Cyient reported 25.5% year-on-year revenue growth and a record second-quarter order intake, but organic growth in its core digital, engineering and technology business remained subdued as wage increases loom.
Cyient Limited said its second quarter performance was lifted by stronger demand across its engineering and digital services portfolio, with consolidated revenue rising 25.5% year on year to ₹2,235 crore and EBIT margin improving to 14.2%, the highest level in 10 quarters. The Hyderabad-based company also reported free cash flow of ₹214 crore, implying a conversion rate of about 140% of profit after tax, and declared an interim dividend of ₹12 per share for FY2027.
According to the company’s earnings call and related results disclosures, the headline numbers masked a more subdued underlying trend in the core Digital, Engineering and Technology business, where organic revenue advanced just 1.6% sequentially and 0.4% year on year in constant currency. Cyient said the division’s revenue reached $174.2 million, while its order intake hit a record second-quarter level of $158.4 million, up nearly 21% from a year earlier. The company described the quarter as a mix of improving deal conversion, a better-than-expected rebound in deferred customer work and continued momentum in transport and mobility, which posted a sixth straight quarter of growth.
The operating performance was helped by better utilisation and cost discipline, even as management flagged wage increases in the second half of the year as a margin headwind. Shrinivas Kulkarni, the chief financial officer, said on the earnings call that the salary hikes would be rolled out in two stages over the third and fourth quarters, but added that the company’s cost-optimisation programme should help preserve margins at current levels. The effective tax rate came in at 28.3%, and the company said it expects a similar rate for the remainder of the year.
The semiconductor business continued to expand, with revenue rising 8% quarter on quarter to $19.3 million, its sixth consecutive quarter of sequential growth. Cyient said custom ASIC order intake climbed more than 50% from the previous quarter and that the pipeline in that unit exceeds $100 million. Even so, executives said the segment remains in the red because of heavy research and development investment, and Krishna Bodanapu, executive vice-chairman and managing director, indicated that break-even is still targeted for FY2028, although supply constraints could delay that by a quarter or two. The company also said the low-voltage chips acquired through Kinetic are already available, while a high-voltage chip is expected to tape out early next year.
Cyient DLM, the group’s electronics manufacturing arm, also delivered solid growth, reporting revenue of ₹393.1 crore and an all-time high order book of ₹2,813.7 crore, according to separate company updates. The business posted a book-to-bill ratio above 1.6 times, although margins softened as the company increased spending on sales, marketing and product development. More broadly, Cyient said its second-quarter order wins were supported by stronger traction in aerospace, automotive and data-led digital services, while Tao Digital, the recent acquisition, contributed $9.6 million in revenue for the month it was consolidated and is expected to scale further as Cyient spreads its data-engineering capabilities across existing accounts.
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