It is my pleasure to be here today and share with you the highlights of NIIT'sperformance in FY 16.
The year 2015-16 was shaped by global economic uncertainty arising out of financial andgeo-political risks volatility in exchange rates and a slowdown in the growth of China.While at the one end the global economy faced challenges at the other it saw theDigital revolution gain momentum.
A spate of industry studies and researches conducted during the year also pointed to arise in Digital adoption and its subsequent impact on the revenues of organizationstargeting the Digital space.
The latest vision setting study by Indian IT industry spearhead NASSCOM and globalconsultancy firm McKinsey titled 'Perspective 2025: Shaping the Digital revolution' forexample showed that the opportunity that Digital technology will create for Indianbusiness and technology service providers will touch USD 4 trillion by 2025. Researchfurther indicates that in order to execute Digital Transformation projects India willneed over a million engineers trained in Digital technologies by 2020.
Therefore Digital Transformation will continue to be a high potential segment for theIndian IT industry including your Company which is actively addressing this market.
Besides riding the Digital Transformation wave your Company is also expected to reapthe benefits of the increase in training spend by global corporations especially indeveloped economies. Even during FY 16 many of these organizations outsourced theirtraining to specialist training providers such as NIIT.
By all accounts it was a year of fair growth for NIIT Ltd. which grew across its threekey businesses including the Corporate Learning Group Skills & Careers Group andSchool Learning Group. Your Company continued to strengthen its Platforms of Growth aswell as Liquidity Profitability and Capital Efficiency.
While NIIT's net revenues grew at five percent during FY 16 touching Rs. 10069million during FY 16 PAT was pegged at Rs. 672 million.
Our performance during the year was driven by Corporate Learning and in particularits rock steady high-growth high momentum Managed Training Services portfolio. Thebusiness contributed Rs. 5679 million to your Company's turnover which accounted for 56percent of our revenues.
The business added seven new global customers in FY16 including four during Q4 for itsManaged Training Services offering. Your Company ended FY16 with 31 Managed TrainingServices customers and a Revenue Visibility of USD 200 million over the remaining periodof existing contracts.
The year was very significant for the Skills and Careers business too with thebusiness engineering a turnaround and getting 'Back to growth and profitability'.YourCompany achieved this by realigning its focus on the needs of the emerging DigitalServices industry and refurbishing its umbrella of courses with the futuristic DigiNxtseries of training programs.
While demand for IT training in India continued to be weak in FY16 it surged in the'Beyond-IT courses' domain spurred by demand for skills in the Financial Servicessegment. NIIT's Beyond IT products grew by 23 percent YoY with their revenue contributionwithin the Skills and Careers business increasing to 40 percent.
The business additionally leveraged the start-up revolution in India by introducingStackroute a range of courses targeted at creating full-stack multi-skilled andmulti-disciplinary programmers that could be employed by the best product engineeringstart-ups and IT companies.
The Skills and Careers business also continued to drive the use of technology for thedelivery of its courses to increase coverage and improve efficiency. Your Companydelivered its training through a combination of its online platform the Cloud Campussatellite-based Synchronous Learning Technology and a physical network of learning centersacross India China Asia and Africa.
Cloud Campus in fact remained the identified platform of growth in the careers segment.The delivery platform helped NIIT address market needs achieve higher scalability withavailable resources lower the cost of delivery and achieve better capacity utilization.Today over 70 percent of NIIT centers and 78 percent of our products are Cloud-enabled.
During the year and with the intent of providing more attention to school learningNIIT completed its transfer into a wholly-owned subsidiary which was christenedMindChampion Learning Systems Ltd. The schools business signed up 336 new schools in FY 16for its nGuru product suite and paid greater attention to its IP and service-drivenofferings.
FY16 was an important year for the company as it entered its second phase of businesstransformationRe-energizationfollowing the completion of the Restructuringphase in FY15.
The three pillars of NIIT's business remained focused on delivering solutions thatadded value to customers in the Digital age. Corporate learning for instance paidattention to growing its existing clients and investing in newer sectors like BFSI andLife Sciences. Its aim was to achieve significant progress on the productivity program soas to improve EBITDA. The business ensured that its funnel was healthy and strengthenedits learning advisory services capability.
For Skills and Careers the focus remained the Digital Transformation space whileMindChampion Learning Systems Ltd. moved to its next level of growth through strategictie-ups with private schools.
NIIT's strong value proposition innovation and excellence in customer service resultedin the company winning industry recognitions and awards several in partnership withglobal customers such as Shell and Metlife.
NIIT was featured as "India's Most Trusted Education Brand" in the BrandTrust Report India Study 2016 undertaken by Trust Research Advisory for the fourthconsecutive year. Your Company was conferred with the 'Best Innovation Brand' in theEducation sector award at the ASSOCHAM National Brand Summit & Excellence Awards 2016.
During the year Business World recognized NIIT as the 'Most Respected EducationCompany' while NIIT USA was featured in the 2015 'Top 20 Training Outsourcing Companies'for the ninth consecutive year by Training Industry Inc.
Your Company which derives its strength from its People continued to invest in thedevelopment of its workforce equipping NIITians with new age skills and competencies.During FY16 the Company remained focused on driving a performance-based culture throughthe goal setting and BSC process.
Leadership Development initiatives were introduced through the 'CEO's LeadershipCircle' and 'Trailblazers' Club'.
NIIT rolled out special training interventions for the capability building of middlelevel managers. It additionally introduced a 'Role-Based Training and Certification'program for certain identified pivotal roles to ensure higher performance.
At the end of March 31 2016 the people count at NIIT stood at 2372 (excludingproject staff) with 70 percent of people in direct roles 11 percent percent in Sales& Marketing and the balance in indirect roles.
The turnaround in business performance achieved during the year allowed your Company tostart investing in the Renewal phase of its transformation.
As part of this phase we are looking at new models for delivery and technology-basedplatforms that will help your Company build sustainble momentum in growth andprofitability.
Going forward we expect Corporate Learning's Managed Training Services business to getboosted by the demand for training outsourcing. With its track record of managingcomprehensive MTS engagements for existing customers corporate learning is set toleverage this capability and experience to accelerate growth through larger ticket annuitycontracts.
In the year ahead the Skills and Careers business which has returned to growth andprofitability in FY16 will push its recently introduced StackRoute and DigiNxt programs.This is expected to drive growth for its IT training portfolio.
Looking ahead we see our 'Beyond IT' programs continue their growth momentum riding onthe strong demand from private and public sector banks. These programs have been madeavailable to the entire network of owned and business partner centers which has greatlyenhanced their revenue potential.
Additionally NIIT will continue to focus on India and China to drive growth.
In the area of School Learning your Company will continue to ramp down the capex-drivenand capital-intensive business in schools and focus on an IP-driven business in privateschools. While this will impact revenue growth in the near term completion of existingcontracts for government schools will lead to an improvement in liquidity and capitalefficiency of the business.
As I conclude my speech I would like to thank each one of you for standing solidlybehind NIIT and remaining our core strength in times of turbulence and change.
I am personally very excited about the year ahead which I believe looks promising andeventful. There is much to look forward to as NIIT proactively seizes new businessopportunities and sets a brisk pace for itself in FY 17.
Rajendra S Pawar
Chairman NIIT Limited