NIIT net dips 12.5%

NIIT Technologies on Tuesday reported a 12.5 per cent drop in net profit at Rs 56 crore for the quarter ended December 31 on tepid demand from the banking and financial sector. It was Rs 64 crore last year. Consolidated revenue was up 19 per cent to Rs 514 crore for the quarter compared with Rs 433 crore last year.

“The results were broadly in line with estimates. While revenues beat our expectations, margins came slightly lower than what we had assumed,” said Dipen Shah, head of PCG (Private Client Group) Research, Kotak Securities.

The operating margins declined to 15.8 per cent from 18 per cent in the corresponding period last year.

"There was softness in the BFSI (banking, financial services and insurance) segment due to overall economic uncertainties, with a major catastrophe like Hurricane Sandy causing losses among reinsurers," said Chief Executive Officer Arvind Thakur.

Despite the economic challenges, the company added $83 million of fresh orders during the quarter, including a $10 mn renewal in travel and transport, leading to $242 mn of orders to be executed over the next 12 months. It added four clients -- two from manufacturing and one each in travel & transportation and government.

Among industry segments, BFSI contributed 31 per cent towards overall revenue. Manufacturing and government contributed six and eight per cent, respectively, while travel and transport contributed 42 per cent.

Business in the US contributed to 37 per cent of revenue. Europe, the Middle East and Africa improved to 40 per cent of the total share, while that from the Asia-Pacific and India remained 23 per cent.

The net addition in employees was 265, taking total headcount to 7,882 at the end of the period.

The scrip was at Rs 276.70, up 0.3 per cent in the afternoon trade at the Bombay Stock Exchange.