NIIT Tech Q1 net falls 47.5% to Rs 28.6 cr

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New Delhi | July 15, 2016 6:31 PM

NIIT Technologies today reported 47.5 per cent decline in net profit to Rs 28.6 crore for the first quarter ended June 30, on account of a one-time provision of Rs 36.1 crore.

niit technologies“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. (Source: Website)

NIIT Technologies today reported 47.5 per cent decline in net profit to Rs 28.6 crore for the first quarter ended June 30, 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 per cent 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 per cent due to seasonality in Geographic Information Systems (GIS) and lower revenues from government clients.

It represented 8 per cent of the company’s overall revenues.

The company’s international business grew 0.5 per cent during the quarter. Americas accounted for 48 per cent 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 per cent mainly due to reduced business in the UK insurance sector, while Asia Pacific accounted for 12 per cent of the revenues.

Digital business witnessed strong traction and contributed to 18 per cent 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 per cent sequentially during the quarter increasing the revenue share to 42 per cent, while travel and transportation accounted for 32 per cent share.

Manufacturing, media and others contributed to 24 per cent, while that from government was 2 per cent during the quarter.

“Order intake during the quarter was USD 101 million resulting in USD 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 per cent.

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