Dear All,
Forwarding you the Result Flash on NIIT Ltd for 4QFY2011.
NIIT reported its 4QFY2011 results which were inline with our expectations on the revenue front but disappointed on the operational front. The consolidated revenues came in at `324cr (vs. our expectation of `327cr), up 9.8% yoy. Revenues from Individual Learning Solution (ILS-IT), School Learning Solutions (SLS) and Corporate Learning Solutions (CLS) businesses were up 6.7%, 16.5% and 9.5% yoy to `122cr, `37.4cr and `153cr, respectively. Revenues from new business grew by 27.2% yoy to `11.7cr.
On the operational front, consolidated EBITDA margin declined by 362bp yoy to 12.5% (vs. our expectation of 16.2%) due to margin decline in all its business segments. EBITDA margin decline in SLS segment was extensive of 1557bp yoy to 7.5%. EBITDA margin of ILS and CLS business segment declined by 205bp and 226bp yoy to 22.6% and 7.9%, respectively.
PAT stood higher at `37.8cr (vs. our expectation of `26.7cr) because of higher other income of `7.5cr in this quarter (as against loss of `5.7cr in 4QFY2010) and also lower tax outgo at the rate of 9.8% vs. 35.9% in 4QFY2010.
4QFY2011: Result highlights
| (` cr) | 4QFY11 | 4QFY11E | % Var | 3QFY11 | % chg (qoq) | 4QFY10 | % chg (yoy) |
| Net revenue | 323.8 | 327.2 | (1.0) | 300.7 | 7.7 | 295.0 | 9.8 |
| EBITDA | 40.4 | 53.0 | (23.7) | 37.0 | 9.2 | 47.5 | (14.9) |
| EBITDA margin (%) | 12.5 | 16.2 | (371)bp | 12.3 | 17bp | 16.1 | (362)bp |
| PAT | 37.7 | 26.7 | 41.1 | 12.9 | 192.2 | 24.7 | 52.6 |
Other key highlights:
· Overall enrollments in ILS –IT segment grew by 12% yoy; Career enrollments grew by 19% yoy and edgeineers by 33% yoy.
· NIIT added 196 private schools during 4QFY2011 in SLS segment with an order intake of `35.2cr from them. Pending order book for SLS segments stands at `440.2cr with 30% executable over the next 12 months. We believe the margin performance was dismal in this quarter for SLS because of higher component of hardware sales.
· Volume growth in CLS segment came in at 12% yoy driven by growth in MTS and online learning products. Order intake for the quarter stood at US$39.9mn with the pending order book standing at US$98.2mn, of which 59% is executable over the next 12 months. Also the company signed two multimillion dollar deals for managed training services in CLS segment in this quarter taking the total engagements to 6 contracts.
· In new businesses, the FMT enrollments were up 177% yoy signaling strong hiring in the banking sector. Order intake for the quarter stood at `11.6cr with the pending order book standing at `107cr.
· Mr. Rohit Gupta is appointed the new CFO of the company in place of Mr. Jitender Mahajan who has been moved to the role of Group Internal Audit Head function.
Overall the results were disappointing on the operational front as the margin erosion persisted across all segments. We wait for managements’ commentary on the operational performance expected in each of its segments going forward. The stock is currently under review and we will be releasing a detailed result update note post the concall.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
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