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.

NIIT Tech Q2 Net At Rs 59 Cr, India Business Falls 7.2%

NIIT Tech has reported consolidated net profit of Rs 58.9 cr in July-September from Rs 28.6 cr in last quarter. During Q2, its consolidated total income was at Rs 693 cr from Rs 671 cr quarter-on-quarter. Its operating profits increased by 12.8 per cent sequentially to Rs 114.5 cr and profit after tax stood at Rs 58.9 cr.

Arvind Thakur, CEO and Joint MD said that revenues grew 3.5 per cent sequentially in constant currency triggered by expansion of business in western geographies specifically in their insurance and travel segments. Strong growth in western geographies with traction in key verticals of BFSI and travel and transportation resulted in 4.6 per cent growth in the US with revenue share of 49 per cent and 7.9 per cent sequential growth in EMEA with revenue share of 33 per cent to total revenues. 

Meanwhile, NIIT Tech share price was trading 4.45 per cent lower at Rs.420.70 on the NSE today.

A company statement said that increase in revenues and decline in SG&A expenses culminated in expansion of operating margins by 139 basis points (bps) to 16.5 per cent in the quarter.

Segment-wise, BFSI grew 3.4 per cent sequentially during the quarter increasing the revenue share to 42 per cent, growth being led by insurance in US with both existing and novel clients scaling well. Travel and transportation reported an even stronger growth of 6 per cent resulting in revenue share of 33 per cent. Media, manufacturing, and other segments contributed to 25 per cent of revenues.

Geography-wise, APAC contributed to 11 per cent to total revenues, whereas India business declined by 7.2 per cent due to lower revenues from India Government leading to revenues share of 7 per cent.

The quarter saw strong intake of new business of USD 143 million. This included renewal of a big engagement with a media client in the US and a large IMS contract from a novel insurance client in the UK. During the quarter 3, novel customers were added, 2 in EMEA and 1 in the US. Headcount at the end of the quarter stood at to ‘8868’ and attrition was 12.9 per cent. Utilization improved to 81 per cent.

For further information, visit NIIT Tech share price history.