NIIT Technologies’s Q2 profit falls 9% 58.9 crore; revenue up 2%
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New Delhi: IT firm NIIT Technologies Ltd on Saturday reported better-than-expected revenue of Rs.692.2 crore in the September quarter helped by growth in its banking, financial services and insurance business (BFSI) business from United States.
The company’s net profit, however, fell about 9% to 58.9 crore in the second quarter compared to a year earlier due to decline in higher margin UK insurance business as well as higher tax rate.
NIIT Technologies’s revenue rose by 2% year-over-year, helped by growth in BFSI from the US as well as higher traction in travel and transportation business.
Analysts on average had expected revenue of Rs.689.9 crore, according to Bloomberg.
The company revenue rose by 3.3% sequentially and it secured fresh orders of $143 million during the quarter.
Revenue from US rose 7.9% sequentially and accounted for nearly half of company’s total revenue followed by Europe, the Middle East and Africa (EMEA) with 33% of total revenue.
During the reported quarter, the company added 3 new customers, 1 in the US and 2 in EMEA.
Among various industry segments, BFSI 3.4 % sequentially grew by led by Insurance in US with both existing and new clients scaling well.
Revenue from travel and transportation business rose by 6% sequentially resulting in revenue share of 33%.
“In last quarter we had some client specific issues, which are now behind us and now we saw growth across all our clients in the travel space,”said Arvind Thakur, chief executive officer of NIIT Technologies.
NIIT’s India business continued its decline with revenue falling 7.2% sequentially due to lower business from Indian government.
“It (India business) impacts cash flow because it is very difficult to collect money from the Indian government...by defocusing on Indian government we have been able to dramatically reduce the outstandings that we have to the cashflow,” Thakur said.
NIIT’s results come amidst a rough quarter for the Indian IT industry as India’s top two firms reported poor results over the week raising concerns about growth in the rest of the year.
Tata Consultancy Services Ltd on Thursday reported weaker-than-expected revenue in what has typically been a strong quarter for the company.
India’s second biggest IT firm Infosys Ltd also cut its full-year dollar revenue forecast for the second time this fiscal, and now expects to grow between 8.2 and 9.2%, and 8-9% in constant currency terms.
NIIT’s digital business continued to expand and accounted for 19% of the total revenue.
“We have seen impact of Brexit in UK insurance business where we do significant a amount of business in Lloyd’s UK market. We don’t expect that business to grow for the rest of the year,” said Thakur, adding that its UK insurance business accounts for 10% of total revenue.