NIIT Tech Q1 net profit slips 18.7% to Rs 43.2 cr

IT firm NIIT Technologies today said its net profit declined 18.7% to Rs 43.2 crore in the April-June quarter 2014 on account of revaluation of current assets and liabilities due to rupee depreciation.

The company's net profit stood at Rs 53.2 crore for the quarter ended June 30, 2013.

Its consolidated revenue, however, grew 6.6% to Rs 577.6 crore in the said quarter from Rs 541.9 crore in the same period last fiscal.

"Lower other income at Rs 3.6 crore as compared to Rs 20.6 crore in the same quarter last year, on account of revaluation of current assets and liabilities due to rupee depreciation, has resulted in year-on-year decline in profit after tax," NIIT Technologies CEO and Joint MD Arvind Thakur told reporters here.

Operating margins declined 171 basis points to 13.4%, primarily due to wage increase during the quarter, he added.

NIIT Technologies gave 8% wage hike on an average to offshore employees, while the same stood at about three% for onsite employees. Its total headcount stood at 8,282 at the end of the quarter under review.

On the demand environment, Thakur said growth will pick up in the next few quarters.

"Revenues are expected to scale up during the second half of the year. Environment continues to be good," he said, adding that a lot of activity would be seen in India too, where the new government has put a lot of emphasis on technology.

Talking about geographies, Thakur said the US region had a setback as two clients in the banking, financial services and insurance (BFSI) segment scaled down their business, impacting overall growth in the region.

"In all, the US contributed to 44% of total revenues during the quarter, Europe, Middle East and Africa (EMEA) 36% and the rest of the world 20%," he said.

Apart from BFSI vertical, travel and transportation, manufacturing/distribution and government segments grew sequentially.

BFSI contributed to 34% of total revenues, travel and transportation 39%, manufacturing/distribution seven% and government six%.

"During the quarter, we secured fresh orders of USD 124 million. We added 4 new clients and we now have USD 295 million worth of business executable over the next 12 months," Thakur said.

The company's scrip closed at Rs 54.15 apiece, down 11.72% from its previous close on the BSE.