Cyient Q3 net profit up 17.6 pc to Rs 108.3 cr

New Delhi, Jan 16 () IT firm Cyient on Thursday reported a 17.6 per cent rise in net profit at Rs 108.3 crore for the December 2019 quarter.

The Hyderabad-based company had posted a net profit of Rs 92.1 crore in October-December quarter a year ago, Cyient said in a statement.

Its revenue, however, decreased 6.9 per cent to Rs 1,106 crore for the period under review as against Rs 1,187.6 crore in the third quarter (Q3) of 2018-19.

"PAT increased by about 10 per cent quarter-on-quarter, primarily on account of higher other income," it said.

In dollar terms, net profit rose 18.6 per cent to USD 15.2 million, while revenue was lower by 6 per cent at USD 155.2 million in the said quarter year-on-year.

Cyient MD and CEO Krishna Bodanapu said the third quarter is generally slow.

"As part of this agreement (with one of our key clients), we have provided a one-time discount in Q3. This agreement will accelerate our growth in the coming years and since the cumulative impact was taken in Q3 it has resulted in a de-growth," he added.

He added that for 2019-20 financial year, the company expects "a slight de-growth driven by decline in key clients across communications and aerospace business units".

Cyient had a total headcount of 14,472 people at the end of December 2019 quarter with voluntary attrition at 19.7 per cent.

The company also talked about a RSU scheme in lieu of variable pay for senior associates.

It said the scheme is designed to encourage senior associates (about 100) to participate in company's growth with a longer term horizon.

"It is based on the associates' participation in the scheme in lieu of existing variable compensation outflows. Maximum participation is capped at 25 per cent of variable pay in the first year and 50 per cent from the second year," it added.

To encourage participation, Cyient will top up the associates' contribution by 25 per cent of the value contributed, which vests over 3 years. The additional P&L (profit and loss) impact due to this is negligible, it noted.

"This scheme will result in enhanced leadership buy-in and alignment to company's medium term results with minimal dilution of equity for existing shareholders and aligns the goals of the associates to the shareholders interest," Cyient said. SR RVK