The Hindu Business Line : NIIT Tech posts 14 pc rise in Q4 net

Better management of overheads: (From right) Mr Rajendra S Pawar, NIIT Technologies Chairman; Mr.Arvind Thakur, CEO; and Mr Vijay K. Thandani, Director, at a press conference in the Capital on Monday. - Kamal Narang

New Delhi , June 26

Driven by sharper focus on verticals and better leveraging of overheads, IT solutions company NIIT Technologies Ltd on Monday posted a 14 per cent increase in its net profit for the fourth quarter ended March 31 at Rs 19.2 crore, while its Business Process Management arm, NIIT SmartServe, achieved operating breakeven during the quarter.

While the consolidated revenues rose 21 per cent to Rs 166.2 crore ( Rs 137.1 crore) the operating profit increased 35 per cent year-on-year at Rs 33.2 crore. Fresh order intake of $ 31 million in the quarter resulted in a pending order book of $ 76 million, executable over 12 months.

The operating margin stood at 20 per cent for the quarter ended March 31compared to 18 per cent in the same period last year. "The improvement in operating margins is due to a reduction in administrative and general costs and the fact that our BPM division broke even in the fourth quarter. General and administrative costs fell to 22 per cent of revenue in the financial year ended March 31, from 23 per cent the year before," Mr Arvind Thakur, CEO of NIIT Technologies, said at a conference.

During the period in reference, IT solutions contributed Rs 154.6 crore to the consolidated revenues, making up 93 per cent of the total pie, while Business Process Management business brought in revenues of Rs 11.6 crore. In all, the company added 253 people during the quarter, taking the total number of people engaged at the end of the year to 3,543.

For 2005-06, the company's net profit rose 13 per cent and ended higher at Rs 66.3 crore compared to Rs 58.5 crore in the previous year. The consolidated revenues were up 12 per cent to Rs 607.5 crore from Rs 543.2 crore the previous year. The operating profit was at Rs 115.6 crore, a rise of 19 per cent and the company posted an Earnings Per Share of Rs 17.15. The board of directors has announced an enhanced dividend of 60 per cent.

Europe continued to provide maximum share of business, representing 43 per cent of the total revenues while the US improved its contribution to 39 per cent during the year. The rest of the geographies contributed 18 per cent of the revenues.

"Share of revenues in the areas of focus (Banking Financial Services and Insurance, Transportation and Retail) increased to 75 per cent, representing a growth of 21 per cent," Mr Thakur said.

The company also plans to apply for a Special Economic Zone status for its upcoming campus at Greater Noida.

"In the first phase spread over the next 18-24 months, the campus will house 3,500 people and this will grow to 10,000 people in the next three phases," he said.