NIIT TECHNOLOGIES

The financial performance for the first quarter ended 30th June 2008 of NIIT Technologies has not been too encouraging. On a standalone basis, the profit margins have dipped considerably while on a consolidated basis, it has just about managed to hold things together. On standalone basis, QoQ, on a maginal 0.36% rise in net sales at Rs.124.26 crore, EBIDTA was down 41% but PBT was down 49% and PAT was down 55% at Rs.24.44 crore. OPM slipped down from 49.52% to 29.04% and NPM slipped from 44.04% to 19.67%. On a YoY basis, though net sales rose 46%, EBIDTA also managed to show a 4.3% improvement, PBT slipped 6.54% and PAT by 15%. And if we look at the consolidated performance, YoY, total revenue grew 7% and operating profit was also up 7%. It maintained its OPM at 18.6% and PAT was exactly at the same amount – Rs.35.10 crore. Europe, Middle East and Africa (EMEA) provided maximum share of business, representing 52% of total revenues, while the Americas contributed 30% of overall revenues during the quarter. The rest of the world contributed 18% of the revenues. Banking, Financial Services & Insurance (BFSI) vertical contributed 42%; Travel, Transportation & Logistics (TTL) contributed 28% and Retail & Manufacturing contributed 13% of the revenues. The highest growth was observed in the TTL vertical. The profitability was hit mainly on account of hedging losses. The company had taken a hedge position of about US$ 222 million. These were against forward contracts at an effective rate of Rs.41.10 to a dollar. Due to this, revenue was impacted by Rs.4.30 crore on account of losses accounted for as a result of these hedges. Apart from this, the company has also taken a loss on ineffective hedges, to the tune of Rs.6.30 crore. During the quarter the company acquired 6 new customers and its order intake was to the tune of US$43 million as against US$40 million in Q1FY08. The company’s development of the new platform – ROOM Solutions in the UK is stated to be on track and the phase I is expected to be operational in current quarter. This new platform is expected to earn revenues for the company from the second half of the current fiscal. source