Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NIIT Ltd (BOM:500304, Financial) reported a 10% quarter-on-quarter and 11% year-on-year increase in revenue for Q2 FY25, indicating a strong recovery trajectory.
- The company has successfully incorporated generative AI into all its offerings, launching new initiatives that have received encouraging responses.
- Profit after tax increased by 53% quarter-on-quarter and 11% year-on-year, showcasing improved profitability.
- NIIT Ltd (BOM:500304) has expanded its reach with new customer additions across product lines and innovative programs.
- The company won a record 18 Brandon Hall Awards, highlighting its excellence and recognition in the learning industry.
Negative Points
- NIIT Ltd (BOM:500304) is still in an investment cycle, which affects overall profitability despite some business segments being profitable.
- The company faces challenges due to the hiring freeze in the IT sector, impacting its new hire training programs.
- There is a dependency on the timing of order execution, which could affect the ability to meet the upper end of revenue guidance.
- Headcount has been reduced due to subdued early career programs, reflecting adjustments to the current market realities.
- The company anticipates low single-digit margins for Q3 due to planned investments, indicating pressure on profitability in the short term.
Q & A Highlights
Q: What are the key drivers for NIIT's revenue outlook of INR380 crores to INR400 crores, and how does seasonality affect the business?
A: Vijay Thadani, Executive Vice Chairman and Managing Director, explained that the revenue outlook is driven by a strong pipeline and order book, particularly from GCCs and select GSIs. Seasonality typically affects Q3 negatively due to holiday seasons, but the current recovery phase may offset this, allowing for continued growth.
Q: Can you provide insights into the re-launch of the gNIIT program and its acceptance?
A: Vijay Thadani mentioned that the gNIIT program is currently being tested under the radar. The program aims to offer flexibility for multiple career options and enhance employability by integrating college education with skill development.
Q: How is NIIT targeting sectors beyond BFSI and technology with its offerings?
A: Vijay Thadani highlighted that NIIT is exploring opportunities in sectors like manufacturing and energy transition, leveraging generative AI to offer personalized learning experiences and specialized training in areas like Industry 4.0 and EVs.
Q: What is the status of NIIT's TPaaS offering, and how is it performing?
A: Vijay Thadani clarified that while TPaaS is performing well, the combined metric with StackRoute, which focuses on new hire training, has been subdued due to reduced hiring in the technology sector.
Q: What are the growth expectations for H2, and how will headcount trends change?
A: Pankaj Jathar, CEO, stated that both tech and BFSI sectors are expected to grow in H2. Headcount, which has been reduced due to reorganization, is expected to increase as the company gears up for new product offerings and market demands.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
