NIIT Q3 profit slides 56%, firm blames demonetisation
NIIT’s net revenue during the December quarter rose 2% to Rs267.3 crore as compared to the corresponding period of the previous year
New Delhi: Skills and talent development company NIIT Ltd on Friday posted a 56% fall in consolidated net profit for three months ended 31 December at Rs6 crore, hit hard by demonetisation.
Profit after tax stood at Rs13.7 crore in the year ago period. Net revenue during the December quarter rose 2% to Rs267.3 crore as compared to the corresponding period of the previous year.
Earnings before interest, tax, depreciation and amortization (EBITDA) halved to Rs8 crore against Rs16.4 crore during the year-ago period. The company said that its Skills and Careers Group (SNC) recorded a net revenue of Rs72.4 crore, down 13% year-on-year during the just-ended quarter “impacted by low cash circulation due to demonetisation.” “Historically, 70% of NIIT’s India retail clients pay fees in cash, with even higher percentages in the tier 2/3/4 towns,” the statement added.
The Corporate Learning Group (CLG) which offers managed training services or MTS to companies in North America, Europe, Asia, and Oceania, recorded net revenue of Rs177.4 crore during the quarter, up 12% over same period of the previous year, and with constant currency growth of 14%.
It added three new clients in third quarter of which two were MTS customers, taking the total number of MTS customers to 32. During the quarter, NIIT announced that its current MTS contract with a global pharmaceutical company headquartered in West London, UK, has been extended for a further four years.
“During this fiscal year, the CLG business has added 5 new multi-year contracts and 4 renewals in the telecom, oil and gas, life sciences, technology, manufacturing, energy, and mining sectors,” it said.
For the first nine months of the fiscal, the company’s revenue stood at Rs826.1 crore, up 8% over the year-ago period while net profit was at Rs34.9 crore. “Excluding closed legacy businesses, year to date revenue from all focus go-forward business, grew at a robust 11%,” the statement said. During the December quarter, the company entered into an exclusive partnership with US-based OpenMatters (led by Barry Libert), towards driving digital transformation for tier-1 organisations in India, China and emerging markets.
“This initiative will enable the top leadership of top tier firms to become digital leaders who will drive digital transformation initiatives that lead to greater growth and value. In a related move, Barry Libert has been appointed as a Digital Advisor to the NIIT Board,” the statement pointed said.