NIIT (NIITLTD) Q4 04/05 earnings summary

Executive summary

• FY05 consolidated revenue was Rs.3,984 Mn and PAT after associates’ share was Rs.356 Mn; prior-period comparisons cover 18 months and include six months of the transferred Global Solutions Business, limiting comparability.

• On a 12-month comparative basis, system-wide revenue rose 11% YoY to Rs.6,363 Mn, operating profit increased 106% to Rs.490 Mn and PAT grew 88% to Rs.356 Mn.

• Domestic IT training retained its market-leading position; growth came alongside expanded school and international operations and new career and technology programs.

Financial highlights

• Consolidated revenue from operations was Rs.3,984 Mn; profit before tax and associates’ share was Rs.217 Mn, and PAT after associates’ share was Rs.356 Mn.

• Consolidated EPS was Rs.18.02 versus Rs.2.47 for the prior 18-month period; equity-shareholder profit was Rs.348 Mn after subsidiary preference dividends and minority interest.

• Parent-only revenue from operations was Rs.2,827 Mn, net profit Rs.160 Mn and EPS Rs.8.26; prior-period figures covered 18 months and are not directly comparable.

• Adjusted 12-month comparison: net revenue increased 11% to Rs.3,984 Mn; operating margin reached 12%, up 567 bps, and PAT margin was 8.95%, up 367 bps.

• Board recommended a Rs.5.50/share dividend, compared with Rs.5.00/share in the previous year; Rs.16 Mn was transferred to general reserves.

Outlook and guidance

• FY06 industry outlook cited Indian IT software and ITES export growth of 30–32%, domestic growth of 25%, and global IT education and training market CAGR of 4.3% through 2008.

• Priorities include growing engineering and career programs, emerging-technology offerings, school cost leadership, international higher-education solutions and European expansion through a proposed UK subsidiary.

• Plans include specialized higher-learning and research institutes and a proposed global university with industry-linked, technology-based programs, subject to deemed-university approval and applicable rules.

• Management expected further revenue growth and corresponding profitability improvement, supported by cost management, partnerships and expanded custom-content and e-learning services.