The global software solutions and learning solution major NIIT Ltd. reported a YoY 28% jump in its net profits to Rs 780 m in 3QFY01 on the revenues of Rs 2 bn. The growth in the topline was led by 49% jump in the software solution business which contributes 53% of its total revenues. The company's global revenues increased by 44% to Rs 3 bn.
The lower growth in profits is due to slower growth rate in its learning solution business which grew by 27%. NIIT's operating profit margins in the 3QFY01 declined by 2% to 43% due to a 52% jump in employee costs. The company's order intake recorded an impressive YoY increase of 101% during the 9 months period ended June 2000. It added 35 new international customers (23 new customers from USA).
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NIIT's e-revenue contributed 38% to its total sales ( 35% in second quarter ended March 2000). It has moved up the value chain by executing several e-consulting and e-strategy assignments for its customers. Responding to the transition in the education industry, the company has aggressively web-enabled its entire education curriculum in the last six months.
At the current market price of Rs 1,980 NIIT is trading at a P/E of 25 times its 3QFY01 annualised earnings. The valuations are not exactly comparable since NIIT generally book its revenues during the period April to September 2000. As a result profit margins and earnings are comparatively higher in the last two quarter.
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