India’s Cyient posts Q1 profit jump but misses estimates as costs rise

HYDERABAD (Reuters) – Saint India Ltd. on Tuesday reported a 45 percent rise in quarterly profit, missing analysts’ estimates, as higher expenses at the engineering and information technology services company offset stronger demand and a recovery in demand in some sectors.

The Hyderabad-based company reported a 45% increase in consolidated net profit of 1.68 billion rupees ($20.53 million) for the first quarter ended June 30, 2023, compared to 1.16 billion rupees a year earlier.

Analysts expected, on average, Cyient to earn 1.73 billion rupees ($21.14 million), according to Refinitiv data.

Cyient said its US subsidiary incurred legal costs of 111 million rupees ($1.36 million) during the quarter, and overall expenses were up 30%.

The company’s results come after bigger rivals such as Infosys Ltd, Tata Consultancy Services and Wipro slashed forecasts or miscalculated as the country’s IT industry faced slowing demand for services and order cancellations due to fears of a global recession.

For Cyient, revenue from its largest digital, engineering and technology (DET) segment rose to 14.5 billion rupees ($177.09 million), up from 10.6 billion rupees ($129.58 million) a year earlier. Consolidated revenue from operations rose 35% to 16.9 billion rupees ($206.40 million) during the quarter.

“We won 6 large deals at DET with a total contract potential of $48.8 million this quarter. Orders received were $193.2 million, up 32.5% year-on-year. Our pipeline for the year looks strong,” said Krishna Buddanapu, Managing Director, Cyient on Tuesday.

Cyient shares closed down 1.07% at Rs 1,466.55 on Tuesday.

($1 = 81.8305 Indian rupees)

(Reporting by Rishika Saddam).