NIIT Tech Q1 net seen at Rs 52cr, wage hike may drag margin

Religare says margins may be impacted by wage hike and visa cost. As of Q4 day sales outstanding (DSO) stand at 93 days which are at the higher end of the industry.

July 14, 2015 / 12:07 IST

26 Aug, 2025 12:21

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NIIT Tech is expected to report net profit at Rs 51.7 crore in the April-June quarter against a loss of Rs 17.5 crore in last quarter. In the January-March quarter, the company had to bear an exceptional item of Rs 80 crore due to dispute between one of the company's subsidiaries and its client in the APAC region. The dispute was resolved by concluding a settlement agreement.

According to Religare, NIIT Tech’s revenue is likely to be up 3 percent at Rs 629.7 crore with a two-month revenue contribution of Incessant Technologies. NIIT Tech announced acquisition of 51 percent in Incessant Tech during Q4 results. The addition of revenues from acquired company will help propel growth in FY16 to industry average. NIIT had paid USD 17 million for the purchase.

During the quarter, its EBITDA is seen at Rs 93.5 crore versus Rs 99.7 crore on a sequential basis. In percentage terms, EBITDA may be at 14.84 percent against 16.3 percent (quarter-on-quarter).

Religare says margins may be impacted by wage hike and visa cost. As of Q4 day sales outstanding (DSO) stand at 93 days which are at the higher end of the industry. For FY16, reducing the high level of DSO and improving cash generation is an operational focus area for the company. Digital is the new focus area of the company in FY16.

Largely driven by strong results amid an overall weak reporting season for the IT sector, the stock has done relatively well after 4Q FY15 results. There are expectations of an improvement in both growth and margins—the management outlook on both these fronts will thus be very important.