Jan 22 (Reuters) – India’s Cyient reported a 24.9% fall in third-quarter profit on Thursday due to a one-time charge from the country’s new revised labour codes.
The engineering, research and development (ER&D) firm’s consolidated net profit fell to 918 million rupees ($10.02 million) from 1.22 billion rupees last year.
The company incurred charges of 420 million rupees to comply with new labour codes implemented in November, denting its bottomline.
India’s new codes – the country’s biggest overhaul of workers’ laws in decades – have dragged the profit of firms in India’s manpower-heavy IT sector, including that of Wipro (WIPR.NS), TCS, Infosys and HCLTech (HCLT.NS).
Revenue in its digital, engineering and technology (DET) segment, which accounts for around 75% of overall revenue, fell 0.7%, which the company attributed to “a fluid macroeconomic environment and a typically soft third quarter due to furloughs.”
Total revenue fell 1.6% to 18.79 billion.
Cyient also incurred a charge worth 80 million rupees due to mergers and acquisitions expenses related to the spin-off of its semiconductor unit.
Peer Tata Elxsi too reported a fall in profit for the December quarter last week, due to the charges from the new labour codes.
($1 = 91.5980 Indian rupees)
(Reporting by Sai Ishwarbharath B in Bengaluru; Editing by Janane Venkatraman)
