Coforge, Cyient outliers amid weak quarter for tech services
NEW DELHI : Mid-cap information technology (IT) service providers, Cofo-rge and Cyient Group, proved outliers in their September quarter earnings filed at the BSE on Thursday. While bellwether large-caps, as well as mid-cap firms such as Larsen & Toubro Technology Services (LTTS), Persistent Systems and Zensar Technologies, largely offered bleak September quarter figures and cautious commentary for the rest of this fiscal, both Coforge and Cyient group outperformed peers in maintaining operating margin and profitability—despite macroeconomic headwinds. Cyient reported September quarter revenue of $214.9 million for the entire group—up 4.6% sequentially and 22.3% year-on-year (YoY) in constant currency.
Operating margin for the group also expanded—up 40 basis points (bps) to 16.5% for the quarter. Net profit also rose by 1.5% sequentially to ₹172.8 crore—which the company hierarchy attributed to strong growth in automotive, sustainability and transportation verticals. Coforge, meanwhile, reported 2.3% sequential growth in its dollar revenue—up to $278.1 million for the September quarter.
Consolidated profit for the quarter rose 9.5% sequentially—up to ₹181 crore in the quarter. More importantly, Coforge and Cyient retained their guidances and targets for FY24. Sudhir Singh, chief executive of Coforge, said in a press statement that the company will retain its FY24 revenue growth guidance of 13-16%, as well as its 50bps margin expansion target.
The midcap firms outperformed their larger peers by a substantial margin. Tata Consultancy Services (TCS), India’s largest IT services firm, missed Street estimates in reporting a 0.3% sequential revenue drop. Infosys and HCL Technologies, meanwhile, slashed their revenue growth
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