NIIT Technologies’ Q2 Profit Falls 9% 58.9 Cr

The leading IT firm of India, NIIT Technologies Limited reported better-than-expected revenue of Rs 692.2 crores for the quarter ended 30^th September 2016 helped by growth in its banking, financial services and insurance business aka BFSI business from the United States.

The net profit of the company, however, fell about 9 per cent to 58.9 crores in the 2^nd quarter compared to a year earlier period due to decline in higher margin U.K. insurance business and higher tax rate.

NIIT Technologies’ revenue rose by 2 per cent year over year (y-o-y), helped by growth in BFSI from the US as well as higher traction in travel as well as transportation business.

Analysts on an average had expected revenue of Rs.689.9 crores, according to Bloomberg.

The company revenue rose by 3.3 per cent sequentially and it secured fresh orders of US$ 143 million during the quarter.

The revenue from U.S. rose 7.9 per cent sequentially and accounted for nearly half of company’s total revenue followed by Europe, the Middle East as well as Africa (EMEA) with 33 per cent of total revenue.

During the reported quarter, the company added 3 new customers, 1 in the US and the other 2 in EMEA.

Among various industry segments, BFSI 3.4 per cent sequentially grew by led by Insurance in U.S. with both existing and new clients scaling well.

The revenue from the travel and transportation business rose by 6percent sequentially resulting in revenue share of 33 per cent.

NIIT’s India business continued its decline with revenue falling 7.2 per cent sequentially due to lower business from Indian government. NIIT’s results come in between a rough quarter for the Indian IT industry as the country’s top two firms reported poor results over week raising concerns about growth in the rest of the year.

India’s second biggest IT firm Infosys Ltd also cut its full-year dollar revenue forecast for the second time this fiscal, and now expects to grow between 8.2 per cent and 9.2 per cent, and 8-9 per cent in constant currency terms. NIIT’s digital business continued to expand and accounted for 19 per cent of the total revenue.

Currently NIIT Tech share price is trading at Rs 423.05, down by 0.80 per cent.