NIIT Technologies Q1 profit down 7.5%
NIIT Technologies today reported 7.5 per cent decline in its net profit at Rs 53.2 crore for the first quarter ended June 30, 2013.
By J Srikant, ET Bureau | Updated:
NEW DELHI: Mid-sized software services company NIIT technologies on Tuesday said its first-quarter profits declined 7.5% compared to the same period last year due to higher tax expenses.
Its revenues, on the other hand, grew 0.9% sequentially to Rs 541.9 crore in line with street estimates. On a yearly basis, the company’s revenues reported a 15.4% growth.
“The prime reason for this decline is the drawing of dividend from our overseas subsidiaries, as a result of which we had to pay a dividend tax of Rs 5.4 crore,” said Arvind Thakur, CEO, NIIT Technologies said referring to drop in profits.
The Noida based company said it added five new clients during the quarter all of which were in the Travel and Transportation segment, including two from India. The travel and transportation sector contributed about 36% to NIIT’s revenues during the quarter, while customers in banking, financial services and insurance sectors contributed 30 percent. The company got 7% of its revenues from the manufacturing sector.
NIIT’s operating margins saw a 2.02% decline on a quarterly basis to 14.4%. Thakur said this was mainly on account of wage hike related expenses. NIIT announced a wage hike of 8% to off-shore employees and 3% to those on-site in April.
Rajendra S. Pawar, Chairman of NIIT Technologies said the company is seeing signs of recovery in the US market and a strong traction in the domestic IT market, however, Europe continues to exhibit weakness. The company received fresh contracts worth Rs $145 million during the quarter leading to $263 million worth of orders that are executable over the next one year. India contributes about 14% to NIIT’s revenues.
Rupee, which fell about 10% during the April-June quarter did not reflect in NIIT’s first quarter numbers as the company kept its effective currency rate for the quarter at Rs 55.17. “We billed the customer at the beginning of June, where as the decline of the Rupee started mid-june. That is why it is not reflecting on the numbers,” Thakur added.
Its revenues, on the other hand, grew 0.9% sequentially to Rs 541.9 crore in line with street estimates. On a yearly basis, the company’s revenues reported a 15.4% growth.
“The prime reason for this decline is the drawing of dividend from our overseas subsidiaries, as a result of which we had to pay a dividend tax of Rs 5.4 crore,” said Arvind Thakur, CEO, NIIT Technologies said referring to drop in profits.
The Noida based company said it added five new clients during the quarter all of which were in the Travel and Transportation segment, including two from India. The travel and transportation sector contributed about 36% to NIIT’s revenues during the quarter, while customers in banking, financial services and insurance sectors contributed 30 percent. The company got 7% of its revenues from the manufacturing sector.
NIIT’s operating margins saw a 2.02% decline on a quarterly basis to 14.4%. Thakur said this was mainly on account of wage hike related expenses. NIIT announced a wage hike of 8% to off-shore employees and 3% to those on-site in April.
Rajendra S. Pawar, Chairman of NIIT Technologies said the company is seeing signs of recovery in the US market and a strong traction in the domestic IT market, however, Europe continues to exhibit weakness. The company received fresh contracts worth Rs $145 million during the quarter leading to $263 million worth of orders that are executable over the next one year. India contributes about 14% to NIIT’s revenues.
ADVERTISEMENT
Rupee, which fell about 10% during the April-June quarter did not reflect in NIIT’s first quarter numbers as the company kept its effective currency rate for the quarter at Rs 55.17. “We billed the customer at the beginning of June, where as the decline of the Rupee started mid-june. That is why it is not reflecting on the numbers,” Thakur added.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
