2017-18 was a year of global economic rejuvenation with the economy growing at 3.7percent and more than 120 nations logging in higher momentum and showcasing economicrevival. On the flip side immigrant issues a heightened spirit of nationalism andprotectionism and raised tariff walls threatened to vitiate the political and tradeclimate and increase risks.
The path to growth was led by the US economy which recorded a strong year with theunemployment rate falling to 3.9 percent and spurring a war for talent. Leadingcorporations enhanced spend on Learning and Development especially owing to technologicaldisruption and their investments in the state-of-the-art. Many outsourced their trainingrequirements to specialised learning companies.
Mirroring global trends the Indian economy also increased momentum with the GDP at 6.7percent and growing at a robust 7.7 percent in
Q4 of FY 18. This positioned India as the fastest growing global economy with anexpected GDP of 7.4 percent in 2018 and 7.8 percent in 2019 according to the InternationalMonetary Fund.
Recognising that digital technologies such as Blockchain Automationencompassingmachine learning Artificial Intelligence Robotics and Analyticsas well as SocialCloud and Mobile were catalysing global IT spending as well as the need for moreskill-intensive manpower NIIT continued to develop a talent pipeline for digitalprojects. NIITs focus during FY 2018 therefore was on introducing a slew ofcutting-edge programs that further expanded its portfolio of digital training offerings.Whether it was our DigiNxt Series our super five Career Series programs or ourTraining.com platform with its advanced courses in Data Sciences and Digital and SocialMedia Marketing digital was the way to go for NIIT.
NIITs FY 2018 financial statistics remained positive with net revenues pegged atRs. 850.5 crores and PAT at Rs. 62.5 crores (a jump of 53 percent). NIITs OperatingProfit grew by 11 percent during FY 2018 and the EBITDA margin improved 80 basis pointsYoY.
We achieved this owing to the robust performance of our Corporate Learning Group whichgrew at 14 percent YoY and cash management in our Skills & Careers and schoolsbusinesses. This also resulted in our net debt being brought down to Rs. 40.1 croresincluding acquisition related cash out flow. Overall we continued to strengthen ourplatforms of growth while improving liquidity profitability and capital efficiency.
CLG was indeed the brightest star on our horizon which accounted for 61 percent of NIITrevenues in FY 2018 and increased its revenue visibility by 18 percent YoY. CLG continuedto drive the growth and profitability of NIIT through the strong momentum of its ManagedTraining Services business that ended the year with 39 global customers of which eightlogos were added in FY 2018 alone. In FY 2018 CLG continued investing in buildingcapacity for large comprehensive deals gearing up for future opportunities.
Important moves for CLG in FY 2018 included its acquisition of Eagle ProductivitySolutions a globally reputed company which has expanded the wingspan of its trainingcapability to cover rollouts of Cloud-based enterprise applications. During the year wealso entered into strategic relationships with Cornerstone OnDemand a global leader inCloud-based learning and human capital management software as well as EdCast theaward-winning AI-powered Knowledge Cloud provider with customers that include GE HPEDell EMC and Accenture.
Despite being impacted by headwinds in IT and banking segment hiring our Skills &Careers Business (SNC) continued to increase reach and improve efficiency through a betterleverage of technology in learning. The segment was buoyed by its Beyond ITrevenues our StackRoute DigiNxt and Training.com initiatives that saw strong tractionand our super five new Career Series programs that expanded NIITs product portfolioand helped revive growth. These included courses in Accounting and Business AnalyticsBanking and Finance Data Analytics and Predictive Modelling Digital Marketing andBranding and Full Stack Software Engineering. Another highlight for SNC was the TPaaS(Talent Pipeline-as-a-Service) offering we launched for corporates which covered allaspects related to on-boarding new talent.
StackRoute incidentally received an overwhelming response from IT companies and wasadopted by seven corporate customers in FY 2018 as compared to previous years.
During FY 2018 SNC entered into a strategic partnership with UP! Your Service toenable its Corporate Learning portfolio to deliver internal and external cultures ofService Excellence. Additionally it announced fresh batches of advanced programs in DataSciences Digital and Social Media Marketing on our Training.com platform which enrolledover 3500 learners during the year. SNC recorded net revenues of Rs. 266.9 crores in FY2018.
Our schools business under the umbrella of our wholly-owned subsidiary MindChampionLearning Systems continued to exit from the capital-intensive government schools segmentduring FY 2018 while successfully completing existing contracts. MLSLs margins wereimpacted by closing costs in large government schools completed during the year thoughcost management and a shift of mix towards private schools helped in partial recovery. Thesubsidiarys go-forward business grew 2 percent YoY as it signed contracts with 668private schools for its nGuru suite of products. During the year SLG recorded a revenueof Rs. 59.3 crores and released new curriculum products in Maths Science and English.MLSLs Practice Plus a revolutionary school learning solution
launched in FY 2018 gained traction helping students learn and master concepts throughpractice and assessment. The platform was adopted by over 600 schools and today has over190000 learners using the platform for assessing their learning.
Our FY 2018 pride story saw us rank among Indias Most Trusted IT TrainingBrand by Brand Trust Report 2018 and get named in TrainingIndustry.coms Top 20 listsof training outsourcing companies as well as training content and gamification companiesin 2017. During FY 2018 NIIT bagged 20 Brandon Hall Group HCM Excellence Awards jointlywith customers (Independent recognitions also came the way of MLSL and Training.com duringthe year.)
Having remained on the growth track in FY 2018 NIIT has set itself up for greaterperformance improvements in its corporate learning skills & careers and schoolbusinesses. While CLG is expected to achieve accelerated growth over the next year owingto higher outsourcing of L&D by global companies it will also continue to reap thebenefits of large-sized annuity based MTS engagements. In the year ahead CLG is expectedto increase both deal flow and the average size of the contracts with new and existingcustomers. CLG aims to achieve this by investing in innovation that heightens the customerexperience providing advisory services that drive thought leadership driving Sales andMarketing and exploring inorganic opportunities to add new capabilities.
Our Skills & Careers business will continue to focus on and expand its existingmainstays-DigiNxt Training.com and StackRoute. Having worked closely with leadingcorporates for skilling and upskilling their workforce StackRoute will continue to helptop IT professionals to evolve into tech-IP creators.
DigiNxt meanwhile will help industry build a large pool of digital transformationtalent while Training.com will position itself strongly in the market through itsprograms in Digital Marketing and Data Science. SNCs super five courses and TalentPipeline as a Service will add greater strength to NIITs wide range of offerings.
Having shifted focus to the asset light and IP driven private school business ourschool business will continue to consolidate its presence in this segment going forward.As government contracts end NIIT will improve liquidity and its ROCE profile. ThePractice Plus platform is also expected to drive stronger growth in private schools.
In the year ahead NIIT will continue to lower its risk profile through itsenterprise-wide risk management mechanism and achieve an optimum balance between risks andrewards while maximising value for our shareholders that is each one of you.
I would like to personally thank you all for your unstinting support which has enabledNIIT to deal with the vagaries of the market and ensuing challenges. I assure you that aswe look towards the future with an unmatched portfolio of offerings we expect to deliverhigh impact. In fact we aim to play a transformational role in the markets where we arepresent helping individuals and enterprises across the globe to achieve their fullpotential and making all our stakeholders proud.
Rajendra S Pawar
Chairman NIIT Ltd.