NIIT Tech Q1 profit falls 47.5% to Rs28.6 crore

NIIT Technologies on Friday reported 47.5% decline in net profit to Rs28.6 crore for the first quarter, on account of a one-time provision of Rs36.1 crore


NIIT Technologies saw its revenues growing 4.5% to <span class='WebRupee'>Rs.</span>670.7 crore in the said quarter from <span class='WebRupee'>Rs.</span>642.1 crore in the April-June 2015 quarter, as per Indian Accounting Standard (IAS). Photo: Pradeep Gaur/Mint
NIIT Technologies saw its revenues growing 4.5% to Rs.670.7 crore in the said quarter from Rs.642.1 crore in the April-June 2015 quarter, as per Indian Accounting Standard (IAS). Photo: Pradeep Gaur/Mint

New Delhi: NIIT Technologies on Friday reported 47.5% decline in net profit to Rs.28.6 crore for the first quarter ended 30 June, on account of a one-time provision of Rs.36.1 crore. NIIT’s net profit stood at Rs.54.4 crore in the year-ago period.

The company saw its revenues growing 4.5% to Rs.670.7 crore in the said quarter from Rs.642.1 crore in the April-June 2015 quarter, as per Indian Accounting Standard. “We have made a provision of Rs.36 crore for amounts outstanding in respect of a government contract, where the programme has been put on hold to resolve project issues,” NIIT Technologies CEO and Joint MD Arvind Thakur said.

During the quarter, NIIT Tech’s domestic business declined 26.5% due to seasonality in Geographic Information Systems (GIS) and lower revenues from government clients. It represented 8% of the company’s overall revenues. The company’s international business grew 0.5% during the quarter.

Americas accounted for 48% of the revenues with strong growth coming from banking, financial services and insurance (BFSI). Europe, the Middle East and Africa’s (EMEA) share declined to 32% mainly due to reduced business in the UK insurance sector, while Asia Pacific accounted for 12% of the revenues.

Digital business witnessed strong traction and contributed to 18% of revenues, Thakur said. Asked about the impact of Brexit, Thakur said the company is seeing impact on the insurance vertical.

“We do not anticipate much impact but about seven per cent of our business in the UK, which is insurance, will be impacted,” he added. BFSI grew 3.2% sequentially during the quarter increasing the revenue share to 42%, while travel and transportation accounted for 32% share.

Manufacturing, media and others contributed to 24%, while that from government was 2% during the quarter. “Order intake during the quarter was $101 million resulting in $307 million of order book executable over the next 12 months,” he said.

The company added 4 new customers during the quarter, including a tier I airline and a regional insurer in the US. In EMEA, the company secured an IMS engagement with a digital security firm. The company had a total head count of 9,022 at the end of the said quarter, while the attrition was 13.4%.

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