Commenting on the results, Krishna Bodanapu, Managing Director and Chief Executive Officer, said“Financial performance in Q1 FY 16 was in line with expectations. Growth was muted in the services business and revenues were lower than expected in Rangsons. This was expected especially considering the seasonality in Softential & Rangsons. Business pipeline continues to remain strong and we are confident that revenue momentum will accelerate from Q2 onwards.
In Q1 we executed salary increases across the organization. Our salary increases have been in line with the industry and peer companies. Anticipating this headwind we took a number of initiatives around utilization and pyramid correction, resulting in 33 bps improvement in margins despite the headwinds. This puts us in a good position to improve margins over the next few quarters. This also gives us confidence to deliver margins better than last year.
Rangsons integration is going as per plan and we continue to see significant traction for the combined offering. Three leading OEMs qualified us for electronic manufacturing and system integration. While there was a push out on revenue in Q1 for Rangsons, the order & pipeline is strong and we continue to build on this.
Mr. Ajay Aggarwal, Chief Financial Officer, said “We were able to improve Operating margins during the quarter despite wage hike with operational improvements and this momentum on margin improvement continue to be the focus area during the year.
Our Free Cash Flow (FCF) to EBIDTA for Cyient for the quarter stands at 39.1% and will further improve during the year based on our strategy of DSO management, capex optimization and deployment of new business in special economic zones to improve tax position.
We are on track in integrating Rangsons. We will continue focusing on growth, improvement in operating margin and cash generation and thus providing better investor returns.
Financial Performance Highlights
In RsMillion
30 June
|
31 March
|
30 June
|
Growth %
| ||
2015
|
2015
|
2014
|
QoQ
|
YoY
| |
Revenue
|
7,262.9
|
7,300.3
|
6,217.0
|
(0.5%)
|
16.8%
|
Operating Profit
|
918.0
|
898.7
|
876.8
|
2.2%
|
4.7%
|
Operating Margin
|
12.6%
|
12.3%
|
14.1%
| ||
PAT
|
748.1
|
938.3
|
685.1
|
(20.3%)
|
9.2%
|
In USD Million
30 June
|
31 March
|
30 June
|
Growth %
| ||
2015
|
2015
|
2014
|
QoQ
|
YoY
| |
Revenue
|
114.3
|
117.4
|
104.0
|
(2.6%)
|
9.9%
|
Operating Profit
|
14.4
|
14.4
|
14.7
|
0.0%
|
(1.5%)
|
Operating Margin
|
12.6%
|
12.3%
|
14.1%
| ||
PAT
|
11.8
|
15.1
|
11.5
|
(21.9%)
|
2.8%
|
Exchange Rate (USD/INR)
30 June
|
31 March
|
30 June
| |
2015
|
2015
|
2014
| |
Quarter Average
|
63.54
|
62.20
|
59.80
|
Quarter Closing
|
63.75
|
62.59
|
60.09
|
Quarterly Revenue Growth - Constant Currency
Operating Units
· Engineering (ENGG) revenue up by 1.7% QoQ
· Data Transformation, Network and Operations (DNO) revenue is down 2.5% QoQ including Softential
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