NIIT Tech falls over 5% as June quarter results disappoints

MUMBAI: Shares of NIIT Technologies fell over 5 per cent in trade after the company disappointed the street with its June quarter results.

NIIT Tech reported a net profit of Rs 43.2 crore for the quarter ended June 2014, down 18.7 per cent, against a net profit of Rs 53.2 crore in the corresponding quarter last fiscal.

Revenues grew to Rs 577.6 crore, up 6.6 per cent in June 2014 quarter as compared to Rs 541.9 crore in the same period last fiscal.

“In constant currency, revenues remained flat sequentially during the quarter,” said Mr. Arvind Thakur, CEO and Joint MD, NIIT Technologies.

“Operating Margins declined 171 bps to 13.4 per cent primarily on account of wage increase during the quarter”, he added.

The results were below expectations, say analysts at Prabhudas Lilladher. The brokerage has lowered its target price to Rs 440 from Rs 510 earlier.

“Growing fresh order intake and improved deal pipeline gives revenue visibility; however, clients’ specific issues marred growth at topline and bottomline over the last two quarters. We expect stock to remain under pressure in the near term. But, we are factoring in improved revenue momentum in H2FY15 along with margin uptick,” the report said.

At 11:15 a.m.; the stock was at Rs 380.65, down 6.98 per cent, on the BSE. It touched a high of Rs 408.20 and a low of Rs 376 in trade today.