Africa to remain an important mkt ahead: NIIT

NIIT's Q1 standalone net profit was down at Rs 3.2 crore from net profit of Rs 28.2 crore (QoQ).

Rajendra S Pawar, Chairman of NIIT said that the individual learning business in NIIT centers has seen phenomenal growth this quarter. "We have 28% enrollment growth and we crossed 100,000 enrollment for the first time in our history."

Looking forward, he said that the company has been investing actively in Africa over the last couple of years and we look at it as a very important market going forward. 

According to him, one will have to look at lead indicators and their seasonality, which are more important to the business. 

Excerpts from CNBC-TV18’s exclusive interview with Rajendra S Pawar:

Q: How has growth panned out in this quarter in each one of your verticals and what is the outlook for the coming few quarters?

A: If you look at system wise revenue, which is what customers pay the system that is up 25% and our enrollments are up 28%. We see fairly good performance in this quarter because of cyclicity and operating profits are also up 29%. So there has been good growth.

There are two important milestones this quarter. For the first time, we have crossed 100,000 enrollments, which are up 28%, and our order intake has crossed Rs 500 crore. This order intake is a great lead indicator; it has contributed by enrollment in the individual learning business and school learnings solutions business. We have had a very significant order intake of over 2,000 Government run schools in Andhra Pradesh, which is one of the largest contracts given out at Rs 173 crore. Similarly in the corporate business on the India side, there has been good growth. So it has been a quarter, which is quite healthy and the order intake is also very strong.

Q: A lot of analysts on the street who were expecting 21% growth this quarter on the topline and about 15% on the bottomline. Your performance has come in lower than that. You think the run rate in the next few quarters and for FY09 could be around 20% mark on sales?

A: We expect that but one will have to look at lead indicators and their seasonality, which are more important in our business. One quarter doesn’t become representative and for us the system wise revenue is up 29%, which is what customers are paying across the world when they come into our business. It is a fairly strong trend

Q: What about new markets such as China and Africa. How much do you think they would contribute by the end of the year?

A: Last year China was about 13%; we expect it to be in the same range. Africa has shown us good growth and we have been investing in for quite sometime. For the first time, we are beginning to report Africa, which was 7% of our system wise revenues. We have been investing actively over the last couple of years and we look at Africa as a very important market going forward with about 7% system wide revenue. 

Q: You have talked about fresh order intake crossing Rs 500 crore, what is the expectation of the kind of incremental orders you seek to add on your order book in the coming few quarters?

A: Rs 500 crore is the first time ever but there is one big component which is Rs 173 crore from one state government. Those things do not happen everyday but more and more governments are getting serious. There are a number of governments, which have Request For Proposal (RFPs) getting built up. We do expect that with the larger number of states getting involved that the build up of this particular sector will be very healthy as well going forward.

Q: Do you expect more orders from the state government?

A: The individual learning business has been a phenomenal growth for us this quarter, which is the NIIT Centers. We have 28% enrollment growth and we crossed 100,000 enrollment for the first time in our history.