Order book in healthy position for FY16: NIIT Tech

In an interview with CNBC-TV18, Sudhir Chaturvedi, COO of NIIT Technologies discussed the company's third quarter results for this fiscal.Below is the transcript of Sudhir Chaturvedi’s interview with CNBC-TV18's Reema Tendulkar and Mangalam Maloo. Reema: Could you tell us what the pressure points were in this quarter especially which affected your top line because it has come in lower than what the analysts community was expecting apart from the usual seasonality? A: We had advised at the beginning of the quarter that Q3 was likely to be a soft quarter for us and it was on account of seasonality as well as some softness that we were seeing in our travel related vertical. We had mentioned that our strategy was to really focus on improving our order flow because in the previous quarters our order intake had been slightly muted which is a good sign of growth in the coming quarters. So, we focussed on that and our USD 123 million of order intake including a large deal with Ofcom which is USD 34 million of net revenue for us over a six year period. That has materialised and in addition to that as you mentioned our margins grew by 60 bps sequentially quarter-on-quarter (Q-o-Q). So, this quarter for us really was about focussing on building up the revenue pipeline for the future quarters and conversion of the large deals that was critical for us for growth going forward. Mangalam: But is that USD 123 million order intake sustainable going forward and if you could also throw some colour on your topline growth in FY17 then? A: Yes, so what we are seeing is a good pipeline of deals currently that we are bidding for. We are seeing a mix of both outsourcing deals as well as digital deals. Digital deals as you know tend to have a shorter duration and we have seen a good deal flow there. This quarter we had five new digital wins as well. So, going into FY16 the order book and the pipeline is in a healthy position and what is more critical is that our strategy to focus on western markets for growth. So, if you see from USD 123 million order intake 95 percent of that order intake is in US and Europe. So, as I said earlier our stated strategy of focussing on western markets and focussing on high quality revenues from markets is working as planned and that is what gives us optimism that this year we will end at in the range of industry growth rate, the average industry growth rate and our objective will be to achieve the same next year.