Cyient Shares Tank 20% On Weak Guidance For FY25, chief executive officer’s Exit; Know What Analysts Say

Last Updated: January 24, 2025, 11:41 IST

Shares ofCyient Ltd dropped by 20% on Friday, January 24, complying with the firm’s unsatisfactory December quarter outcomes

Shares ofCyient Ltd dropped by 20% on Friday, January 24, complying with the firm’s unsatisfactory December quarter results, launched after market hours onThursday The decrease followed Cyient reduced its profits development projection for a crucial organization sector and changed its EBIT margin assumptions downward.

Cyient currently expects a 2.7% year-on-year profits decrease in consistent money terms for its Digital, Engineering, and Technology (DET) organization for FY25, a considerable change from its earlier assistance of level development.

The firm had actually formerly predicted EBIT margins of 16% for Q4 FY25, and now anticipates them ahead in at 13.5%. Additionally, the abrupt resignation of chief executive officer Karthikeyan Natarajan, that invested simply 20 months in the function, contributed to financier issues. He was anticipated to offer a three-year term, and his sudden separation has actually intensified the firm’s obstacles. Former CHIEF EXECUTIVE OFFICER and Vice Chairman Krishna Bodanapu has actually taken control of acting management.

Cyient’s monitoring additionally changed its FY25 consistent money (CC) profits assistance to a 2.7% decrease, below its earlier projection of level efficiency. The EBIT margin overview for Q4 FY25 was likewise minimized from 16% to 13.5%.

What Should Investors Do Now?

JP Morgan devalued Cyient to a “neutral” rating, slashing its target price to Rs 1,750, suggesting a 17.5% upside from current levels. The downgrade was driven by the unexpected CEO exit and reduced guidance, as well as concerns about the company’s ability to achieve single-digit growth and return to 16% margins by FY26.

Emkay Global also downgraded Cyient to a “reduce” ranking, establishing a target cost of Rs 1,700, mirroring a prospective benefit of 14%. The brokerage firm pointed out weak implementation, missed out on margin quotes, and the management modification as essential elements influencing the supply’s overview.

Despite the profits efficiency straightening with assumptions, Cyient encountered blended outcomes throughout its organization sectors. While the DET sector revealed development in Aerospace, Connectivity, and New Growth Areas, the Sustainability sector saw its 3rd successive quarterly decrease. However, the firm reported an all-time high order consumption of $312.3 million, with 13 big offers adding $234.5 million in agreement worth for Q3 FY25.

Cyient’s shares, which had actually increased 2% on Thursday in advance of the profits statement, have actually gone down 32% over the previous year and 24% in the last month.

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