Sapnesh Lalla, CEO, NIIT Ltd.

The company has charted a focused business strategy to address Digital Transformation needs for individuals and corporate customers by offering training and consulting to help them re-invent themselves & their organizations.

Dec 21, 2018 04:12 IST India Infoline News Service

Sapnesh Lalla, NIIT
Sapnesh Lalla, CEO, NIIT Ltd., a global leader in skills and talent development, offering broad-based education and training solutions to corporations, institutions, and individuals in over 40 countries. Prior to his appointment as CEO, Sapnesh served as the President of NIIT’s Global Corporate Business, which constitutes ~70% of NIIT’s total business. He led critical initiatives for the expansion of the company in North America and Europe including significant acquisitions such as Cognitive Arts and Element K. Under his leadership, NIIT has grown to become a leading global learning outsourcing solutions provider with its Managed Training Services offering. Sapnesh is now in his 25th year at NIIT and has served in India and USA. 
 
In an interaction with Shweta Papriwal, Editor, IIFL, Sapnesh Lalla, CEO, NIIT Ltd., said “We expect business to continue on its journey of improving growth and profitability.”
 
Kindly elaborate on the products offered by NIIT.
NIIT offers training and development solutions to Individuals, Enterprises, and Institutions. NIIT has three main lines of business across the globe – Corporate Learning Group, Skills & Career Business, and MindChampion Learning Systems Limited.
 
With a strong focus on assuming a leadership role in the Digital Learning World and to further accelerate NIIT's growth and profitability, the company has charted a focused business strategy to address Digital Transformation needs for individuals and corporate customers by offering training and consulting to help them re-invent themselves & their organizations.
 
The Training.com learning platform, is a pioneering initiative for advanced career programs, which are delivered live by industry experts in an immersive and interactive online mode, combining instructor-led classrooms with the convenience of accessing the training sessions from anywhere. The programs are targeted at working professionals who want to take their careers to the next level by enhancing their knowledge of the latest concepts through programs offered from premier institutes like IIM Calcutta, DMI Ireland, and edX.
 
Other key offerings include StackRoute which focuses on creating Digital Innovators by building an elite breed of full-stack programmers; DigiNXT which addresses the urgent need to help India's IT Services industry source fresh staff as well as retrain 4mn of their existing staff into Digital Developers.
 
We have also unveiled a series of aspirational Career Programs guided by the choices of the industry to address the changing workforce needs that digital transformation has brought forth. On offer are aspirational programs in the fast-evolving digital marketing & branding, data analytics & predictive modelling, financial services & futuristic IT streams. These programs have been designed to help undergraduates and graduates build a challenging career in the digital economy. NIIT plans to train 60,000 youth over the next two years in these new-age career programs.
 
NIIT announced a first-of-its-kind strategic initiative - Talent Pipeline as a Service (TPaaS), to ensure the reliable availability of specifically skilled talent to global organizations to match the pace of expansion in today’s fast changing and uncertain business environment.  NIIT will train around 1,00,000 youth in three years for aspirational career opportunities in leading corporates in the IT & BFSI sectors through this initiative. TPaaS is garnering positive response from the industry and will be a focus area for the company.
 
What is your geographical presence like in India and globally? Which is the most revenue contributing geography?
We offer multi-disciplinary learning management and training delivery solutions to corporations, institutions, and individuals in over 40 countries. In India, we have about 200 education centres spread across the country.
 
Overall - The US is the highest contributing geography followed by Europe. USA + Europe contributed 71% in Q2, India was 22%, and RoW was 7%.
Corporate Learning Group or CLG is the largest contributor to NIIT’s revenue and has had strong growth over the last few years as NIIT has moved away from the projects business to Managed Training Services. At the end of Q2, CLG had a visibility number of $226mn and 40 MTS customers.
 
During the Q2, the Corporate Learning Group (CLG) recorded a net revenue of Rs161.6cr up 28% yoy. It added one new MTS customer in Q2, renewed contract with one, and expanded business with three existing customers.
 
Kindly throw some light on the Skills & Careers business. What are the offerings in this business? What is your outlook for this going forward?
The Skills & Career Business delivers a diverse range of learning and talent development programs to millions of individual and corporate learners. Some of the key offerings of Skills & Career Business are as follows:

Career Programs for graduates and graduating students - Career Programs are guided by the choices of the industry to address the changing workforce needs that digital transformation has brought forth. On offer are aspirational programs in the fast-evolving Digital Marketing, Data Analytics, Financial Services & Futuristic IT streams.

Talent Pipeline as a Service (TPaaS) – TPaaS is a first-of-its-kind strategic initiative, to ensure reliable availability of specifically skilled talent to global organizations to match the pace of expansion in today's fast changing, uncertain business environment. NIIT has specifically created bespoke career programs for leading corporates in the IT & BFSI sectors as per their business needs.

Stackroute - StackRoute focuses on full-stack technologies (Java spring, .NET code, JavaScript – MEAN/MERN), emerging architectures, and design trends in the Digital Ecosystem. As a digital transformation partner, StackRoute works with large IT services and product engineering companies in building multi-skilled high performing full-stack developers.
 
Talent Pipeline as a Service (TPaaS) has 8 mandates from key customers. StackRoute and Training.com are gaining traction with customers, and the new career programs have shown an encouraging early offtake. Going forward, each will drive growth.
 
How is the placements vertical performing? What is the percentage of placements provided? Which are the top companies where you provide placements? 
At NIIT, 10 students are being placed everyday. In the period from August 2018 to October 2018, we have placed 721 students from IT and 341 students from BFSI. Top recruiters are HDFC Bank, Kotak Mahindra Bank, Yes Bank, HDB Financials, Pinkerton, ATS, Spectrum Consultants, and many more.
 
How is the empanelment working for private as well as government schools? Which modules does NIIT offers to schools? What is the contribution of this segment to the overall revenue?
MindChampion Learning Systems Limited (MLSL) is providing technology-based learning to around private schools across India, reaching out to more than a million students. MLSL builds on the strong lineage of NIIT's School Learning business. The company is currently working with over 1,200 schools.
 
The futuristic NIIT Nguru range of learning solutions for schools comprises the following:
 
IT Wizard - An end-to-end teaching-learning solution from the pioneers of IT education in India, IT wizard aims at revolutionizing the way IT is being taught. IT Wizard Plus is designed to create an early exposure of technology amongst students.
 
Math Lab – Math Lab aims to change the way Mathematics has been taught in schools. This revolutionary approach towards student-centric explorative learning takes Mathematics hands-on, helping students learn the concepts in a fun & playful manner.
 
Interactive Classroom: ICR provides digital learning content for mainline subjects that teachers can use to improve learning inside the classroom.
 
Quick School - An integrated and comprehensive ‘Education Resource Planning’ software developed specifically for schools, the software is designed for the ease of use and developed keeping in mind the requirements of the school management.
 
Recently. MLSL launched "MY PALS ARE HERE" an engaging series based on Singaporean teaching methodology. Introduced in association with Marshal Cavendish Education, the series has been designed to build a strong foundation of mathematics and strengthen a child's conceptual understanding of the subject.
 
During Q2, MLSL added 51 school contracts. It also significantly enhanced the curriculum for NIIT Nguru MathPlus - a unique solution designed for fostering mathematical skills.

NIIT Nguru Practice Plus, an online solution for K-12 that enables continuous practice and assessment, now has over 4.1 lakh registered users and ~1.5 lakh parents.
 
Is there any capex planned for the next 2-3 years?
The planned capex includes investments in IP including courses, platforms, and automation tools and facilities for upcoming years.
 
How was the company's performance in Q2? What is your outlook for FY19?
During the second quarter, the company recorded a PAT of Rs25.9cr, up 104% yoy, and Net Revenue of Rs228.5cr, up 10% yoy. EBITDA was recorded at Rs21.9cr, up 23% yoy. Operating Margin stood at 10%, up 105bps yoy.
 
The Corporate Learning Group (CLG) recorded a net revenue of Rs161.6cr, up 28% yoy. It added 1 new MTS customer in Q2, renewed contract with 1, and expanded business with 3 existing customers. The Skills & Careers Group recorded a net revenue of Rs61.7cr and MindChampion Learning Systems Limited (MLSL) registered a net revenue of Rs5.1cr.
 
We expect business to continue on its journey of improving growth and profitability. 

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