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NIIT: Other income pushes up net

Apr 19, 2001

NIIT has posted a flat topline growth of 3.4% for 3QFY01 on a YoY basis. The growth in net profit figure is 31.4%. The company's other income has jumped on the sale of NIS Sparta and the on-line learning business. These sales have added Rs 125 m to the company's bottomline. Excluding this the net profits for 2QFY01 would have dropped by 3% compared to 2QFY00.

(Rs m) 2QFY00 2QFY01 Change
Sales 2,100 2,170 3.4%
Other Income 41 182 340.1%
Expenditure 1,659 1,700 2.4%
Operating Profit (EBDIT) 441 471 6.9%
Operating Profit Margin (%) 21.0% 21.7%  
Interest - -  
Depreciation 79 84 5.6%
Profit before Tax 403 569 41.4%
Tax 35 86 146.0%
Profit after Tax/(Loss) 368 483 31.4%
Net profit margin (%) 17.5% 22.3%  
Diluted number of shares 38.7 38.7  
Diluted Earnings per share* 38.1 50.0  
P/E (x)   11  

However, NIIT has been able to improve operating margins by 170 basis points YoY. For the first two quarters for the financial year the company has lower operating margins compared to the next two quarters.

The company's learning business is under pressure and expects a further drop of 30 to 40% in profits in the current year. NIIT added 28 new clients in 2QFY01 to diversify the client concentration.

At the current market price of Rs 560, the stock is trading at P/E multiple of 11 times its 2QFY01 annualised earnings.

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