NIIT Learning Systems (NIITMTS) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached INR 3,974 million, up 4% year-on-year but down 2% sequentially due to seasonal factors and weaker customer sentiment despite positive economic indicators.

• PAT for Q2 was INR 570 million, up 22% year-on-year; EPS at 4.2, up 21% year-on-year.

• Business resilience maintained amid uncertainty, with strong customer additions, robust contract renewals, and outsourcing activity picking up.

• Revenue visibility increased to INR 368 million from INR 330 million last quarter.

• The Board approved consolidated and standalone unaudited financial results for the quarter and half year ended September 30, 2024.

Financial highlights

• EBITDA was INR 936 million, up 3% year-on-year but down 9% quarter-on-quarter; EBITDA margin at 24%, down 27 bps year-on-year.

• Operational PBT at INR 745 million, up 11% year-on-year and down 8% sequentially.

• Treasury income at INR 117 million; acquisition-related expenses at INR 91 million; foreign exchange loss of INR 40 million.

• Depreciation & amortization at INR 153 million, down 10% year-on-year.

• Basic EPS for Q2 FY25 was INR 4.20, compared to INR 3.48 in Q2 FY24.

Outlook and guidance

• Full-year constant currency growth now expected at 7%+, revised down from 12-14% due to delayed ramp-up and customer spending cuts.

• Margins expected at the higher end of 22-24% guidance.

• Sequential growth anticipated in Q3 and Q4, with double-digit year-on-year growth expected in Q4.

• Macro uncertainty persists due to high rates, geopolitical conflicts, and upcoming elections.

• Outsourcing conversations increasing, driven by transformation and cost pressures.