NIIT Learning Systems Ltd Management Discussions

COMPANY OVERVIEW

Trusted by the worlds leading companies, NIIT Learning Systems Limited [NIIT Managed Training Services (NIIT MTS) or "the company"] (Ticker Symbol: NIITMTS), offers high-impact managed learning and consulting solutions that weave together the best of learning theory, technology, operations, and services to enable a thriving workforce.

The NIIT MTS comprehensive suite of Managed Learning Services includes Custom Content and Curriculum Design, Learning Delivery, Learning Administration, Strategic Sourcing, and Learning Technology. The companys specialized learning solutions include AI-Powered L&D Transformation, Immersive Learning, Customer Education Services, HCM Technology and Consulting Services, Leadership and Professional Skills Training, Digital and IT Training, and Talent Pipeline as a Service.

NIIT MTS Strategic Consulting services are designed to solve the most complex challenges in talent, skills, and workforce transformation. With a team of over 700 experts and the expanded capability of the St. Charles Consulting Group, the companys consulting services include Learning & Talent Transformation, Strategic Learning & Career Interventions, Talent Technology Advisory, Workforce Skilling, Learner-Centric Experiences, and Learning & Talent Intelligence.

With a Net Promoter Score of 9.03 on 10 and a 100% contract renewal rate, NIIT MTS helps leading companies transform and reimagine their learning ecosystems while increasing the business value and impact of learning.

ENVIRONMENT AND STATE OF THE INDUSTRY

FY25 was marked by a shift in global sentiment from cautious optimism to heightened uncertainty. In its April 2025 World Economic Outlook, the International Monetary Fund (IMF) reported that global GDP grew by 3.2% in 2023, moderated to 2.8% in 2024, and is projected to slow further to 2.4% in 2025. This reflects sustained inflationary pressures, tighter monetary policy across advanced economies, and a deceleration in global trade and investment flows. Earlier expectations of interest rate reductions and improved macroeconomic stability were offset by resurgent energy prices, persistent geopolitical tensions, and renewed volatility in developed markets.

Amidst this backdrop, large enterprises in North America and Europe - NIIT MTS core customer base tightened discretionary spending, delayed non-essential programs, and renewed their focus on cost containment. This resulted in volume compression across certain existing contracts, greater deal scrutiny, and a shift toward centralized and outsourced learning models. At the same time, the structural need for upskilling and workforce transformation has become more compelling than before. According to the World Economic Forums Future of Jobs 2025 report, 63% of global companies cite skills gaps as a key challenge, while 85% plan to increase investment in workforce upskilling.

The accelerated integration of Generative AI (GenAI) has also emerged as a transformative force in corporate learning. Organizations globally are embedding GenAI in content creation, learning workflows, and performance enablement. NIIT Learning Systems Limited has responded with targeted investments in AI-driven R&D, automation, and content personalisation—positioning the Company to deliver hyper-scalable, outcome-driven learning solutions. As highlighted in Gartners 2025 L&D research, CEOs continue to prioritize growth through transformation, placing increasing strategic importance on L&D leaders to activate agile, skills-first learning cultures. With its robust capability stack, proven customer relationships, and scalable delivery model, the Company is well positioned to serve evolving enterprise needs in a more cost-conscious and tech-enabled learning environment. Analysts and customers are unified in positioning NIIT MTS as a strategic leader at pole position in leading generative AI initiatives for learning and development.

MARKET OPPORTUNITY

The global corporate training market is expected to grow to $460 billion in 2027 (Source: Research and Corporate Training Global Market Report). On an average, companies spend about 1% of their revenue on employee training. According to ATDs State of the Industry Report 2023, in North America and Europe, this represents over USD 1200 per employee (excluding the cost of employees in training), each year. About two-thirds of the spending is typically toward proprietary training so that employees can do their specific job or customers can adopt their products. This includes areas such as training on proprietary products, processes, and systems of respective companies. Close to two thirds of this spending is on internal L&D resources. Balance spending is primarily on buying off-the-shelf or NLSL standardized training courses from third parties. AllAT proprietary training needs to be created, maintained, A GLANCE updated frequently for changes, and delivered to internal employees, customers and partners.

Over the years, the complexity of training has increased significantly, as have expectations around outcomes. In this context , the level of investment required to deliver high-quality training is often not feasible for internal L&D organizations, particularly as learning and development is not their core function. Moreover, dedicated internal L&D staff are frequently underutilized since-training demand tends to fluctuate, while costs remain largely fixed. As a result, the efficiency and effectiveness of in-house training efforts are often inconsistent.

As artificial intelligence transforms the learning landscape, L&D departments at large global organizations are finding it challenging to build comprehensive AI-enabled learning ecosystems that can operate effectively at scale. These organizations face significant hurdles in integrating AI technologies with their existing learning infrastructure, managing data governance and privacy requirements across multiple regulatory environments, and ensuring AI-driven personalization works consistently across diverse cultural and linguistic contexts. Many L&D teams lack the specialized technical expertise needed to evaluate, implement, and optimize AI solutions, while also grappling with the complexity of creating seamless user experiences that blend AI-powered content curation, adaptive learning paths, and predictive analytics. Additionally, the rapid pace of AI innovation makes it difficult for internal teams to stay current with emerging technologies and best practices, often resulting in fragmented implementations that fail to deliver the transformative learning experiences that modern enterprises require to remain competitive in an increasingly digital business environment.

NIIT MTS operates in the training outsourcing market and is an established leader in Managed Learning Services. The Company can do this work with significantly higher efficiency and effectiveness as compared to internal training organizations while ensuring best practices are followed. In addition, NIIT MTS brings unique capabilities that internal training organizations do not have and are often inefficient for them to invest in for captive use.

NIIT MTS helps its corporate customers achieve substantial improvements in learning outcomes (such as reduced time spent for upskilling, improved productivity, improved business results, increase in sales etc.) with higher predictability, while driving reduction in cost and in fixed head count for training, as well as moving to a variable model (pay per use).

Outsourcing of proprietary training is underpenetrated, with external spending on Learning Services at less than $10 billion per annum, which is less than 3% of overall L&D spend . This represents a large opportunity for your Company with significant headroom for growth. The Managed Learning Services market is expected to grow substantially as companies increasingly outsource non-core functions, creating a significant opportunity for Managed Learning Services providers like NIIT MTS to capture a disproportionate share of this expanding market given our proven track record as training specialists who consistently deliver measurable improvements in both the efficiency and effectiveness of our clients L&D operations.

L&D is increasingly seen as a key enabler for business success. Therefore, global corporations are not only demanding greater accountability and efficiency on spending from their L&D function but are also expecting L&D investments that lead to a measurable improvement in employee productivity and business outcomes. NIIT MTS is uniquely positioned to capture a disproportionate share of this demanding market through its distinctive combination of deep L&D expertise, proven methodologies for measuring ROI and business impact, and a track record of successfully transforming L&D operations for Fortune 500 clients—capabilities that traditional competitors often lack. Unlike generalist L&D providers and consulting firms that may deliver inconsistent service quality across different practice areas, or smaller training vendors that struggle to deliver transformative results at global scale, NIIT MTS combines specialized L&D focus with enterprise-grade delivery capabilities. The companys competitors often face challenges in key areas: they typically have limited expertise and experience in redesigning L&D operations to achieve sustained improvements in effectiveness and efficiency to deliver learning transformation at enterprise scale, and often cannot effectively integrate AI, technology, content, and delivery processes to create comprehensive learning ecosystems for large multinational organizations.

BUSINESS OVERVIEW AND PERFORMANCE

NIIT MTS offers innovative solutions that help clients accelerate the business impact. The Companys team of learning professionals helps the worlds leading companies transform their training function through training outsourcing services that reduce costs, add a measurable value, and increase the business impact, while allowing customers to redirect resources and energy into core business functions.

NIIT MTS provides the following services to its customers:

Managed Learning Services

Custom Content and Curriculum Design Learning Delivery Learning Administration Strategic Sourcing Learning Technology

Strategic Consulting Services

Learning & Talent Transformation Strategic Learning & Career Interventions Talent Technology Advisory Workforce Skilling Learner-Centric Experiences Learning & Talent Intelligence

Specialized Learning Solutions

AI-Powered L&D Transformation Immersive Learning Customer Education Services

HCM Technology and Consulting Services Leadership and Professional Skills Training Digital and IT Training Talent Pipeline as a Service

NIIT MTS strong value proposition, innovation, and excellence in customer service continue to be widely recognized. This is also reflected in the large number of industry recognitions and awards that the business has received year after year.

PERFORMANCE

While the company achieved year-on-year revenue growth, performance in FY25 was impacted by the environment and was below initial expectations, reflecting the evolving macroeconomic environment and cautious enterprise sentiment across core developed markets. Nonetheless, NIIT Learning Systems Limited delivered industry-leading growth and profitability, navigating the uncertainty more effectively than many of its peers. The Company maintained its 100% contract renewal rate and continued to be recognized for service excellence, including the highest Net Promoter Scores (NPS) in the industry and improved positioning in independent analyst evaluations such as the Fosway 9-Grid™.

While customer consumption in some accounts moderated, the Company continued to deepen relationships, expand into new divisions, and leverage its MTS model to grow wallet share. Investments in new capabilities and global delivery allowed the Company to sustain growth momentum, even as near-term visibility remained constrained in select verticals. The learning business demonstrated continued resilience, supported by a differentiated operating model and strong focus on customer outcomes.

The Company continued to make disproportionate investments in sales & marketing to expand its reach and in new capabilities to deliver enhanced value to its customers. The Company has a dedicated team for leveraging GenAI and has made rapid progress in deploying AI and automation across multiple aspects of its operations. In projects and workstreams where AI is utilized, the Company has become more ambitious in terms of learning outcomes and is also beginning to see improvements in efficiency.

NIIT MTS entered the Global Management Consulting & Professional Services sector and strengthened its consulting practice with the acquisition of St. Charles Consulting Group LLC (StC) in FY23. Headquartered in St. Charles, Illinois, StC is a leading provider of consulting, design, and implementation solutions for strategic learning programs for Fortune 500 companies. During the year, the Company created a unified consulting team to deliver enhanced capabilities, including Learning Transformation, Talent Strategy & Business Alignment, Employee and Learner Experience Design, Talent & Learning Technology, and Strategic Learning Interventions, to its customers. StCs consulting services have been expanded beyond North America to the UK and EU markets. The expansion of NIIT MTSs services across Management Consulting & Professional Services firms has resulted in increased wallet share with customers.

NIIT MTS added nine new logos in FY25. In addition, the Company continued to see 100% renewals of contracts and also expanded wallet share with its customers. During the year, Company secured 9 customer renewals and 6 scope expansions. The strong velocity in contract wins and 100% renewals are a testament to its strategy, value proposition and the trust that it enjoys with its customers. Including these, NIIT MTS ended the financial year with 93 MTS customers. The revenue visibility stood at US$ 390 million. For the full year, top 5 customers contributed 33% to revenues while top 10 contributed 52%. Contribution from top 20 customers was 75%.

Despite the increased uncertainty and compression in spends, the revenue was up 6% YoY driven by new customer addition, expansion in scope from existing customers and benefit from a favorable change in foreign exchange rates. Growth in constant currency was 5% YoY. The business achieved an EBITDA of Rs. 3,763 million with EBITDA margin at 22.8%. Change in business mix and rising uncertainty in the environment, which led to sharp changes in planned consumption levels by customers resulted in disproportionate impact on the margin. The total number of employees as of March 31, 2025 stood at 2,410 as compared to 2,396 at the end of previous year.

STRATEGIC INVESTMENT IN STRIVR

In March 2025, the Company made a minority investment in Strivr Labs Inc., USA ("Strivr") through its wholly owned subsidiary NIIT (USA) Inc. Incubated at Stanford University, Strivr is a leading provider of extended reality (XR)-based learning solutions and the XR training platform of choice for many of the worlds largest enterprises. With the rise of AI-powered immersive solutions, the minority investment in Strivr will strengthen the set of solutions NIIT MTS can bring to its clients globally. These solutions aim to enhance learner engagement, improve skills, and reduce training costs and time to proficiency for pivotal job roles across the enterprise.

This strategic partnership enables the Company to offer a cutting-edge XR platform with customizable AI-powered content, data analytics to track user performance, and realistic simulations to develop practical workforce skills across verticals like banking and financial services, insurance, CPG and retail, life sciences, manufacturing, oil and gas, mining, and technology. The Strivr platform will also enable NIIT MTS clients to gain unique behavioral insights to measure XR-based learning and optimize workforce performance and training effectiveness at scale. Strivrs XR platform will further enhance the extensive managed learning and strategic consulting capabilities of NIIT MTS.

CONSOLIDATED FINANCIALS OF THE COMPANY

The consolidated financial summary for FY25 is provided in Table 1 below:

Table 1 Consolidated P&L

Rs. Million	FY25	FY24	YoY
Net Revenue	16,533	15,535	6%
Operating Expenses	12,770	11,773	8%
EBITDA	3,763	3,762	0%
EBITDA%	22.8%	24.2%	(146) bps
Depreciation & Amortization	619	592	5%
EBIT	3,144	3,171	(1) %
Net Other Income/(Expenses)	31	(148)	179 mn
Exceptional Income/(Expenses)	(111)	(52)	(59) mn
Profit Before Tax	3,064	2,971	3%
Tax (Operational)	789	839	(50) mn
Profit After Tax	2,275	2,132	7%
Basic EPS (Rs.)	16.8	15.8	6%
PAT%	13.8%	13.7%	3 bps

Note:

Other Income/ (Expenses) includes Treasury Income, Scheme related transitory expenses pertaining to ESOPs of NIIT Limited held by employees of NIIT MTS at the time of demerger, Strategic growth & acquisition related expenses including fair value adjustments for Future Earnout liability and Interest expense on loan related to the acquisition. Exceptional expenses relate to inorganic growth initiatives.

Net Revenue

In FY25, the Company recorded revenue of Rs. 16,533 million, up 6% as compared to last year. Revenue increased 5% YoY in constant currency.

Operating Expenses

Operating Expenses for FY25 were Rs. 12,770 million, up 8% YoY. Growth in Operating Expenses was higher than the growth in Revenue due to change in product mix and impact of certain cancellations and deferrals of scheduled training activity during the year driven by the changing geopolitical environment.

Depreciation

For the year, the Depreciation & Amortization was Rs. 619 million compared to Rs. 592 million last year. This includes Rs. 131 million in amortization of intangibles recognized in consolidated accounts on acquisition of StC.

Net Other Income / (Expense)

The Net Other Income/ (Expenses) for FY25 was Rs. 31 million compared to Rs. (148) million in FY24. This includes

Interest Income on bank deposits and fixed income investments) of Rs. 411 million.

Foreign exchange loss of Rs. 116 million.

Net Interest Expense of Rs. 237 million include the interest on term loan related to the StC acquisition of Rs. 59 million, Fair Value Loss on fair value adjustment in future acquisition liability related to the acquisition of StC of Rs. 97 million, Interest expense related to leased premises of Rs. 37 million (INDAS 116), Bank Charges of Rs. 33 million and other borrowing expenses of Rs. 11 million.

Scheme Related/Transitionary Expenses of Rs. 45 Mn for FY25 attributable to cost of ESOPs of NIIT Limited (Transferor Company) held by employees of NIIT MTS.

Miscellaneous Income of Rs 18 million.

Table 2 Net Other Income/ (Expenses)

Rs. Million	FY25	FY24
Treasury Income	411	279
Foreign exchange Gain/(Loss)	(116)	(41)
Net Interest Income/(Expenses)	(237)	(353)
Scheme related/Transitory Expenses	(45)	(63)
Miscellaneous Income	18	31
Total Net Other Income/(Expenses)	31	(148)

Exceptional Expenses

Exceptional Expenses of Rs. 111 million driven by legal & professional expenses related to inorganic growth initiatives.

Taxes

The Company has provided for an amount of Rs. 789 million towards income tax at consolidated level as compared to Rs. 839 million in FY24. The effective tax rate (ETR) for the year is 25.7% vs 28.2% in FY24. The ETR includes impact of notional expenses included in consolidated accounts. Tax in FY24 included impact of tax on intercompany fund transfers and stamp duty related to the Scheme of Arrangement related to the demerger.

Table 3 Detailed Analysis of Consolidated Balance Sheet at the End of the Financial Year 2024–25

Rs. Million	31-Mar-25	31-Mar-24
Sources of Funds
Share Capital	272	271
Reserves & Surplus		9,504
Shareholders Funds	12,100	9,774
Loan Funds	706	930
Total Sources of Funds	12,806	10,705
Application of Funds
Net Fixed Assets (with CWIP)	6,085	6,010
Non-Current Investment	408	303
Right-of-use Assets	300	386
Lease Liabilities	(322)	(391)
Deferred Tax Assets net of Liabilities	76	105
Cash & Equivalents	7,742	6,589
Trade Receivables	2,515	2,250
Other Assets	4,737	4,645
Other Liabilities	(8,736)	(9,192)
Total Application of Funds	12,806	10,705

Please note: The analysis in this MD&A does not conform specifically to the Schedule III format. Numbers have been regrouped for analysis.

Share Capital

The Share Capital of the Company stood at Rs. 272 million, as compared to Rs. 271 million in FY24. This includes impact of issue 736,628 Equity Shares of Rs. 2 each pursuant to exercise of ESOPs during the year. See Note 11 for details.

Reserves And Surplus

Reserves and Surplus stood at Rs. 11,827 million in FY25 compared to Rs. 9,504 million last year. The increase is attributable to profits generated during the year and issuance of new shares net of dividend paid. See Note 12 for details.

Loan Funds

As on March 31, 2025, the Gross Debt of the Company stood at Rs. 706 million versus Rs. 930 million last year. The reduction in debt is due to planned repayment of installments towards the term loan related to the acquisition of StC. The Debt-to-Equity ratio of the Company was 0.06 as on March 31, 2025. As of March 31, 2025 the Company had Net Cash (Cash & Equivalents less Debt) of Rs. 7,036 million compared to Rs. 5,659 million in FY24.

Fixed Assets

During the year, the Company had total capital expenditure (including change in Capital Work in Progress) of Rs. 483 million. The amount of Capital Work in Progress as on March 31, 2025, stood at Rs. 100 million, as compared to Rs. 263 million last year. This includes intangible assets under development.

The category-wise addition in fixed assets is given below: Products and Platform: Rs. 391 million Infra /Capacity enhancement: Rs. 58 million Normal capital expenditure: Rs. 34 million

Table 4 Detailed Analysis of Consolidated Balance Sheet at the End of the Financial Year 2024–25

Rs. Million	As on 31-Mar-25	As on 31-Mar-24
Property, plant and equipment	300	341
Intangible assets under development	100	263
Goodwill	4,519	4,408
Other Intangible assets	1,166	999
Net Block	6,085	6,010

Net Fixed Assets stood at Rs. 6,085 million as on March 31, 2025, as compared to Rs. 6,010 million last year. The YoY increase is due to the capital expenditure for the year, net of depreciation and amortization of Rs. 619 million. The amounts in table above include impact of change in exchange rates.

Right-of-Use Assets

Right-of-Use Assets as on March 31, 2025, stood at Rs. 300 million, as compared to Rs. 386 million last year.

Deferred Tax Assets/Liabilities

As of March 31, 2025, the Deferred Tax Assets stood at Rs. 93 million as compared to Rs. 148 million last year. Deferred Tax Assets are created on long-term capital losses which are available for set off against future long-term capital gains and on other timing differences such as provisions carried in the financial statements which are allowed as tax deductible expenses in the year of actual write-off. During the period, Deferred Tax Liabilities decreased from Rs. 44 million in FY24 to Rs. 17 million in FY25.

Table 5 Deferred Tax Assets & Liabilities

Rs. Million	As on 31-Mar-25	As on 31-Mar-24
Deferred tax liabilities	(17)	(44)
Deferred tax assets	93	148
Net Deferred Tax	76	105

Other Assets & Liabilities

The elements of Net Current Assets were as follows:

Trade Receivables

The total receivables of the Company as on March 31, 2025, were Rs. 2,515 million, as compared to Rs. 2,250 million as on March 31, 2024. Increase in Trade receivable YoY is on account of increase in business volume and change in business mix. Days Sales Outstanding (DSO) increased from 53 last year to 56 as of March 31, 2025. Your Company continues to lay strong emphasis on managing and optimizing the working capital cycle.

Cash And Bank

The Cash & Equivalents, as on March 31, 2025, stood at Rs. 7,742 million compared to Rs. 6,589 million as on March 31, 2024.

Rs. Million	As on 31-Mar-25	As on 31-Mar-24
Liquid Investments	3,843	3,474
Bank Deposits	3,899	3,115
Cash & Equivalents	7,742	6,589

During the year, the cash generation was as follows:

Net Cash from Operations for FY25 was Rs. 2,597 million vs Rs. 2,897 million for FY24. Cash generation was lower year on year on account of increase in working capital required as compared to last year.

Net Cash from Investing activities for FY25 was Rs. (794) million vs Rs. (1,347) million for FY24. Investments include impact of Rs. 90 million towards investment in Strivr, Rs. 534.77 million towards Earnout payment for StC, and Rs. 124 Mn towards legal & professional expenses for inorganic growth initiatives and payout towards capex of Rs. 472 million, net of proceeds from mutual funds and interest received of Rs. 428 million.

Net Cash from Financing activities in FY25 was Rs. (726) million vs Rs. (693) million for FY24. This includes impact of Rs. 372 million towards payment of dividend paid and repayment of Rs. 254 million towards outstanding term loan related to acquisition of StC.

Other Assets

Other Assets increased from Rs. 4,645 million in FY24 to Rs. 4,737 million in FY25. Other Assets include Other Receivables (Rs. 3,085 million), Unbilled Revenue (Rs. 870 million), Advance Recoverable in cash or in kind (Rs. 583 million), Advance Income Tax (Rs. 136 million), Security Deposit Receivable (Rs. 44 million) and Interest Receivable (Rs. 16 million). Other Receivables include the receivables related to the Strategic Sourcing services that are part of the MTS offering.

Rs. Million	As on 31-Mar-25	As on 31-Mar-24
Other Receivables	3,085	3,269
Unbilled revenue	870	638
Advances recoverable in cash or in kind	583	453
Advance Tax	136	230
Security Deposits Receivable	44	36
Interest Receivable	16	17
Other Advances	2	1
Inventories	1	1
Other Assets	4,737	4,645

Other Liabilities

Other Liabilities include Trade Payables, Other Financial Liabilities, and Provisions. These have decreased from Rs. 9,192 million in FY24 to Rs. 8,736 million in FY25. The decrease is primarily driven by reduction in future Acquisition Liability (Payment of Earnout for StC). Please see Notes 13(ii), 13(iii), 14 and 15 for details.

Rs. Million	As on 31-Mar-25	As on 31-Mar-24
Trade payables	990	906
Provisions	224	173
Statutory Dues	356	370
Deferred Revenue	1,077	1,028
Advances from Customers	156	140
Other Payables*	3,944	4,205
Future Acquisition Liability	1,989	2,370
Other Liabilities	8,736	9,192

*Other Payables include capital creditors, amount payable to employees, income tax liability, and payables on account of Strategic Sourcing for customers.

Key Financial Ratios

The Company has identified the following as Key Financial Ratios:

Particulars	FY25	FY24	YoY
Revenue growth (%)	6%	14%	(766) bps
Operating Profit margin (%)	23%	24%	(146) bps
Net Profit margin (%)	14%	14%	3 bps
Basic EPS (Rs.)	16.75	15.82	6%
Debtor Turnover Ratio	6.94	7.05	(2) %
Days Sales Outstanding (DSO) days	56	53	3 days
Debt to Equity Ratio	0.06	0.11	(39) %
Interest Coverage Ratio	21.95	20.62	6%
ROCE	38%	46%	(17) %
Current Ratio	1.88	1.66	14%

Revenue grew 6% in FY25 as compared to 14% in FY24. FY24 growth included full year impact of the acquisition of StC. Organic growth in FY24 was 4%. EBITDA Margin was 23% for the year as compared to 24% last year. Margins were impacted by change in business mix and certain cancellations and deferrals of scheduled training activity driven by increased business uncertainty during the year.

Net Profit Margin was 14% in FY25, similar to the margin in FY24. The decline in EBITDA margin was offset by decrease in effective tax rate. Basic EPS, which is calculated by dividing net profit by the total number of shares outstanding, increased by 6% YoY.

Debt to Equity ratio improved due to partial repayment of debt and profits for the year. Interest coverage Ratio increased YoY. There was an increase in DSO YoY by 3 days. Debtor Turnover decreased marginally to 6.9 versus 7.1 last year. The amount of inventory carried by the company stood at Rs. 0.80 million, is not material. Current Ratio increased to 1.88 versus 1.66 last year due to utilization of profits towards investments and better working capital management.

The details of Return on Net Worth are mentioned below:

Particulars	FY25	FY24	YoY
Return on Net Worth (%)	21%	24%	(310) bps

Return on Net Worth (RoNW) is computed as Profit after Tax divided by Net Worth. Net Worth represents the total of the Companys equity and reserves, excluding capital reserves, hedging reserves, and cumulative translation reserves. RoNW was 21% in FY25, as compared to 24% in FY24. While net profit increased by 7% to Rs. 2,275 million, Net Worth increased to Rs. 10,879 million from Rs. 8,881 million.

Accounting Policies

The Company has selected the accounting policies described in the Notes to Accounts, which have been consistently applied, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2025, and of the Profit or Loss of the Company for the year. The significant accounting policies and practices followed by the Group are disclosed in Note no. 2 of the Consolidated Financial Statements for the year.

Related Party Transactions

Related Party transactions are defined as transactions of sale / purchase of goods / services made by the Company with Promoters, Directors, Key Managerial Personnel, Subsidiaries, Associates, or other parties in which Promotors or Director are having significant interest / control directly or indirectly, which may have potential conflict of interest with the Company. There were no material transactions during the year under review that were prejudicial to the interests of the Company.

All transactions covered under related party transactions were regularly ratified and/or approved by the Board, the guiding principles being arms length, fairness, and transparency. Please refer to Note no. 35 of the standalone financial statements and Note no. 33 of the consolidated financial statements for details of related party transactions during the year.

HUMAN RESOURCES

Overview

At NIIT, people are central to organizational success. Business growth is intrinsically linked to the professional and personal development of every NIITian. During FY25, the focus remained on advancing internal talent, optimizing organizational efficiency, enhancing digital HR capabilities, and cultivating a high-performance, inclusive culture.

KEY HR INITIATIVES

ENABLING CAREER GROWTH & MOBILITY

Manager Certification Programs: Structured development programs were introduced across managerial levels to enhance leadership effectiveness and drive team performance.

Talent Readiness Program: Over 300 employees participated in the Talent Readiness initiative, with 70% transitioning to elevated roles, demonstrating its impact on internal mobility.

Quarterly Performance Conversations: Regular performance dialogues were institutionalized to support well-being, continuous development, and goal alignment.

Generative AI Capability Building: A focused program enabled 88% of employees to be trained on in-house AI tools and responsible usage guidelines, fostering AI fluency across the organization.

Trusted Advisor Program: Senior professionals in client-facing functions participated in an externally facilitated learning program to enhance strategic client engagement capabilities.

Catalyst Club – High-Potential Talent Acceleration: A flagship recognition and development platform was launched to fast-track high-potential employees through access to exclusive learning and leadership forums.

IMPACTING THE COST PYRAMID

Focused efforts were undertaken to optimize cost structures while sustaining delivery effectiveness and capability:

Onsite-to-Offshore Transitions: Talent was upskilled and redeployed to India-based delivery teams to enhance cost efficiency.

Compensation Realignment: Entry-level hiring costs were rationalized across key geographies in alignment with local benchmarks.

FTE Profitability Review: International roles were reviewed for revenue alignment, resulting in targeted workforce decisions.

AI-Led Efficiencies: Adoption of AI tools in translation, content creation, and production workflows significantly improved operational speed and reduced effort.

Talent Mix Optimization: Workforce structures, including training models, were recalibrated to optimize the balance between cost and capability.

ELEVATING THE DIGITAL EXPERIENCE

Human Resources continued to evolve from a transactional function to a data- and insight-led enabler:

SuccessFactors Implementation – Phase I:

Digitization of core processes, including employee data, recruitment, and onboarding, was completed. Phase II will cover compensation, succession planning, and performance management.

N.AI.R.A. – AI Chatbot: Deployed to provide real-time resolution of HR policy queries, enhancing employee support services.

Amber – Engagement AI: Enabled real-time sentiment insights and early identification of at-risk employees, with structured follow-ups supporting proactive retention efforts.

STRENGTHENING CULTURE

Culture-building efforts focused on enhancing pride, connection, and belonging across the organization:

Reimagined Hybrid Culture: Engaging employee experiences were delivered through leadership connect sessions, immersive initiatives, and global celebrations such as Annual Day and Foundation Day.

Well-being as a Strategic Priority: Holistic well-being was promoted through ongoing programs in sports, employee engagement, and work-life balance. Enhanced leave policies in India further supported workforce flexibility.

Recognition with Purpose: Recognition frameworks evolved to celebrate not only performance, but also personal milestones, tenure, and unique contributions, including through the "Moments that Matter" initiative.

Social Impact Integration: Purpose-led programs such as Gift a Smile and community-focused initiatives reinforced empathy and collective responsibility.

Advancing DEI Beyond Demographics: Inclusive engagement platforms-such as the MTS Cookbook, art exhibitions, and team carnivals-enabled cultural expression, creativity, and team bonding.

Catalyst Club & Recognition Evolution: The introduction of the Catalyst Club and broader recognition frameworks reinforced the importance of growth, contribution, and inclusion.

Outcomes

Strengthened Employer Brand: Indicators across Amber insights, Employee Satisfaction Scores (ESS), retention trends, and Glassdoor reviews exceeded industry benchmarks, reaffirming NIITs position as an employer of choice.

Industry Recognition: o Two Gold Awards received in the EdTech category for "Rewards & Recognition" and "Best HR Practices"

o Silver Award received in Learning & Development for the Talent Readiness Program

Inclusive & Gender-Positive Workforce: Sustained focus on diversity enabled strong female representation across levels and functions, promoting equitable growth opportunities.

Expansion of Inclusion Practices: Disability inclusion efforts were scaled by integrating more persons with disabilities into the workforce, furthering the commitment to equity and accessibility.

FY26 Talent Strategy – Strategic Focus Areas

The talent agenda for the next year is aligned with organizational priorities and long-term transformation goals:

Future-Ready Capabilities: Drive continuous upskilling and development to match evolving business needs.

Agile, Scalable Talent Models: Enhance cost efficiency, flexibility, and productivity through adaptive workforce structures.

Digital HR at Scale: Advance automation and digital workflows to improve operational efficiency and experience.

Distinctive Employee Experience: Deliver a purpose-led, engaging, and personalized journey that reinforces belonging, motivation, and performance.

FUTURE OUTLOOK

Looking ahead, NIIT MTS sees a compelling opportunity to lead the global corporate learning market. Despite continued uncertainty in the external environment, the Company has set bold growth aspirations, targeting $400–500 million in revenue over the next 3 years. With estimated annual spending of over 400 billion dollars and less than 5% penetration, training outsourcing continues to represent a large, multi-year growth opportunity. NIIT MTS, being a Top 2 global training specialist firm and Top 5 overall, including general outsourcing firms, is uniquely positioned to address growing demand as companies seek greater efficiency and effectiveness from their L&D spending.

The strategy rests on three key pillars:

Becoming an AI-first business: The Company will continue to embed GenAI across learning design, delivery, support, and analytics to improve both efficiency and learner outcomes.

Expanding market coverage: The Company will invest in business development and customer acquisition to grow new logos, while increasing share of wallet in existing accounts.

Deploying growth capital: Strategic investments will be made to strengthen and expand capability set, geographical reach, and penetrate desired customer segments, including potential inorganic expansion.

These efforts are underpinned by a strong balance sheet and a culture of execution excellence. With a sharpened strategic focus, operational agility, and commitment to innovation, NIIT MTS is confident in its ability to scale sustainably, deliver stakeholder value, and maintain leadership in a fast-evolving global learning landscape.

NIIT MTS has established a strong position and ‘right to win in the market with a) proprietary learning methodologies grounded in learning science that create predictable outcomes , b) leadership in the use of technology for education, including a leading-edge in AI for learning and development, automation of learning processes, gamifica-tion, Augmented Reality and Virtual Reality (AR/VR) based simulations and learning analytics, c) end-to-end, multi-shore delivery capability, and d) strong balance sheet and availability of growth capital. These combined capabilities lead to increased business impact and consistent improvements in the effectiveness and efficiency of the learning function across its global customer base.

The completion of the demerger in FY24 created an organization with a sharp focus on learning outsourcing market. This provides the company with greater agility, energy and hunger to further drive its growth. The Company is committed to maintaining ongoing investments in innovation to ensure customer satisfaction, in advisory services to foster thought leadership, and in sales & marketing to build a global platform for large-scale comprehensive deals aimed at accelerating growth.

Risks And Concerns

NIIT MTS services customers in over 30 countries. As a global enterprise, the Company faces a variety of risks. Risk management is, therefore, an integral part of the Companys core process and involves recording, monitoring, independent testing, and controlling of the internal functions by establishing the Risk Control Matrix (RCM). RCM ensures process control, Business Risk Management (BRM) framework for business objectives, and Entity Level Control (ELC) for comprehensive risk reporting.

NIIT MTS has established a comprehensive Enterprise Risk Management (ERM) framework across the organization to enhance risk visibility, strengthen governance, and embed a culture of proactive risk management. The framework is aligned with globally accepted standards and leading practices and has been integrated with strategic and operational decision-making processes.

The ERM framework enables systematic identification, assessment, mitigation, monitoring, and reporting of risks that may impact the achievement of the Companys strategic objectives, particularly in an increasingly disruptive global environment. It supports informed decision-making by incorporating risk considerations into all major business decisions.

The Companys risk framework encompasses strategic risks, operational risks, financial risks, governance risks, and information & technology risks.