Third quarter remains silent in the West for Cyient: Ajay Aggarwal, CFO

Ajay Aggarwal, President and CFO, Cyient Limited, during an interview with Swati Khandelwal spoke about the quarterly numbers of the company, performance of the sector and acquisition plans among others. Edited Excerpts: 

Q: Sequential decline is visible in the quarterly numbers of the company. What can be the reason for that fall? Also, did the pay hike taken in the quarter had an impact on the margins?
A: The last quarter was a one-off for us, Cyient. Less number of working days are available in the west during the third quarter and that is a reason that our business remained flat on the service front and there marginal fall on the manufacturing front. It is a one-off. But, good growth can be seen in the fourth quarter and we will be meeting our annual targets. 

When it comes to its impact on margin then you will find that there is an improvement in the margins despite muted growth in the quarter. Our margins will also improve in the fourth quarter too. In fact, we will be able to maintain the margin guidance of the year. 

Q: What is your guidance for the overall sector in terms of the performance of the IT sector? Do you think that things will improve from here onwards and the worst is behind it? What is your outlook on the business performance of the utility and manufacturing segment?
A: As far as, Cyient is concerned, we work on specialised engineering services and network. Aerospace, rail transport, medical and semi-conductors comes under the ambit of engineering services that are provided by us. When it comes to network than we provide solutions related to utilities, communication and GIS. 

Apart from this, the combination of three things that is available in our portfolio will be better in the financial year (FY) 2019-20 when compared to FY 2018-19. They are: 

1. The first thing is related to our big vertical, like Aerospace and Communication, that reported small growth in this fiscal will perform better in the coming years. 
2. Acquisitions: Acquisitions that we made in the last few years will pay off in the next fiscal. 
3. New Business/initiatives: We have started some new businesses and initiatives, named New Business Accelerator, where we are spending a lot to accelerate the growth in product development. In addition, we have started working in CSS, which will also benefit us. 

So, when it comes to Cyient than we can see that FY20 will be better than FY19. And, the same goes in case of other companies, as the existing atmosphere suggests that FY20 will be better than FY19 for them too. 

Watch this Zee Business video

Q: What is Cash Situation after the Buyback? Do you have any acquisition plan in the recent future?
A: See, we have a strong cash situation even after the buyback and cash above Rs1,000 crore is available with us, at present. In fact, we had cash of around Rs1,250 crores of which around Rs200 crore was invested in the buyback. Apart from this, we have earlier said that we have investment plans and good acquisitions are in pipeline and you may see some activities of the front in the recent future. 

(Transcribed by Jitesh Kumar Jha)