Ajay Aggarwal - Executive Director
and Chief Financial Officer at Cyient

In a post-Covid world marked by a slowing global economy, rapid technological disruption and a volatile and complex business environment, enabling growth has become harder than ever. In turn, this makes the CFO’s role into that of a strategic business partner, capable of guiding the organisation to fully realise its growth plans.  Ajay Aggarwal, Executive Director and Chief Financial Officer at Cyient, play a multi-faceted role – one that includes responsibility for driving business growth, improving business processes, mitigating risks, interacting with investors and grooming future talent.

As a steward of business performance, Mr Aggarwal has been the driving force behind numerous initiatives that have led Cyient to enhanced profitability, a dramatic improvement in cash flows and vastly- simplified processes. Under his watch, there has been a renewed emphasis on rigorous cash planning, generation and preservation, and profitability and margin expansion. Consequently, cash flows rose to their highest-ever levels (Rs 7.6 billion in FY21) and PAT set a new record (Rs 5.2 billion in FY22) while margins jumped to ~14% (from what level previously?). Mr Aggarwal has also been instrumental in driving inorganic growth, including through several recent M&As.

Through the use of formal risk-assessment processes, Mr Aggarwal keeps a close eye on financial, operating, cyber and regulatory risks. The Finance team tracks leading indicators and past trends to provide proactive guidance to the business, which helps reduce complexity as well as margin-related risks. A strong risk-management culture has been institutionalised at all levels across the organisation.

Mr Aggarwal fully understands technology’s pivotal role in driving efficiency. His emphasis on digitising and automating processes, supported by robust business applications and a strong IT infrastructure, have generated cost efficiencies and productivity gains. Thanks to Covid-19, Cyient’s Finance automation and digital transformation accelerated sharply, with a focus on cost efficiencies, the quality of compliance, and enabling business growth. Finance has improved its data analytics capabilities to provide relevant insights to the business for faster decision-making.

In a candid conversation with CFO Connect, Ajay Aggarwal spoke about the impact of Covid on his industry and the key tenets of building a resilient organisation.

How has the pandemic impacted the IT industry in general and Cyient in particular?

The pandemic had a pronounced impact on Engineering, Research and Development (ER&D) spending, especially across verticals such as aerospace and transportation, which saw a demand shrinkage due to project cancellations or delays while industries such as semiconductors, utilities and geospatial technology witnessed a softening for a few quarters. In response, companies started increasingly looking at business models that are more flexible and less risky. The focus shifted to pricing actions, resetting operating models, streamlining the supply chain and evaluating countermeasures to bolster current and future quarterly demand. Even before the pandemic, the IT industry had started adopting a hybrid work model, albeit at a slower pace. Covid significantly accelerated the pace of adoption.

Globally, the pandemic accelerated digital adoption, with many companies realising digital transformation targets that would normally span several years in just a few months. Cyber security became a critical element of every business continuity plan (BCP) while a growing demand for work agility and enhanced customer experience spurred the growth of business process automation and AI integration. The pandemic also triggered a host of new customer demands, urging businesses to offer fast, modern and innovative solutions.

In our case, the pandemic led to widespread adoption of remote working across our client base. Today, there is greater openness to working in an offshore setup, prompting many to move their work to low-cost centres such as India. This working model has demonstrated some early success with increased productivity. There is also now greater acceptance that work can be delivered from anywhere. Consequently, we are witnessing strong growth in outsourcing with a healthy deal pipeline and new client wins across the industries that we operate in. There is also an increased focus on captive carve-outs, with companies being more and more comfortable with outsourcing non-core parts of their businesses.

From the Finance function perspective, the uncertainty forced us to re-evaluate cost structures, defer long-term capex plans and prepare for a slowdown by assessing different organisational levers. We ran multiple simulations to assess how changes to income statements will impact forecasts. Eventually, the focus shifted to improving tech-enabled functionalities to confirm timely access to the required information.

The significance of moving quickly to counter disinformation and communicate with employees, customers and business partners became the key priority. Regular communication channels such as town halls, online workshops, one-on-one discussions and informal chats with a focus on ‘physical and mental health’ were quickly put in place. It truly put to test our culture as an organisation and the leadership’s ability to be decisive and yet empathetic in times of crisis.

The uncertainty created by the pandemic forced us to re-evaluate cost structures, defer long-term capex plans and prepare for a slowdown by assessing different organisational levers.

Our robust focus on cash preservation and collection during the pandemic resulted in the highest ever cash flow generation of Rs 7.6 billion in FY21 (a conversion rate of 113.5% of EBIDTA). However, revenues and PAT witnessed YoY declines of 10.9% and 0.3%, respectively. Nevertheless, with a clear focus on initiatives and tapping into existing opportunities, the last year (FY22) witnessed the highest ever PAT at Rs 5.2 billion (a 40.6% growth) and revenue growth of 9.2% with a healthy EBIT margin of 13.9%.

Going forward, what opportunities are available or do you anticipate will arise? Are there growth-related concerns as the economy seems to be slowing down?

The IT industry itself is becoming increasingly complex and changing rapidly, at both the technology and business levels. The companies that will thrive in this environment will be the ones hiring again, making investments in skills and training, expanding their market reach to new customers and verticals, partnering with competitors and embracing emerging technologies.

The criticality of automation and the impact it can have on operations cannot be understated. It will enable companies to manage costs better and thereby manage pricing pressures. On the operational front, it can drive faster, more accurate processes. Adoption of emerging technologies is one of the biggest drivers for ER&D. This includes IoT, AR/VR, additive manufacturing, 5G, digital twins, robotics and drones/UAV. The pandemic has accelerated the customer’s technology roadmap, and now companies are investing in technology across the value chain – from product development to manufacturing and aftermarket services. Key areas that may drive growth for the industry are IoT-based connected devices, AI & ML, telemedicine, remote workplaces, retail and e-Commerce digitisation, and factory automation.

We are significantly committed to entering new markets, branching into new services and skills, hiring and recruiting, and investing in sales and delivery to spur growth.

The acquisitions landscape is also very active. One thing that the companies are wary of is the sky-high valuations currently in the market. With this, the deal execution, integration, and fly-wheel effects are more important to ensure the success of the deal.  Despite the economic slowdown, we are quite bullish on our expectations for revenue growth over the next two years. As the negatives start to wane, business activity is witnessing an acceleration. We are committed to entering new markets, branching into new services and skills, hiring and recruiting, and investing in sales and delivery to spur growth.

It is difficult to predict the future in the face of such radical disruption and competition, but what would you say companies in the IT sector need to do to ensure success and continued growth in the ‘new normal?’

To drive growth in the ‘new normal,’ it is critical to not revert to the inefficient, pre-Covid cost structures and ensure the sustainability of margins. Not focusing on innovation and being happy with the status quo is the biggest risk. Companies – even those in the services sector – need to continuously innovate else or else risk perishing.

The pandemic has accelerated the need to reskill the workforce. There will be increased focus and investment in skilling the workforce, especially on new digital offerings and processes. Newer technologies will significantly alter the skill profiles of future jobs, and workers will have to equip themselves with the requisite skills to stay relevant in a competitive job market. On their part, organisations would be required to invest significantly in skilling new areas such as AI, ML, cloud, robotics and 3D printing.

To drive growth in the ‘new normal’, it is critical to not get back to pre-Covid inefficient cost structures and ensure the sustainability of margins.

Companies also need to diversify on various fronts to stay resilient, including maintaining a presence in multiple geographies to counter geopolitical risks. One would need to lean on technology to build resilient business models, weather pandemic-inflicted disruptions and deliver superior customer experiences. Companies must develop a culture that empowers people and avoids the centralisation of control. Team structures need to include clear accountable roles; work satisfaction in terms of concrete career roadmap and growth; remuneration benchmarked with industry and other such measures to retain talent.

As a CFO, how have your priorities changed/shifted in the last two years, especially on account of the Covid crisis? What are the top business concerns?

The pandemic has brought to life every company’s BCP plan. Earlier, this might have been there in concept, but now it is a reality for everyone. We have learned to be robust, agile, and flexible with customers and employees. Cash has certainly been a top priority. We have had robust plans to accelerate cash generation with a focus on customer collections, tax incentives utilisation and the recovery of bad debts. Another priority has been margin sustenance and expansion by optimising cost structures, increasing productivity, process automation and digital transformation.

The pandemic has brought to life every company’s BCP plan. Earlier, this might have been there in concept, but now it is a reality for everyone.

On the talent front, empathy-driven leadership and transparency have become the most important qualities to navigate the organisation through the initial days. We have tried to be accommodative of our associates’ unique situations in the trying times and drive transparent two-way communication across the organisation.

What are some key risks that the company faces? What role is Finance playing/expected to play in this endeavour?

Some of the risks faced by Cyient are cybersecurity, talent attrition and competition. (New entrants/boutique firms in the digital engineering space have a greater ability to undercut price and win deals.) As Finance, we endeavour to ensure a robust risk management mechanism, internal processes and controls. We support the business in identifying these risks and consciously working on a mitigation plan that is well-placed to deal with any eventualities. For instance, we recently launched a global compliance tool to map and monitor global regulatory compliance requirements. We also ensure that the risk management culture is imbibed and institutionalised at all levels across the organisation. At the heart of the governance initiative is the ESG framework adopted by Cyient.

The Finance function supports the business in identifying these risks and consciously working on a mitigation plan that is well-placed to deal with any eventualities.

We also keep a keen eye on prospective companies for investments that have strong capabilities, usable IP and a penchant for innovation. From organisation and people perspectives, giving a good career path with strong retention plans, and increased participation of employees in the ESOPs programme are a few things that are helping us in retaining and attracting talents.

What is driving the digital adoption of technologies at Cyient, and especially within Finance? What technologies do you plan to implement going forward? How have business metrics changed for you?

While driving the adoption of digital technologies at Cyient, and specifically within the Finance Function, we ask ourselves whether the technology will:

  • Lead to the transformation of processes to best in the class?
  • Save time to focus on value-adding activities?
  • Increase stakeholder satisfaction (business, investors, associates, vendors)?
  • Drive efficiencies across the value chain with cost optimisation?
  • Lead to a strong control and governance framework that relies more on processes and systems?

At Cyient, we use best-in-class metrics across the ecosystem. The availability of quality information is as important as the time by which it is made available. Therefore, one of the key initiatives is to have the financial results available by the 3rd calendar day of every month, which gives sufficient time to the business to keep the focus on the business objectives and correct the course as warranted. Another key initiative is to be in the top quartile for days sales outstanding (DSO).

For Finance, the focus is on technologies that centre around cost, compliance, standardisation, business growth and enablement.

From a business-enablement point of view, the focus is on the implementation of tools such as ‘Deal Margin’, ‘Business Planning and Consolidation’ and the use of Tableau dashboards. For Finance, the focus is on technologies that centre around cost, compliance, standardisation, business growth and enablement. The objective is to derive insights through the adoption of data analytics for faster decision-making.

Crises are often opportune times to restructure parts of the business that require transformation. What kind of measures are being undertaken/considered to reduce cost or increase efficiency/revenue or boost productivity?

Given the aggressive growth trajectory we are charting, we thought it best to run and manage the shared services by experts. Recently, we outsourced our FP&A, HR and IT functions to help us match the growth path with scalability, agility and best-in-class processes with a strong control framework. However, key decision-making activities including goal setting and reporting are still retained by Cyient.

We are heavily investing in technologies for process improvement and automation. This also includes providing people with the technology they need to work remotely and be successful. The underlying focus is to build secure systems and networks to enable this without causing a risk for the company. We also continue to focus on building an efficient cost structure that drives margin expansion.

Build: We have outsourced our F&A, HR and IT functions with the goal of helping us to match the growth path with scalability, agility and best-in-class processes.

For most companies, it is about survival with a focus on the here and now, but smart companies are taking calculated strategic bets for future growth. What are some of the key strategic initiatives that are underway or planned? What is your role in them?

One of the most important strategic initiatives, with significant support and contribution from Finance, is making investments through M&A. We are focused on acquisitions to deepen our presence, add niche skills, especially within technology consulting, diversify our portfolio and build new capabilities in communication.

Recently, our acquisition cycle has picked up significantly and is expected to continue going forward. We are treading carefully and watching out for value plays. We recently acquired Grit consulting, a Singapore-based technology consulting company. With this acquisition, we will expand the capabilities of Cyient Consulting and enable our consulting-led, industry-centric, technology solutions growth aspirations. We also acquired Citec, an international engineering services company headquartered in Finland, to expand our global footprint to the Nordic region.

Our acquisition cycle has picked up significantly recently and is expected to continue going forward.

The next few months are critical from an integration and execution point of view. We are confident of achieving the desired outcomes. Another focus area is sustaining and growing healthy margins. Automation, operational efficiency, cost optimisation and efficient cost structures are at the core of the Finance function’s plans to support the same. Other than that, talent management is an important aspect of our strategic plan. Staffing, open positions, skills gaps, retention, diversity – each area has a critical plan across the organisation and is a top priority for the Finance Function too.

Personally, how have you coped with the disruption of the last 2 years? What keeps you operating at an optimum level?

Engaging in my hobbies and spending time with family helped me keep a balanced outlook in adversity

As the pandemic set in, it placed a lot of stress, anxiety and prolonged uncertainty on everyone. At a leadership level, constantly recalibrating expectations and effective communication helped me tremendously to operate at an optimum level. On a more personal level, engaging in my hobbies and spending time with family helped me keep a balanced outlook on adversity.



For the CFO, the significance of day-to-day ‘Finance’ work is diminishing relative to new demands around business leadership. Apart from a basic technical/accounting background, the key skills and competencies today’s CFO must possess rest on four fundamental pillars: leadership, operations, controls and strategy. Sumendra Jain, CFO (India & Asia Pacific) at SMS India, believes that for Finance leaders to be effective business partners, they must have the necessary leadership and communication skills. Additionally, to be able to offer an independent perspective, they must possess a strong understanding of the company's business model and industry. CFOs should also be able to identify opportunities for top-line growth, manage downside risks and drive profit improvement, not just through the traditional methods of cost-control, but using new methods like product line/regional profitability analysis and benchmarking against industry players. Sumendra’s 25-year-long career offers insightful lessons and learning for executives in general and CFOs in specific.