NIIT Limited
Q2 FY26
Call date · October 28, 2025
1 · Management Commentary
Key Positives
- Q2 revenue at INR 1,049 million, up 16% Y-o-Y and 25% Q-o-Q, at the upper end of guidance.
- Order intake of INR 1,454 million, up 14% Y-o-Y and 37% Q-o-Q; strong momentum in tech and India enterprise segments.
- iamneo acquisition delivered a strong first full quarter; contributed INR 111 million revenue.
- 18 new customer logos added in the quarter across BFSI and technology.
- Sustained investments in AI, platforms, products, and brand strengthening competitiveness.
- EBITDA turned marginally positive at INR 13 million versus negative expectation.
Key Negatives
- BFSI segment faced soft hiring, deferrals in onboarding, and continued near-term hesitation.
- BFSI and others revenue down 12% Y-o-Y.
- Net other income declined to INR 82 million from INR 179 million last quarter due to mark-to-market losses on fixed income investments.
- Margins remain low due to ongoing investment phase.
Forward Guidance
- Capex for Q2 at INR 69 million; continued investment cycle.
- Q3 FY26 revenue growth guidance: 15%-18% Y-o-Y; margins expected to be low single digits.
- FY26 full-year revenue growth guidance: 15%-20% Y-o-Y, subject to macro stability.
- Ongoing investments in AI, platform, and product innovation; focus on deep-skilling SaaS, cyber security, EV, and manufacturing segments.
- Scheme of amalgamation to merge RPS Consulting and IFBI into NIIT Limited underway (8–12 months to conclude) for greater agility and operational simplicity.
- Active pipeline for inorganic growth; cash reserves earmarked for organic and inorganic expansion.
2 · Q&A Highlights
Q 1 (Composite): What is the rationale and expected benefit of the subsidiary reorganization and merger (RPS, IFBI) into NIIT Limited?
A (Management):
• Simplifies structure, increases agility, enables synergy, and reduces operational costs.
• Customers benefit from a stronger balance sheet and unified offerings; teams gain from integration.
• Cost savings from reduced KMPs and inter-company transactions; scheme filed and in process.
Q 2 (Composite): Are there new initiatives or segments being targeted, especially in manufacturing, EV, and cyber security?
A (Management):
• Focused on India enterprise, including manufacturing and automotive; building capabilities in EV and cyber security.
• Strengthened teams for these segments; will approach EV and cyber security with more focus in H2.
Q 3 (Composite): How is the company addressing upskilling, AI talent shortage, and leveraging the iamneo acquisition?
A (Management):
• Enterprise and consumer programs for upskilling in data science, machine learning, AI, and coding.
• iamneo platform enhances coding practice and assessment for students and enterprises; synergy opportunities with NIIT’s customer base.
Q 4 (Composite): What is the impact and traction from digital marketing and YouTube campaigns?
A (Management):
• gNIIT YouTube campaign saw millions of views and increased website traffic and conversions.
• NIIT’s YouTube channel crossed 50,000 subscribers in the last quarter.
Q 5 (Composite): Have there been price increases in top courses, and what are the best-selling programs?
A (Management):
• No standard fee escalation policy; courses are frequently updated and repackaged.
• Best-selling programs: Data Science, Machine Learning, Digital Marketing, and gNIIT; AI-focused programs to be launched soon.
Q 6 (Composite): Is the company considering high-end, niche courses (e.g., semiconductor design, advanced cyber security)?
A (Management):
• Constantly evaluating high-end, specialized courses; some offered via OEM partners through RPS subsidiary.
• No immediate launches in niche areas like fab design, but under consideration.
Q 7 (Composite): What is the outlook for other income and use of cash reserves (buybacks/dividends)?
A (Management):
• Other income decline is due to notional mark-to-market losses; expected to reverse with market trends.
• Cash reserves primarily for growth (organic/inorganic); distribution to shareholders subject to Board review.
Q 8 (Composite): Are PSU/government organizations being targeted for training offerings?
A (Management):
• Select PSUs are engaged; preference for private sector and large PSUs due to better payment and selection processes.
3 · Other Key Numbers
- Q2 order intake: INR 1,454 million (Enterprise: INR 850 million; Consumer: INR 604 million)
- Organic revenue (ex-iamneo): INR 939 million; organic growth 3.5% Y-o-Y, 19% Q-o-Q
- EBITDA: INR 13 million (vs. negative INR 63 million last quarter; INR 21 million last year)
- Depreciation: INR 73 million (vs. INR 67 million last quarter; INR 57 million last year)
- Net other income: INR 82 million (vs. INR 179 million last quarter)
- Profit after tax: INR 14 million; EPS: INR 0.1
- DSO days: 55 (vs. 56 last year; 53 last quarter)
- Capex: INR 69 million in Q2
- Cash and cash equivalents: INR 6,846 million (vs. INR 7,115 million last quarter)
- Dividend payment: INR 136 million; investment in iamneo: INR 101 million (within the quarter)
- Enterprise revenue: INR 703 million (up 10% Y-o-Y, 22% Q-o-Q)
- Consumer revenue: INR 347 million (up 29% Y-o-Y, 30% Q-o-Q)
- Technology programs revenue: INR 761 million (up 31% Y-o-Y, 30% Q-o-Q)
- BFSI and others revenue: INR 288 million (down 12% Y-o-Y, up 14% Q-o-Q)
- Tech-to-BFSI revenue ratio: 73:27 (vs. 64:36 last year)
- OEM partnerships: 37
- Active corporate customers: 200+
- Repeat business: >90% of revenue
- YouTube channel subscribers: crossed 50,000 in last quarter
- Number of new customers/logos added: 18 in the quarter
- Exceptional item: INR 23.8 million (severance cost in China subsidiary)
- Top-selling programs: Data Science, Machine Learning, Digital Marketing, gNIIT
- Number of new courses launched in last financial year: Not disclosed
- Price increases in top courses: No standard escalation; not specifically disclosed