BackNIIT Tech April-June profit flat as higher taxes hurt
NIIT Tech April-June profit flat as higher taxes hurt
Premium
New Delhi: NIIT Technologies Ltd on Tuesday posted a flat profit for April-June, as a spurt in tax rates due to expiry of the Software Technology Parks of India (m) scheme and seasonal salary hikes hurt profitability.
The software services firm said its consolidated profit remained mostly flat at ₹ 14.2 crore, despite a revenue growth of about 13% to ₹ 329 crore for the period.
The company spent about 26.5% of its profit in taxes, compared with about 11.5% in Jan-March and about 14.5% in the corresponding quarter a year ago.
STPI scheme was started in 1991 to boost software exports. Among other benefits, it provided a 10-year income tax exemption for units situated in software technology parks.
The company has commissioned a new campus in greater Noida special economic zone, on the outskirts of New Delhi, and more business there will gradually reduce the tax rates over the next year, chief executive officer Arvind Thakur told reporters.
Many small and mid-cap IT firms are expected to see a dent for April-June as many are yet to migrate to special economic zones to continue enjoying some sort of tax benefits.
NIIT Tech’s new SEZ campus is built over 25 acres and can house 3,000 people. The company plans to enhance its capacity to over 12,000 over the coming years, it said in a statement.
NIIT Technologies was spun off from NIIT Ltd , an Indian talent development firm, in 2004. The latter still owns about a quarter of the spun-off firm.
The company added 425 employees in April-June, its highest ever for any quarter, and has fresh orders of about $86 million.
“Domestic market is shrinking. But from US and Europe, new business will come. Domestic market also presents a huge opportunity in the future," Thakur said.
Shares in NIIT Tech, valued at about ₹ 1220 crore, closed down 1.65% at ₹ 202.75 rupees in a Mumbai market that rose 0.80%.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
