NIIT Tech net dips 9.2%, revenues up 1.4%

Mid-tier IT services firm NIIT Technologies Ltd reported a 9.2 per cent decline in net profit at Rs 48.2 crore for the three months ended

December 31 , 2014 compared to the corresponding period last year. Its revenues were up 1.4 per cent year-on-year to touch Rs 595.3 crore in what is traditionally a weak quarter.

However, the company’s net profit registered a 20.2 per cent increase sequentially on back of improved operating margins, higher other income and lower depreciation over the previous quarter.

The company saw a dent in its operating margins due to a specific engagement in the beginning of this year which explains the yearly decline in net profit.

Arvind Thakur, chief executive officer and joint managing director, NIIT Technologies said that the margins have been steadily increasing and should be back to the previous year’s level (16 per cent) by the end of the March quarter.

On the overall demand environment, Thakur said there is robust growth in the US even though weakness continues in the Euro Zone along with palpable excitement in India.

 The decline in oil prices is also supportive of a key vertical of travel, which constitutes the largest chuck of the company’s revenues, added Thakur.

“During the quarter, NIIT secured $109 million worth of new orders. About 55 per cent of new business was secured in the US, which included a large engagement with an insurance major,” Sudhir Chaturvedi, chief operating officer, NIIT Technologies said.

The company added five new customers during the quarter, with two in the US and one each coming from EMEA, APAC and India.

The company’s financials were not impacted significantly by the current volatility as the gains from the dollar were offset by the losses from the Euro and the GBP.

The higher other income is accounted for by the revaluation of assets and liabilities.

The company which had a freeze on hiring said its headcount declined by 229 people due to natural attrition which stands at around 15 per cent.  

This also led to productivity gains for the company as it did not intentionally fill in the gaps as part of an ongoing reorganisation in the company.

Thukar said that it will begin the hiring again from the current quarter.