CYIENT

Q2FY26 Summary & Strategic Outlook

Gradual recovery underway amid macro headwinds 🔹 **Quarterly Performance Snapshot** - Group revenue rose 4% QoQ; DET segment grew 4.5% YoY. - DET EBIT margin improved 16 bps sequentially to 12.2%, aided by cost controls. - Semiconductor segment rebounded with 12% QoQ growth, though EBIT remained negative due to R&D and sales investments. 🔹 **Segment Trends** - Transportation & Mobility grew 3.9% QoQ; Networks & Infrastructure up 3.6%. - Strategic Units declined 7.2% due to European holiday season and programme ramp-down. - DET shows early signs of stabilisation despite broader demand uncertainty. 🔹 **Deal Pipeline & Wins** - Secured major AI Center of Excellence project for a healthcare client. - Won digital transformation deal for aircraft OEM, displacing a Tier-1 IT competitor. - Qualified deal pipeline expanded ~10% QoQ, with traction in aerospace, utilities, and semiconductors. 🔹 **AI Strategy** - Adopts a domain-first approach, integrating AI into engineering-led transformation. - Leverages deep data and tech expertise to solve complex client challenges. 🔹 **Outlook & Guidance** - No formal FY26 guidance; management views this phase as business stabilisation. - H2FY26 expected to outperform H1, driven by ramp-ups in aerospace, utilities, and communications. - Targeting 15% EBIT margin by Q4FY27; semiconductor EBIT neutrality also expected by FY27. 🔹 **Valuation & Investment View** - Stock trades at ₹1,185.6 with a market cap of ₹13,166 crore. - Cautious outlook maintained due to uneven growth and margin scaling challenges. - Improving deal activity and strategic focus offer long-term potential, but near-term momentum remains mixed.