Cisco India business growth goes flat after bumper year

Cisco, which is into networking, security, collaboration, cloud management among other technology products and services and celebrating four decades of its birth this year, has again hit a speed bump after witnessing a breakout in the year ended March 2023 with revenue rocketing 40%.
 
The firm, best known for its networking equipment, saw India unit revenue rise under 1.5% in FY24, reaching ₹12,074.5 crore, a significant slowdown compared to turbocharged growth in FY23, according to information compiled by VCCEdge, the database unit of VCCircle.

 
In addition to the slower revenue growth, Cisco’s net profit also faced a substantial decline. After a more than 1.5-fold increase in FY23, the company saw a 40% drop in PAT (profit after tax) in FY24, ending the year at ₹1,463.8 crore.
 
The deceleration at Cisco India is also reflective of the company’s global performance. For the fiscal year 2023-24 ended July 2024, Cisco’s revenue was $53.8 billion, a decrease of 6%. The company attributed the decline to weak networking business.
 
Splunk, which was acquired by Cisco in a big ticket deal worth $28 billion in 2023, contributed approximately $1.4 billion of the total revenue. Notably, Cisco’s acquisition of Splunk reflected a negative impact on the company’s FY24 results (both GAAP and GAAP EPS). This was particularly noticeable in Q4 FY24, the first full quarter post the close of the acquisition deal. This was also the fourth consecutive quarter of declining revenue for the company.
 
Cisco India did not respond to TechCircle’s queries for this report.
 
The company has seven sales offices in India — New Delhi, Mumbai, Bengaluru, Chennai, Pune, Kolkata, and Hyderabad. It commenced operations in 1995, as part of the APAC theater. Notably, the Cisco Global Development Center in Bengaluru is the largest of its kind outside the US.
 
This year, Cisco began its first manufacturing facility in India. The production site is located in Sriperumbudur, Tamil Nadu, launched in collaboration with contract manufacturer Flex. Cisco will be rolling out routing and switching products for domestic and export markets.
 
The company had previously said that this site may drive $1.3 billion in revenue and create 1,200 jobs. Notably, in August Cisco announced that it will be trimming 7% of its workforce globally as part of its restructuring planning, impacting 6,000 people. This is the second round of layoffs after February when Cisco laid off 4,000 jobs.
 
Earlier in June, Cisco announced the launch of new cloud region hosted within India, called Meraki India Region, to comply with data localisation norms. 
 
Daisy Chittilapilly, President of Cisco India and SAARC, said in an interview with CNBC-TV18 that the company is bullish on the India opportunity; she also added that the India center is expected to be among the top five markets for Cisco in the next few years.