BENGALURU (Reuters) – India’s Cyient reported a drop in first-quarter profit on Thursday, hurt by greater than expected delays in project execution.
The company reported consolidated profit of 1.44 billion rupees ($17.2 million) in the quarter ended June 30, down 14.4% from last year.
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KEY CONTEXT
Cyient reported a 0.6% decline in revenue due to challenges in the railway industry and its connectivity segment.
Indian technology firms have grappled with sluggish demand through the last fiscal year as clients focused on cutting costs in the face of high inflation and interest rates.
Cyient’s rival Tata Elxsi reported a drop in quarterly profit as well, while L&T Technology Services’ revenue missed estimates.
However, companies in the technology sector, which like IT firms, earn a significant share of revenue from the U.S., stand to benefit from increased client spending due to likely interest rate cuts in the world’s biggest economy later this year, according to analysts.
PEER COMPARISON
Valuation Estimates (next 12 Analysts’ sentiment
(next 12 months)
months)
RIC PE EV/EBI Revenue Profit Mean # of Stock to price Div yield
TDA growth (%) growth (%) rating* analysts target** (%)
Cyient 23.19 13.75 10.60 13.26 Buy 17 0.86 1.62
L&T Technology 37.79 24.78 10.07 8.69 Sell 27 1.15 0.98
Services
KPIT Technologies 58.92 35.94 21.52 30.54 Buy 14 1.04 0.26
Tata Elxsi 49.01 34.99 12.09 10.39 Sell 12 1.05 1.00
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 83.7140 Indian rupees
(Reporting by Varun Hebbalalu in Bengaluru; Editing by Varun H K)
