NIIT Technologies Q1 preview: Profit, margins likely to fall

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NIIT Technologies will report first-quarter results Wednesday. The company had posted a 4 percent increase in revenue from operations at Rs 788.8 crore in the March-ended quarter, and a 17.8 percent rise in its net profit at Rs 97.3 crore.

These are the things to watch out for in NIIT Tech's June-ended quarter results on Wednesday:

Revenue:

ICICIDirect Research expects rupee revenues to grow 7.5 percent sequentially to Rs 848.3 crore. The Street will also watch out for an update on NIIT's full-year revenue commentary, which was very positive in the previous quarter.

Profit:

Motilal Oswal's profit after tax estimate is Rs 77.8 crore, a sequential fall of 9.7 percent, primarily led by the revenue and margin decline.

Margins:

Earnings before interest, tax, depreciation, and amortisation (EBITDA) margins are expected to decline over 100 basis points because of the wage hike, partly offset by rupee benefit and operational efficiency. Investors will watch out for margin outlook commentary.

Digital business:

Industry watchers will also look out for NIIT Technologies' commentary on its digital business, which accounted for 24 percent in the previous year.

Commentary on largest business verticals:

During the last quarter, NIIT had said it was seeing a promising start to the year in its largest verticals- BFSI and travel and tourism.  Investors will watch out for an update on the verticals.

Strategy under new leadership:

Analysts will also watch for the progress on the development of strategy under new leadership. Sudhir Singh had taken over from longtime CEO Arvind Thakur in January.