 'Neutral' from 'Buy' at Phillip Securities and to 'Add' from 'Buy' at Centrum Broking.
"The board of directors also approved the merger of wholly-owned subsidiaries, Cyient DLM, and Cyient Insight, with the company," Cyient said in a statement.
According to data available with the exchange, there was a surge in volume trade with 0.52 lakh shares and 12 lakh shares changing hands on BSE and NSE, both above the 3, 5, and 10-day moving averages. The share price of Cyient Ltd. currently trades at Rs 493.95 on BSE and Rs 483.70 on NSE, respectively.
Edited by Rupa Burman Roy