Cyient shares in focus as U.S. unit hit with $26,780 IRS penalty
Cyient Ltd
are set to be in focus on Tuesday after the technology company's U.S. unit,
Cyient Inc
, received a penalty order of $26,779.74 from the U.S. Department of the Treasury's Internal Revenue Service (IRS).
According to
Cyient
Ltd's stock exchange filing, the penalty pertains to alleged non-compliance with the Employer Shared Responsibility Provisions (ESRP) under the Affordable Care Act (ACA).
The IRS stated that Cyient Inc. either failed to provide Minimum Essential Coverage (MEC) to at least 95% of its full-time employees and their dependents or had at least one full-time employee qualify for a Premium Tax Credit (PTC) despite offering such coverage.
Cyient clarified that the penalty order will not have a material impact on its financials, operations, or other business activities. The company added that it is actively working with its health insurance broker to challenge the IRS decision and is seeking cancellation of the penalty.
'Cyient continues to ensure compliance with applicable regulations and is working toward a resolution in accordance with U.S. employment and healthcare laws,' the company said.
Q4 earnings and stock performance
For the fourth quarter, Cyient reported a 39.4% year-on-year jump in profit after tax to Rs 170.4 crore, supported by improved execution and cost controls. Revenue slipped 0.9% sequentially to Rs 1,909.2 crore, while EBIT margins improved to 12.3% from 11% in the previous quarter, aided by operational efficiencies.
Shares of Cyient closed at Rs 1,204.10 on the BSE on Monday, up 0.91%. The stock has fallen 33% over the past year but has rebounded 4% in the past month and 2% in the past week.
Also read |
Mahindra & Mahindra shares in focus as Q4 results beat estimates. Should you buy, sell, or hold?
Technical outlook
Technical indicators suggest a mixed picture. The stock is trading below six of its eight key simple moving averages, including the 10-day, 30-day, 50-day, 100-day, 150-day, and 200-day SMAs. The 14-day Relative Strength Index (RSI) stands at 47.4, signaling neutral momentum, as RSI levels below 30 are seen as oversold and above 70 as overbought.
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