Debasis Mohapatra
Bengaluru, 2 November 2024
Engineering services firm, Cyient is eyeing an increased market share in the Middle East region after its formation of a dedicated entity focussing on this region.
In a customary post earnings conference call, the company’s management has said that its sustainability vertical is likely to better revenue growth post formation of such unit.
“To focus on Sustainability has highlighted a transformation in the energy sector, in line with building further on our expertise in the energy business and on expanding our global footprint. We have set up a dedicated entity in the United Arab Emirates to cater to the Middle East region, which, as you know, is the world’s largest energy market. To accelerate this initiative, we have reached an agreement to acquire Abu Dhabi & Gulf Computer Establishment, ADGCE, an Abu Dhabi-based technology consulting and digital services provider primarily catering to the energy sector. This strategic move will further strengthen our presence in UAE and help Cyient access one of the largest markets for the energy business,” Krishna Bodanapu, Executive VC & MD of Cyient has said during the analyst call.
Sustainability is a growing segment in the engineering services industry and all ER&D firms are betting big on this segment through acquisitions or capacity building through organically.
After reporting an inline performance in the second quarter, the company hopes for a better second half of current financial year.
“It was expected that Q1, Q2, were going to be a little bit weaker. The H1 was going to be a little bit weaker. H2 is going to be much stronger, but also in H2, as I think pointed out that Q3 is seasonally weak. But having said that, I think that’s where some of the project nature of the business action kicks in because it’s not really furloughs or closures that impact. The work is already there and it’s really about the execution. Last year also, we had a fairly strong Q3. So, taking all that into account, the growth outlook stays,” Bodanapu has said.
In Q2FY25, Cyient reported a sound performance as the company’s Digital, Engineering, and Technology (DET) business revenue was driven by good growth in aerospace, connectivity, and new growth areas.
While its transformation vertical reported 3.4% sequential growth in constant currency term, the connectivity segment witnessed 3.9% rise during the second quarter of FY25.
New growth areas vertical saw the maximum sequential growth of 9.7%. However, sustainability reported a degrowth of 6.4%. The order intake of Cyient’s DET business stood at $156.8 million.
