Sales growth 5Yr > Profit growth 5yr
Sales growth 3Yr > Profit growth 3yr
I doubt companies where Sales growth is higher than Profit growth over longer periods.
Let's quickly glance at some other data of #Cyient .
Revenue is lower than last yr.
EPS, OPM%, NPM% has declined substantially from last Yr.
Fin Trend is -ive
High Dividend Yield 5.44%
No Solvency Issue
Stock Dilution 20.37% in last 12 yrs. I am not a fan of this. Retail shareholders are at loosing end.
Institution Holding is High 64.25%. Basically stock in at their mercy.
For last 3yrs FII has been reducing their stake same time DII has been increasing
Net Profit 2789Cr
So 700+ Cr gap (33% of CFO)? It raised my doubt further. Need more investigation.
Looks like it is in Other Income - Investment in MF & FDs
Working capital is deteriorating.
This is Not common for IT services company as they are asset-light business.
FY2019 machinery repair was 86.8 Cr. On Fixed asset base of 274 Cr this feels Very High.
Softential (-3cr asset) negative asset acquired in 150Cr in Apr 2014. Why loss making company at such premium?
Rangson now DLM (37 Cr asset) acquired in 292 Cr in Feb 2015. Why 37cr asset in 292 Cr?
Despite 5 Yr after DLM acquisition, it is still loss making
#Cyient has reported large profits as well as losses due to derivative contracts.
It plays with Risky Derivative contracts that's not expertise of IT services company.
Good times profit but when tide turns could lead to huge losses.
Delay in depositing undisputed dues including PF, Tax, Employees State Insurance, IEPF, Sales Tax, Wealth Tax, Works Contract Tax, Service Tax, Custom Duty etc in FY2012, FY2013, FY2014 ?
Compliance needs improvement, especially when it is undisputed.
ICRA- Avoidance of Interlinkage in Boards – One of the executive directors of Cyient is a member of a Board and audit committee of a company where an independent director of Cyient is a promoter. This could result in conflict of interest..
In July 2019 management admitted - Losing revenue from its biggest customers & Lagging behind in new-age technologies (Virtual reality,analytics, Augmented Reality, IoT etc)
Boeing is it's client & we all know what's going on there.
Probably why we are seeing steady Tax% increase from 15% (Mar2019) to 46% (Mar2020).
This will further adversely impact its Margin in future.
Short term hope & speculation can make price movement either direction
FII & DII are in strong position to make it move
Long-term chose wisely
I rest my points here. Please add anything if you know or I missed.