Hyderabad-based information technology firm Cyient reported a 6.9% decline in its quarterly revenue due to fewer working days and high on-site deployment in its aero and defense vertical.
The company’s total revenue fell to Rs 1,106 crore in the third quarter ended December 2019 from Rs 1,187.6 crore a year earlier, it said in exchange filings on Thursday.
“... the ongoing forced attrition may impact employee morale, posing further growth challenges, like in (the) case of Cognizant,” a research note from Motilal Oswal said after the company's earnings conference call. It downgraded the company’s stock rating from ‘buy’ to ‘neutral’.
The company’s profit after tax rose to Rs 108.3 crore or Rs 9.8 per share, from Rs 92.1 crore or Rs 8.2 per share a year ago.
“Q3 is generally a slow quarter... The decline in services business was majorly driven by a long-term risk-sharing agreement we signed with one of our key clients. As part of this agreement, we have provided a one-time discount in Q3…,” Cyient CEO Krishna Bodanapu said at the company’s investor presentation.
The firm’s services revenue fell by 3% to about $140 million year-on-year. ($1 = Rs 71.07)
“We expect strong growth through Q4, driven by growth in energy and utilities, transportation and semiconductor, IoT (internet of things) and analytics business units. For FY20, we expect a slight de-growth, driven by decline in key clients across communications and aerospace business units,” Bodanapu said.