For the year Cyient delivered strong performance. Revenue grew 24.3% in constant currency; Net profit increased 32.8% which also translated to an increase of 32% in earnings per share (EPS). Free cash flow increased by 35.8% to INR 296.8 Cr. Available cash stands at INR 656.5 Cr. This is after a number of long term investments including three acquisitions during the course of the year – Softential, Invati Insights and Rangsons Electronics.
During Q4, we also closed the acquisition of majority of equity (74%) of Rangsons Electronics. In keeping with our stated strategy of addressing the entire product lifecycle needs of our customers, we have articulated a strong value proposition combining Cyient’s engineering capability with Rangson’s product realization capability. This value proposition is well received by our clients and the market, and we are bidding on a number of projects. We believe we will see significant synergy revenue this year.
While Q4 was a muted quarter, pipeline and backlog remain very strong. Traction from existing clients remains strong and we continue to see good wins. While there will be some headwind in Q1 margin due to salary increases, this will be significantly less than previous years due to actions such as a higher percentage of offshore revenue, better utilization and cost control. Focus on margin improvement and operational efficiency is the biggest focus for the year and the management team is committed to meet these objectives.”
Ajay Aggarwal, Chief Financial Officer, said that “Robust improvement in all financial metrics continued for the third straight year. Our net profit grew by ~33% over last year, aided by ~450 bps improvement in tax rate and favorable other income. The company’s commitment to adherence to stable Fx management policies in volatile times has paid off in the year.
Our Free Cash Flow (FCF) generation continued to be strong and we generated `297 Crore of business free cash flow in FY’15 which is ~36% higher than last year. FCF stands at ~57% as a percentage of Operating Profit on full year basis. This was also driven by initiatives focus on improving our collection cycle which helped us to achieve our lowest ever Billed DSO of 63 days
Current business environment requires us to remain efficient and invest in growth. We continue to focus on optimizing our cost structure, prudent SEZ deployment strategy, better working capital management and improving cash generation to give better investor returns in coming years.
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