Looking for a profitable fast-growing stock? Look at Cyient
01-05-2014 • About Cyient (
$CYIENT) • By InTwits
Cyient is an attractive growth stock in IT Consulting & Software industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Cyient showed fast growth in the last financial year. Cyient's revenue surged on 17.8% in FY2014. At the same time Cyient well managed its profitability and showed even faster growth in EBITDA of 19.9% for the same period.
In the longer period the company showed fast revenue growth of 22.9% from FY2011 to FY2014 annually. EBITDA surged on 31.7% from FY2011 to FY2014 annually.
Cyient ($CYIENT) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 31,836 | 11,880 | 15,530 | 18,731 | 22,064 |
|---|
| Revenue growth, % | | -62.7% | 30.7% | 20.6% | 17.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 2,091 | 1,799 | 2,691 | 3,424 | 4,104 |
|---|
| EBITDA growth, % | | -14.0% | 49.6% | 27.2% | 19.9% |
|---|
| EBITDA margin, % | 6.57% | 15.1% | 17.3% | 18.3% | 18.6% |
|---|
| Net Income | 1,709 | 1,397 | 1,614 | 2,311 | 2,660 |
|---|
| Net Income margin, % | 5.37% | 11.8% | 10.4% | 12.3% | 12.1% |
|---|
| |
| CAPEX | 351 | 648 | 804 | 722 | 766 |
|---|
| CAPEX/Revenue, % | 1.10% | 5.45% | 5.18% | 3.85% | 3.47% |
|---|
| Debt | 44 | 13 | 34 | 3 | 58 |
|---|
| Cash | 854 | 1,296 | 4,442 | 4,827 | 6,763 |
|---|
| Net Debt/EBITDA | -0.4x | -0.7x | -1.6x | -1.4x | -1.6x |
|---|
| |
| ROIC, % | 18.6% | 13.1% | 19.8% | 22.2% | 22.9% |
|---|
| ROE, % | 20.4% | 14.4% | 14.8% | 18.6% | 18.3% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. EBITDA margin increased slightly on 0.300 pp from 18.3% to 18.6% in FY2014. In the longer period the company showed fast EBITDA margin growth of 3.50 pp from 15.1% in FY2011 to 18.6% in FY2014.
We call Cyient an attractive growth stock as together with the growth it delivers high ROIC at 22.9%. Three years ago it was lower at 13.1%. It's average level of ROIC for the last three years was 21.6%.
Net Income margin decreased slightly on 0.200 pp from 12.3% to 12.1% in FY2014. In the longer period Cyient's Net Income margin increased slightly on 0.300 pp from 11.8% in FY2011 to 12.1% in FY2014.
Cyient operates at ROE of 18.3%. It's average ROE for the last three years was 17.2%.
Capital expenditures (CAPEX)
In FY2014 Cyient had CAPEX/Revenue of 3.47%. Cyient's CAPEX/Revenue dropped on 1.98 pp from 5.45% in FY2011 to 3.47% in FY2014. It's average CAPEX/Revenue for the last three years was 4.17%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -1.6x Net Debt/EBITDA. In the longer period Cyient showed fast leverage growth of 0.92x from -0.71x in FY2011 to -1.63x in FY2014.
Peers in IT Consulting & Software
Below we provide Cyient benchmarking against other companies in IT Consulting & Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tata Consultancy Services ($TCS) | | 24.3% | 31.0% | 28.8% | 29.9% |
| Mindtree ($MINDTREE) | | -65.0% | 26.6% | 23.2% | 28.8% |
| Infosys ($INFY) | | 20.9% | 22.7% | 19.6% | 24.2% |
| Sqs India Bfsi ($SQSBFSI) | | -66.5% | 46.4% | 32.9% | 20.4% |
| Wipro ($WIPRO) | | -56.9% | 19.8% | 0.6% | 16.0% |
| |
|---|
| Median (6 companies) | | -60.9% | 28.8% | 26.0% | 22.3% |
|---|
| Cyient ($CYIENT) | | -62.7% | 30.7% | 20.6% | 17.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Tata Consultancy Services ($TCS) | | | | | 47.4% |
| Infosys ($INFY) | 42.7% | 45.3% | 41.3% | 98.1% | 35.9% |
| Wipro ($WIPRO) | 31.8% | 31.5% | 29.2% | 30.4% | 32.0% |
| |
|---|
| Median (3 companies) | 37.3% | 32.8% | 31.5% | 36.2% | 35.9% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tata Consultancy Services ($TCS) | 29.0% | 29.9% | 29.5% | 28.6% | 30.7% |
| Infosys ($INFY) | 34.4% | 32.5% | 31.6% | 27.9% | 26.3% |
| Wipro ($WIPRO) | 8.3% | 21.1% | 19.1% | 20.9% | 22.4% |
| Mindtree ($MINDTREE) | 5.8% | 11.8% | 15.1% | 19.8% | 20.6% |
| Sqs India Bfsi ($SQSBFSI) | 3.9% | 3.4% | 10.6% | 18.8% | 20.5% |
| |
|---|
| Median (6 companies) | 7.0% | 20.3% | 17.2% | 20.3% | 21.5% |
|---|
| Cyient ($CYIENT) | 6.6% | 15.1% | 17.3% | 18.3% | 18.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Infosys ($INFY) | 3.7% | 4.7% | 4.9% | 5.2% | 5.5% |
| Mindtree ($MINDTREE) | 1.1% | 5.6% | 2.5% | 4.5% | 5.0% |
| Cmc ($CMC) | 0.9% | 9.2% | 8.1% | 4.4% | 4.0% |
| Tata Consultancy Services ($TCS) | 3.5% | 4.9% | 4.1% | 4.2% | 3.8% |
| Wipro ($WIPRO) | 1.5% | 3.9% | 3.5% | 2.8% | 2.1% |
| |
|---|
| Median (6 companies) | 1.3% | 5.2% | 3.8% | 4.5% | 3.9% |
|---|
| Cyient ($CYIENT) | 1.1% | 5.5% | 5.2% | 3.9% | 3.5% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tata Consultancy Services ($TCS) | 44.7% | 47.1% | 48.6% | 48.4% | 50.2% |
| Mindtree ($MINDTREE) | 26.4% | 14.9% | 24.9% | 34.6% | 36.2% |
| Cmc ($CMC) | 32.0% | 31.5% | 26.2% | 33.2% | 35.3% |
| Sqs India Bfsi ($SQSBFSI) | 14.0% | 0.1% | 12.1% | 27.0% | 29.4% |
| Infosys ($INFY) | 32.2% | 32.1% | 32.4% | 28.3% | 27.2% |
| |
|---|
| Median (6 companies) | 29.2% | 26.4% | 25.6% | 30.8% | 32.3% |
|---|
| Cyient ($CYIENT) | 18.6% | 13.1% | 19.8% | 22.2% | 22.9% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Mindtree ($MINDTREE) | -0.1x | -0.1x | -0.0x | -0.2x | -0.2x |
| Cmc ($CMC) | -0.1x | -0.2x | -0.2x | -0.4x | -0.3x |
| Tata Consultancy Services ($TCS) | -0.5x | -0.4x | -0.4x | -0.4x | -0.6x |
| Wipro ($WIPRO) | -0.0x | -0.1x | -0.3x | -0.3x | -0.6x |
| Sqs India Bfsi ($SQSBFSI) | -3.3x | -8.4x | -1.8x | -0.5x | -0.7x |
| |
|---|
| Median (6 companies) | -0.3x | -0.3x | -0.3x | -0.4x | -0.6x |
|---|
| Cyient ($CYIENT) | -0.4x | -0.7x | -1.6x | -1.4x | -1.6x |
