Cyient Q1 Review - Value Buy In An Overheated Small Cap Universe: ICICI Securities
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ICICI Securities Report
Cyient Ltd.'s revenue was marginally ahead of our estimates.
Services segment remained stable while design-led manufacturing (down 20% QoQ, U.S. dollar) witnessed a sharp drop led by seasonality.
Within services, aerospace, communications and utilities verticals grew in the range of 2-4.4% QoQ (U.S. dollar).
Services’ Ebit margin expanded 100 basis points QoQ - led by operational optimisation and lower selling, general and administrative spends.
However, negative operating leverage at design-led manufacturing remained a drag on overall margins.
While Cyient's Q1 FY22 growth in services was impacted due to Covid-19 second wave, FY22 growth and margin outlook remained upbeat.
Order intake (services) increased ~22% YoY.
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