Cyient share price hit a lower circuit twice and nosedived more than 20% to Rs 1,397.05 after the Q3 net profit fell almost 32%.
The scrip hit the first lower circuit of Rs 1,579.75 at 9.16 am, the trading resumed after 10 minutes. The second lower circuit was hit around 9.31 am at Rs 1,491.95 again the trading was halted for another 10 minutes.
Here are 4 reasons why the Cyient’s share price saw a big dent today, January 24
Dip in Q3 net profit and cut in revenue guidance
The net profit of Cyient fell 31.7% year-on-year in Q3 FY25 to Rs 122.3 crore against Rs 179 crore in Q3 FY24. The revenue from operations for the reporting quarter rose 4.2% to Rs 1,926.4 crore, compared to Rs 1,849 crore in the September quarter. “For FY25, we expect DET revenue degrowth to be in the range of 2.7% YoY in constant currency terms,” said the company.
Resignation of CEO
The company’s outgoing chief executive officer Karthikeyan Nataraj resigned on January 23. “This is to inform you that Mr. Karthikeyan Natarajan, has resigned as Executive Director and Chief Executive Officer of the Company on 23 January 2025. The said resignation was noted by the Board of Directors,” read an exchange filing.
Sell call from Motilal Oswal
The brokerage firm, Motilal Oswal Financial Services, downgraded the stock to a ‘Sell’ rating as it expects a weak fourth quarter and seasonally weak first half could lead to lower revenue growth for FY26. Also, the company’s margins could be impacted in a similar vein. It has a target price of Rs 1,350 on Cyient, implying a downside of 23%. The brokerage firm slashed its estimates by 13% for FY25, FY26, and FY27. The reason behind the cut in estimates was based on uncertainties in key growth areas like sustainability and aerospace. Along with this, the company’s FY25 downgrade in guidance.
Nuvama cuts estimates
The brokerage firm, Nuvama Institutional Equities, cut the target price to Rs 1,660 from Rs 1,700 while maintaining the ‘Hold’ rating on the stock. It also cut the earnings per share estimates sharply by 10.8% for FY25 and 4.5% for FY26 on lower growth and margins. “We are updating FY26E/27E USDINR assumption to 86.5 and rolling over to 20x FY27E PE,” said Nuvama in a research note.
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