These are turbulent times for the Indian IT sector. Apart from the uncertainty on the US regulatory front and an appreciating rupee, the Indian IT industry itself is seeing a structural change with newer technologies like cloud and automation that is cannibalising traditional IT services. With clients shifting their tech spend to newer areas like digital and IoT, there is a need for newer skill sets that existing employees don’t always have. Amidst all the turmoil with slower growth and unprecedented lay-offs in the industry, having a differentiated business model with a strategic relationship with clients does put a company in an enviable position. Finding itself in that position is Hyderabad based mid-cap company, Cyient.
What makes Cyient so different? For one, the company provides engineering services, coupled with niche offerings in the communication and the GIS segment, which are relatively immune from the problems plaguing the IT industry. “Structural changes are impacting services, like Application Development and Maintenance (ADM), infrastructure management and testing, where Cyient does not have presence. So it is least impacted by these structural changes,” says Amit Chandra, research analyst, HDFC Securities.
Engineering services encompass the entire product development cycle, including design, development, testing, rollout and maintenance. India’s engineering services market is expected to grow at an average of around 14% every year till 2020 to reach $38 billion — faster than the traditional Indian IT and BPO services driven by shortening product life cycles — according to technology research firm Zinnov. Cyient is among the few Indian companies with such a huge exposure to engineering services (61% revenue).
The company has made several strategic changes over the past three years including expansion of its service offerings through acquisitions, aligning services to industry verticals for better focus and venturing into design-led manufacturing. Its business is divided into seven verticals — the top three being aerospace & defence, communications and utilities & geospatial. (See: Balancing act)
Krishna Bodanapu, who took over as the CEO of Cyient three years ag