NIIT Q1 Review - Results Beat; Near Term Weakness No Deterrent for Long Term: Dolat Capital


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NIIT Ltd. reported 7.9% QoQ growth in revenue (our estimate: 4.3%), led by corporate learning solutions segment growth of 5.7% QoQ (3% in constant currency terms), and skills and careers business (including RPS Consulting business), delivering 16.4% QoQ growth. CLS business added four new contracts.

Operating profit margin rose to 14.8% (our estimate: 12.4%), down 50 basis points QoQ, reflecting impact of ramp-up in planned investments, and partial resumption of travel/premises cost.

CLS Ebitda margin stood at 23.6%, a decline of 57 bps QoQ, while SNC reported Ebitda breakeven (down 191 bps QoQ).

Revenue growth outlook for CLS business (79% of revenue) for FY23 was downgraded due to macro uncertainty, to 15-16% constant currency growth (from 20%), while Ebitda margin guidance was retained at of 20% plus.

For SNC division, NIIT retained its earlier guidance to deliver 50% plus growth with either a break-even EBITDA profit by end of FY23.

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