The company said its consolidated net profit fell to 918 million rupees ($10.02 million) for the quarter, down from 1.22 billion rupees a year earlier. The decline was primarily driven by a 420 million rupee charge incurred to comply with the new labour regulations, which came into effect in November and weighed heavily on its bottom line.
India’s revised labour codes—considered the most significant overhaul of worker laws in decades—have had a broad impact across manpower-intensive sectors, particularly information technology and engineering services. Several major IT firms, including Wipro, Tata Consultancy Services, Infosys, and HCLTech, have also reported profit pressures linked to the new rules.
Cyient’s performance was further affected by a softer operating environment. Revenue from its Digital, Engineering and Technology (DET) segment, which accounts for about 75% of total revenue, slipped 0.7%. The company attributed the decline to a “fluid macroeconomic environment” and a typically weak third quarter due to client furloughs.
Overall, total revenue declined 1.6% to 18.79 billion rupees during the period. Cyient also recorded an additional 80 million rupees in charges related to mergers and acquisitions expenses tied to the spin-off of its semiconductor unit.
The earnings report came amid signs of broader economic softness. Central bank estimates released on Thursday showed that India’s gross domestic product contracted 0.3% in the fourth quarter compared with the previous three months.
Cyient’s results mirror a wider trend in the sector. Peer firm Tata Elxsi also reported a profit decline for the December quarter last week, citing similar charges linked to the new labour codes.
The latest figures underline the near-term financial strain facing Indian IT and engineering firms as they adjust to regulatory changes and navigate a challenging macroeconomic backdrop.