NIIT Technology Q2 profit rises 17.2%

NEW DELHI: NIIT Technologies has reported a healthy 17.2% sequential growth in its net profits in September quarter on the back of demand revival in its major market, the United States.

The mid-sized IT firm said that its consolidated revenue grew 8.4% this quarter to Rs 587.3 crore as compared to the quarter before. Analysts were expecting sales to expand by 9%. Profits stood at Rs 62.4 crore.

"It is encouraging to see an uptrend in the US market which has contributed to the growth in this quarter," said Arvind Thakur, CEO, NIIT Technologies. "The employment rates there is now hovering around 7.5% and GDP growth is around 2.5% which is almost double as compared to earlier quarter."

Travel the transportation segment traditionally has been the strongest vertical for NIIT Technologies. This vertical contributed 37% to the company's revenue, up from 36% in June quarter.

The company added three new clients from the travel and transportation industry. "These include a global carrier and a contract of $10 million from a mid-sized regional airline," said Thakur. The fresh orders amounted to $84 million taking the orders executable in next 12 months to $248 million.

However, NIIT said that Europe is still soft except for UK showing some signs of improvement.

NIIT has also made major management changes in this quarter. They created a new position of chief operating officer and brought in Sudhir Chaturvedi from Infosys. He will be handling the global sales and delivery for the software services. "Sudhir's induction enhances leadership bandwidth to execute on the next phase of the company's growth," said Rajendra S Pawar, chairman, NIIT Technologies.

At present, India contributes 16% to its total revenues but NIIT Technologies the contribution of domestic market to decrease as US market revives.

Headcount at the company saw a net reduction of 190, taking the overall count to 8,017. Employee attrition during the quarter remained at 12.4%.

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