NIIT Tech Nets Dip By 9.2% in Third Quarter

NIIT Technologies is one of the mid-tier IT services firm which had recently reported 9.2% decline in its net profit which now stands at Rs. 48.2 crores at the completion its third quarter. Comparing it with the third quarter of the last year, its revenue shows a minimal increase of just 1.4% with at Rs. 595.3 crore while it posted net profit of 53.1 crore last year for same quarter. The third quarter of each year is seen as a least productive and rather weak quarter by financial analysts.

Company Grows By Just 1% on Sequential Basis

On the sequential basis NIIT net profits had registered a growth by 20.02% which a result of improvement in the operating margins, higher incomes and lower depreciation rates during the months of July-September 2014. NIIT Technologies CEO and Joint MD, Arvind Thakur, had stated that NIIT had seen its operating margins improve by 15 basis points sequentially to 14.5% as a result of productivity initiatives in the third quarter. In the constant currency NIIT grew by one percent sequentially during the last quarter.

The company’s had even seen a dent in its operating margins because of the specific engagement in the beginning of the year which even explains the decline in net profit at the year-end. Regarding the overall demand of the NIIT IT services, Thakur had opined that the company had seen a robust growth in the United States but it weakness factor continues in the Euro Zone while excitement factor remains high in India.

NIIT Expand Its Revenue Generation

NIIT has seen healthy growth and expansion of revenues in Asia Pacific (APAC) and India. Most the revenue being generated this quarter is being pointed towards the execution of large orders which were secured by the company earlier this year. Now company’s revenue share had increased to 21 percent in this particular region. Whereas the Americans had contributed by 44% to the revenue while the Europe, Middle East and Africa counted for the 35 of the company’s revenue.

During this quarter NIIT had secured $109 million worth of new orders. Around 55% of new business was secured in the US. NIIT Technologies had even added five new customers during the third quarter out of which two are in US and one each coming from India, APAC and EMEA.

NIIT Supposed To Have Strong and Stable Last Quarter

The decline in the oil prices globally is helping to the cause of the NIIT as travel constitutes the largest chunk of the company’s revenue. The higher other income is accounted by the revaluation of assets and liabilities. NIIT is holding up strong regardless of the current volatility in the currency as due to gains from the dollars but incurring losses from the Euro and GBP.

However NIIT had frozen its hiring procedures and suffered a decline of 229 people in the workforce which is being attributed to the natural attrition rate of 15%. NIIT would begin hiring again from the current quarter in order to boost its workforce.