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ICICI Securities Report
Cyient Ltd.’s reported Ebit margin for Q2 FY21 was 200 basis points ahead of our estimate led by strong margin expansion in both services (540 basis points QoQ) and design-led manufacturing (down 930 basis points QoQ).
Operational improvements and lower direct costs were the key margin tailwinds. Revenues were in-line with our estimates.
While aerospace and defence (down 11.5% QoQ in U.S. dollar terms, services) continued to struggle, communications (up 7.7% QoQ, U.S dollar) and transportation (up 21.6% QoQ, U.S. dollar) saved the day.
For FY21, the company now expects low double-digit revenue decline. Margins are expected to be flat YoY.
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