NIIT Tech Q2 net profit dips 9% to Rs 59 cr

Insurance business subdued due to Brexit impact, consolidated revenues up 2%

IT firm NIIT Technologies today posted a nine per cent decline in consolidated net profit at Rs 58.9 crore for the quarter ended September 30, 2016.

The company's net profit stood at Rs 64.6 crore during the same quarter in the year ago period.

Its consolidated revenues increased two per cent to Rs 692.9 crore in the reported quarter from Rs 679.3 crore in the July-September 2015 quarter.

"Lower revenues in NITL (the insurance arm of NIIT Technologies, primarily servicing the Lloyd's market in the UK) which is a high margin platform business for NIIT Technologies over same period last year is a result of uncertainties in UK for Brexit," NIIT Technologies CEO and Joint MD Arvind Thakur said.

The company's digital business continued to see strong traction and accounted for 19 per cent of its revenues, he added.

"Revenues grew 3.5 per cent sequentially in constant currency driven by expansion of business in western geographies, specifically in insurance and travel segments," he said.

Increase in revenues and decline in SG&A expenses resulted in expansion of operating margins by 139 basis points to 16.5 per cent in the quarter, he added.

Revenues from the US grew 4.6 per cent taking the topline share of the geography to 49 per cent. EMEA revenues grew 7.9 per cent sequentially with share of 33 per cent.

APAC contributed to 11 per cent to total revenues, whereas India business declined by 7.2 per cent due to lower revenues from Indian government leading to revenues share of 7 per cent.

It registered fresh orders worth $143 million in the said quarter and added three new customers in the US and Europe, Middle East and Africa (EMEA) region.

Banking, financial services and insurance (BFSI) grew 3.4 per cent sequentially during the quarter increasing the revenue share to 42 per cent with growth.

Travel and transportation vertical registered 6 per cent growth with a revenue share of 33 per cent. Manufacturing, media and other segments contributed to 25 per cent of revenues.

Headcount at the end of the quarter stood at to 8,868 and attrition was 12.9 per cent.