Cyient Limited is a global engineering and technology solutions company headquartered in India. It provides services across digital engineering, design-led manufacturing, and semiconductor solutions. With a strong legacy in engineering, Cyient partners with clients in aerospace, automotive, communications, and energy sectors to drive innovation, operational efficiency, and digital transformation through domain expertise and advanced technology integration.
In this article we are going to discuss the summary of the management commentary that was delivered on Q4FY25 performance.
Quarterly Performance & Outlook
- Q4 was a little bit lower than what company had anticipated, largely due to a weaker March caused by global uncertainties.
- The company do not see any significant challenge because of this. Company’s customers still are very committed to their programs. The programs that have been awarded will continue to start during the course of the next few months.
- The good news continues that a lot of the deals that company has won continue to be in a ramp-up phase. A lot of the existing customers are doing quite well, which is also reflected in the growth of the top 10 and the top 20 customers.
- Q1 FY26 will have a softer start but business confidence remains intact.
Full-Year Performance & Strategic Positioning
- Company have delivered the highest revenue ever for the company, and the revenue has doubled in the last 7 years and has grown 3x in the last 12 years.
- Business has evolved into three strategic axes:
- DET (Digital Engineering and Technology) – core engineering business.
- Semiconductor business – spun off as Cyient Semiconductor Private Limited (CSPL).
- DLM (Design Led Manufacturing) – grew 27% YoY.
- Cyient is no longer reliant on any one geography, industry, or capability. The company has Significant customer and deal momentum in DET, DLM, and semiconductors.
Notable Wins:
- Engineering order for a green hydrogen project in Norway (marine transportation sector).
- Partnership with Micware Navigations in intelligent mobility.
Semiconductor Spin-Off:
- Suman Narayan appointed CEO of CSPL.
- Strong customer interest in turnkey ASIC and semiconductor solutions.
Sukamal Banerjee – Executive Director and CEO
Onboarding and Early Impressions:
- Spent first 6 weeks visiting 4 continents, meeting 100+ customers and 1000+ employees.
- Customers show deep loyalty and long-term engagement (some up to 30 years).
- Engineering talent and vertical market expertise are strong.
Strategic Focus & Execution:
- Announced temporary suspension of guidance due to macro uncertainty.
- FY26 will focus on building predictability and stability, not rapid expansion.
- Plans to reassess portfolio and focus on digital and AI investment outcomes.
Leadership Expansion & Organizational Updates:
- K. A. Prabhakaran appointed SVP & CTO for DET.
- Sustainability vertical split into 3: Utilities, Energy, Mining & Minerals for more agility.
- New BU for GCCs (Global Capability Centers) created with a dedicated leader.
Talent Reacquisition:
- Former employee Beatrice Lippus rejoined in Germany to lead the energy business.
Execution Roadmap:
- Tactical changes and performance realignments underway.
- Emphasis on client-centric execution, partnerships, and ecosystem building.
- Intends to stabilize performance first before long-term strategic overhaul.
Segment-wise Financials: Digital Engineering and Technology (DET)
| Metric | Q4 FY25 | Q4 FY24 (YoY) Change | FY25 | FY24 | YoY Change |
|---|---|---|---|---|---|
| Revenue (USD) | $170 million | -3.4% (cc) | $687.7 million | N/A | -3.0% (cc) |
| Revenue (INR) | ₹1,472 crores | -1.2% | ₹5,816 crores | ₹5,910 crores (approx.) | -1.6% |
| EBIT Margin | 13.0% | ↓ 48 bps QoQ | 13.5% | 16.1% | ↓ 261 bps |
| PAT | ₹163 crores | ↓ 6% YoY / ↑ 32% QoQ | ₹605 crores | ₹689 crores (approx.) | ↓ 12.2% |
| EPS (DET) | ₹14.81 | – | – | – | – |
| Free Cash Flow (FCF) | ₹215 crores | – | ₹800 crores | ₹755 crores (approx.) | ↑ ₹45 crores |
| FCF to PAT Conversion | 132% | – | – | – | – |
| Cash Position (DET) | $157 million | – | Highest ever | – | – |
| Long-Term Debt | ₹0 | Cleared | Debt-free | – | – |
Group-Level Financials (Including DET, DLM, Others)
| Metric | FY25 | FY24 | YoY Change |
|---|---|---|---|
| Total Revenue (INR) | ₹7,360 crores | ₹7,145 crores (approx.) | ↑ 3% |
| PAT | ₹622 crores | ₹735 crores (approx.) | ↓ 15.4% |
| Free Cash Flow (FCF) | ₹688 crores | ₹650 crores (approx.) | ↑ 6% |
| Dividend (Final) | ₹14 per share | – | – |
| Total Dividend (FY25) | ₹26 per share | – | – |
Question and Answer Session Highlights
How are recent profit warnings from a major aerospace customer and U.S. Airlines due to tariffs and weak travel demand impacting the aerospace sector, specifically the MRO (Maintenance, Repair, and Overhaul) side?
There is currently no significant impact on the aerospace side, especially for MRO. Most MRO-related work is tied to flying hours, which have not declined substantially. Therefore, the impact remains minimal for now.
What is the size and impact of the new green hydrogen deal, and has the project already ramped up?
While the specific size of the green hydrogen deal hasn’t been disclosed, Krishna Bodanapu described it as “meaningful.” It will significantly impact the energy segment of the sustainability vertical. The ramp-up is underway, and the company is already seeing initial revenues, with more expected in the coming quarters.
So in last couple of months due to change in the macro, have you seen any impact on the pipeline? Is it taking more time to close deals? And within the pipeline, which segment are you seeing more traction?
So in terms of has it modified our pipeline or changed our pipeline, the answer would be no.
Because stress also creates an opportunity to create a pipeline of a different nature. But has it
caused or created a pause in decision making? The answer is yes.
Cyient has strong clients and capabilities, but there has been volatility in organic year-on-year growth and a lack of predictability. How is the company addressing this issue?
The management acknowledged the issue and stated that improving predictability and execution is a key area of focus. While building a strong client base and capabilities is more challenging, improving business rhythm in sales and delivery is achievable. Efforts are already underway to enhance stability and predictability in the company’s business outlook.
Krishna, you mentioned March was a negative surprise. Should we expect this to impact the entire first quarter, possibly resulting in flat or declining Q1 performance and making full-year growth challenging?
Krishna Bodanapu confirmed that there will be some impact on Q1, but emphasized it is not significant or long-term. The issue stemmed from a few projects being delayed or put on hold. While there will be a Q1 impact, it’s not considered a crisis. He chose not to comment on full-year growth yet, citing the need for Sukamal to first gain a full understanding of the business and improve forecasting accuracy. Despite forecasting challenges in the past, Krishna remains confident based on client feedback, the sales pipeline, and overall business sentiment.
Can you provide a segment-wise or industry-wise demand outlook entering FY26, especially considering potential supply chain disruptions from tariffs? Will this impact decision-making across sectors?
Sukamal Banerjee noted that certain segments, like healthcare and automotive, have shown strong momentum. While some industries are entering FY26 with positive growth trends, there remains a degree of uncertainty. It’s too early to confirm how this momentum will hold through FY25 into FY26, and more time is needed to provide specific guidance.
Prabhakar, earlier you indicated that margins could reach around 16% by Q4 FY26. Does that expectation still hold given current macroeconomic conditions?
Prabhakar Atla stated that while the cost management framework has been effective, and wage hikes will continue in FY26, they plan to be more prudent with investments. As a result, the margin outlook has been recalibrated. Instead of reaching 16% in the next 12 months as previously expected, the company now aims to achieve and sustain a 15% margin over the next 24 months. This may be adjusted further as future quarters unfold.
The connectivity and new growth areas saw a sharp decline this quarter. Was this due to macro impacts only in March, or were the issues present throughout Q4? Has there been any improvement in the first few weeks of the new quarter?
Sukamal Banerjee explained that the decline was due to broad-based uncertainty, particularly in March. The first 3–4 weeks of the new quarter have shown mixed signals, making it difficult to identify clear trends. Due to this unpredictability, the company has paused providing formal guidance. While demand exists, it is not strong enough to avoid quarter-on-quarter volatility.