NIIT Tech Q1 profit seen down 18%, dollar revenue may fall 0.5%

Software services provider NIIT Technologies' first quarter (April-June) profit is likely to fall 17.7 percent to Rs 65 crore and revenue may decline 0.5 percent to Rs 681 crore compared with preceding period, according to average of estimates of analysts polled by CNBC-TV18.

Revenue in dollar terms may increase marginally to USD 102 million from USD 101.7 million on sequential basis.

Operating profit (earnings before interest, tax, depreciation and amortisation) is expected to slip 12.7 percent quarter-on-quarter to Rs 110 crore and margin may contract 225 basis points to 16.15 percent in quarter ended June 2016 due to wage hike.

Revenue growth has been negative for the last 2 quarters, impacted by completion of some large projects and a delay in ramp-up of new projects. The company has guided for soft June quarter too and expects pick up only in Q2 due to full quarter ramp up of Ofcom deal.

NIIT Technologies has won a 23 million pound, four-year contract to supply communications regulator Ofcom with IT services and support in January 2016.