NIIT Tech aims to maintain margins ahead

In an interview with CNBC-TV18, Arvind Thakur, CEO, NIIT Technologies spoke about the quarterly numbers of the company.

He said, "We have had very good EBITDA margins of 20.5% for the quarter. We hope to sustain this over the year going forward." Below is the verbatim transcript of his interview with Sonia Shenoy of CNBC-TV18. Also watch the accompanying video. Q: Can you take us through the numbers this time around? Could you tell us how the quarter panned out? A: We had a very strong quarter. Our revenues are up 32%. Operating profits were up 22%. We had 21% improvement in net profits resulting in net profits of Rs 50 crore during the quarter. Sequentially, we grew 5% quarter on quarter for this particular quarter. So,  there has been healthy sequential growth as well during the quarter. Q: Out of this Rs 315 crore that you have done on the topline what has the contribution from BSF (Border Security Force) been if you could tell us and the kind of orders that you have got in that segment? A: The contribution of BSF has been lower in this quarter because now we are on a stage where we are completing major part of that program. In fact BSF has large component of hardware in its execution. Most of it has happened in the earlier quarters. In this quarter the component of hardware has been only  Rs 3.4 crore. So if I would have compared quarter on quarter with the earlier quarters by eliminating the hardware from BSF actually we have had a sequential growth of 9.3% during the quarter. Q: What did you say your EBITDA performance was this time around? What could be a sustainable EBITDA, operating profit margin that you could hold for the next couple of quarters? A: We have had very good EBITDA margins of 20.5% for the quarter. We hope to sustain this over the year going forward. In the coming year we would be giving significant salary hikes in the first quarter. So as always in every year the quarter in which you give those increases is the quarter in which you have a little pressure on margins. But, over the year it eases out as you build in more efficiency into the business. So, healthy margins for us in the business as well. Q: Will you hold on to this 20.5% because last quarter, you did somewhere around 23% or so and now that you have wage pressures also on your margins do you think you would hold on to 20% or do you think it may just slip below that? A: As a matter of fact last quarter we did 20.7%. So if you look at this quarter its 20.5% so we are actually delivering similar margins in each quarter. Buy NIIT Technologies; target of Rs 300: PINC Research Q: The one issue that analysts had last quarter was the sluggish order intake. Last time you mentioned that come quarter four you will be announcing a couple of large orders as well. What kind of incremental orders can you see? A: We have had in fact a very good in take in this quarter. Last quarter we had an intake of USD 50 million. In this quarter intake has been USD 116 million. With this new order book the orders executable over the next 12 months now stand at USD 169 million. If I were to just compare that with last year our position on the beginning of the year was USD 147 million. Q: Between segments what kind of pricing up move have you seen this quarter around? A: We have not seen any pricing pressure. In fact we have seen an improvement in pricing during the quarter. If I were to really look at our margins I would say about 0.3% of our margins have actually come from improvement in prices. Q: Can you give us any kind of ballpark guidance on what the revenue traction would look like for the next couple of quarters and for the fiscal as well? A: As you know as a company we don