Software services provider NIIT Technologies' third quarter profit is seen rising 7 percent sequentially to Rs 63 crore on reversal of provision but topline and operational performance may be week.
The company entered into a settlement agreement with the government in December 2016 that will result in partial reversal of provision. it had informed in June 2016 that the government contract was put on hold to resolve certain issues. The government had made a provision of Rs 36.1 crore in Q1FY17.
Rupee revenue during the quarter may fall to Rs 692.5 crore from Rs 692.9 crore and dollar revenue may decline 1.65 percent to USD 101.6 million from USD 103.3 million on sequential basis, according to average of estimates of analysts polled by CNBC-TV18.
EBITDA (earnings before interest, tax, depreciation and amortisation) may slip to Rs 112 crore from Rs 114.5 crore and margin may contract 30 basis points to 16.2 percent on quarter-on-quarter basis.
Management had cautioned about a weak Q3 due to seasonality and some spending cut by a travel clients. Travel and transportation contributed 33 percent to overall revenue in Q2.
The management had also said it expected second half of FY17 to be better than first half of FY17 (despite weak Q3), aided by ramp up of recent deals.
Key factors to watch out for would be fresh order intake. In Q2FY17, order intake was strong at USD 143 million against USD 101 milllion QoQ, aided by around USD 63 million contribution from Morris' contract renewal.
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