IT services company NIIT Technologies today reported a 12.5% drop in its net profit at Rs 56 crore for the quarter ended December 31, 2012, due to softness in demand from banking and financial sector.
The company had reported a net profit of Rs 64 crore in the corresponding quarter last year.
Consolidated revenue of the company was, however, up 18.8% to Rs 514 crore for Q3 of FY13 as compared to Rs 433 in the same period last year.
“NIIT Technologies’ results were broadly in line with estimates. While revenues beat our expectations, margins came slightly lower than what we had assumed,” Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities said.
Operating Margins of the company declined to 15.8% from 18.0% in the corresponding period last year.
"There was softness in the BFSI (banking, financial services and insurance) segment due to overall economic uncertainties with a major catastrophe like hurricane Sandy causing losses among reinsurers," NIIT Technologies Chief Executive Officer Arvind Thakur said.
Despite the economic challenges, the company added $83 million of fresh orders was secured during the quarter, which included a $10 million renewal in travel and transport, leading to $242 million of order book executable over the next 12 months.
The company added four new clients that included two from manufacturing and one each in travel and transportation and government.
Among industry segments, banking, financial services and insurance (BFSI) contributed 31% towards the overall revenue, manufacturing and government contributed 6% and 8% towards revenue respectively, while travel and transport contributed 42% to the revenue.
Business in the US contributed to 37% of revenues, Europe, the Middle East and Africa (EMEA) improved to 40% of the total revenue share, while the revenue share from Asia-Pacific (APAC) and India remained at 23%, he added.
The company added 265 net employees during the quarter taking the total headcount to 7,882 at the end of the period.
Shares of the company were trading at Rs 276.70, up by 0.27% in the afternoon trade at the Bombay Stock Exchange.
