NIIT Technologies Ltd's Q3FY19 consolidated net profit declines 10.4% qoq to Rs100cr : Beats Estimates

The company’s consolidated revenue stood at Rs972cr, up 7.1% qoq and 28.5% yoy.

Jan 18, 2019 02:01 IST India Infoline Research Team

NIIT Technologies Ltd Q3FY19

Consolidated Results Q3FY19: (Rs in cr)

Q3FY19 QoQ (%)
Revenue 972 7.1
EBIT 149 13.4
EBIT Margin (%) 15.4 85
Net Profit (adjusted) 100 [10.4]
***EBITDA margin change is bps

NIIT Tech reported better than expected revenue and EBIT for Q3FY19, except PAT which missed estimates due to higher than expected tax rate. Revenue grew by 7.1% qoq to Rs972cr against median consensus estimate of Rs966cr. EBIT came in at Rs149cr, up 13.4% qoq against median consensus estimate of Rs143cr. EBIT margin expanded by 85bps qoq to 15.4%. Reported PAT fell by 10.4% qoq to Rs100cr against median consensus estimate of Rs111cr.
  • Revenue in constant currency terms grew by 4.2% qoq in Q3FY19.
  • Banking and Financial Services (BFS) vertical was up 1.7% qoq aided by the signing of a USD20mn+ deal in the US. The company added one new account during the quarter.
  • Insurance was up 9.8% qoq aided by growth in large US accounts. The company added three new accounts during the quarter and signed a USD20mn+ deal with a US based customer.
  • Travel & Transportation (T&T) was up 5.4% qoq aided by growth in large EU and US accounts. The company added two accounts during the quarter.
  • Others vertical was up 8.9% qoq aided by the scale up in the GIS segment. The company added four new accounts during the quarter.
  • Geographically, growth in Americas was strong (+7.1% qoq) aided by growth across all verticals. EMEA grew by 3.9% qoq due to digital engagements and IMS execution. RoW grew by 13.4% qoq due to scale up in GIS vertical.
  • As for service lines, Application Development & Management grew by 7.1% qoq aided by strong growth across BFS, Insurance and T&T. IMS was up 7.1% qoq due to ramp up in recently acquired accounts in EMEA.
  • Digital revenues at 29% of overall revenue, grew by 12% qoq.
  • Gross margins improved by 36bps qoq, while SG&A was down 24bps qoq leading to EBIT margin expansion.
  • Order intake of USD165mn was secured during the quarter and the company added ten new logos. Order book executable over the next 12 months expanded to USD375mn from USD363mn in Q2FY19.
  • Utilizations fell by ~140bps qoq to 79%. Attrition rate increased by ~90bps qoq to 11.7%.
  • Revenue from top-5 and top-10 clients both grew by ~7% qoq each.
Beat on the EBIT was due to improvement across business verticals. PAT was lower due to a ~600bps qoq rise in tax rate.

Technical View:

NIIT Technologies Ltd is currently trading at Rs. 1,237.60, up by 13.8 points or 1.13% from its previous closing of Rs. 1,223.80 on the BSE.
The scrip opened at Rs. 1,223 and has touched a high and low of Rs. 1,237.60 and Rs. 1,204.15 respectively. So far 12,63,023 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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