Margins up, but growth stalling and guidance deferred to FY28

Delivered ₹2075.7 Cr, +21.3% YoY, +7.7% QoQ

Group constant-currency +9.1% YoY offsets DET weakness via semiconductor and FX tailwinds

Group EBIT 9.7% up 16 bps QoQ, 19 bps YoY; DET segregated higher but dragged by semiconductor losses

Group delivered ₹108.7 Cr PAT; YoY -30.9% despite revenue +21.3% indicates margin compression and one-off headwind

Deferred to H1 FY28 due to lagging revenue ramp; guidance cut by ~6 months

Order intake growth muted at 5.3% YoY; strong growth in new business (64%) offset by project ramp-downs and discretionary delays

Originally Q4 FY27, now H1 FY28. Revenue ramp lagging; cost side on track. Margin expansion stretched across 6 more months.

Prior guidance 'mid- to high single-digit organic growth' now characterized as 'challenged' if H1 starts negative. Management expects 'meaningful growth H2' but without numbers—implicit downgrade.

Strategic Units segment -8.2% QoQ driven by energy ramp-down completion. Will take 1–2 quarters to stabilize; multi-year large project ended.

Late Q2 close expected, adds lifecycle/AI capabilities; ₹40–50 Cr revenue accretion from Q3 onwards. No material impact on FY27 earnings.

Krishna: 'breakeven in FY28'; prior guidance implied earlier timeline. Kinetic amortization (~$3M/quarter) cited as drag; high-power ASSP R&D ongoing.

One or two more quarters of softness expected; ramp-down from large project now complete. Team restructured, service portfolio broadened; confident of turnaround in 2–3 quarters.

Broad-based: growth in all three subsegments (aerospace, rail, automotive); double-digit YoY in each. Holistic momentum, not project-dependent.

Breakeven in FY28. High gross margins; high-power ASSP R&D will consume cash for 4–5 more quarters. Kinetic amortization ~$3M/quarter added drag.

Prior strong numbers built on one large project, now complete. We've restructured go-to-market, reprioritized service portfolio, broadened offerings (e.g., digitalization of service parts catalog). Expect comparable results in 2–3 quarters.

Growth will build slowly. Negative headwind largely behind, but ask rate for rest of year is hard given slow H1 start. Hopeful of meaningful growth in H2.

Couple of quarters into next year (H1 FY28). Cost levers in control; growth absorption is the lag. Conscious decision not to cut investments needed for turnaround.

Wage hike decision taken in H2 based on market forces. Not currently factored into FY28 roadmap.

No formal guidance. Were aiming mid- to high single-digit; now 'challenged' mathematically if H1 is flat/negative. TAO will add $40–50M post-close.

Not prudent to discuss before closing. Awaiting updated financials as closing deliverable. Will confirm on close.

Kinetic: Singapore debt ~1.25% + spread, <3% total. TAO: USD SOFR + spread, also low vs cost of capital. Both cheaper than India-based debt.

Existing programs and budgeted work unaffected so far. But if West Asia disruption continues, flying hours will compress and revenue affected. Only seen in discretionary projects, not core business yet.

Fiber build-out capex by customers remains strong. Some seasonality around fiscal years. Celfinet diversification into connectivity helping offset seasonality.

No plans for demerger. Synergies between DLM and Cyient engineering remain valuable. Current structure provides value unlock avenue; will continue as-is.

Connectivity ramp-up largely complete. Other macro delays (West Asia-driven discretionary projects) still persisting across segments.

Management now characterizes original target as 'challenged' given H1 flat/negative start. Hoping for 'meaningful growth H2' but no numbers committed.

Cost side on track; growth absorption lagging. Need revenue ramp-up + margin expansion across 2+ quarters. TAO integration and lifecycle deals expected to drive this.

Q1 at 29.2% inflated by profit mix shift to higher-tax jurisdictions and prior-year true-ups. Management expects normalization.

Q1 higher than expected; expect moderation as project ramps stabilize. Management conscious of not cutting strategic investments.

DET constant-currency growth -0.9% YoY despite +21.3% reported (FX-aided). Indicates underlying demand for services stalling. If macro headwinds (geopolitical, discretionary project delays) persist beyond H2, miss FY27 mid- to high single-digit target.

15% EBIT margin target deferred from Q4 FY27 to H1 FY28 (6+ month push). Signals revenue-side gap vs cost optimization. If growth does not materialize in H2, risk further slippage into FY28.

Energy segment driven by one large project, now completed. Ramp-down ongoing; peers winning energy deals while Cyient lost momentum. 1–2 quarters to stabilize; no guarantee of full recovery.

West Asia war and supply-chain disruptions causing customer caution on discretionary projects and new program awards. Affects aerospace (flying hours), telecom (capex timing), energy (conservation). Only core programs budgeted survive.

Delivered PAT -30.9% YoY despite +21.3% revenue. Q1 FY26 benefited from one-off reinstatement gains; effective tax rate jumped 350 bps YoY (profit mix shift to higher-tax jurisdictions). Indicates underlying margin compression and tax headwind.

Semiconductor business targeting breakeven only in FY28, not earlier. High-power ASSP R&D will consume cash for 4–5 quarters. Kinetic amortization ~$3M/quarter added drag. If design wins don't convert to revenue on schedule, breakeven slips further.

TAO close expected late Q2; ₹40–50 Cr annualized revenue expected but pre-close margin assumptions (prior EBITDA ~20%) not confirmed. Macro headwinds may have eroded TAO's own margins post-H1 CY26. Integration execution risk with new software/AI capabilities.