NIIT Technologies has declared its third quarter results. The company's standalone net sales were at Rs 128.3 crore versus Rs 134 crore on quarter-on-quarter (QoQ) basis. The company's standalone net profit was at Rs 12 crore versus Rs 29.4 crore on QoQ basis. Its consolidated revenue was at Rs 248.5 crore versus Rs 258.7 crore on QoQ basis.
Arvind Thakur, CEO, NIIT Technology, said that the company took a Rs 18.9 crore hit on revenues on account of mark-to-market losses. He informed CNBC-TV18 that the company has forward contracts of about USD 220 million hedged over a period of 30 months. “These forward covers have been taken at an average rate of Rs 41.50 to a dollar. If the rupee appreciates, this overhang on our revenues would reduce.”
Here is a verbatim transcript of the exclusive interview with Arvin Thakur on CNBC-TV18. Also watch the accompanying video.
Q: You’ve got your consolidated net sales up at about 6% odd. The net profit is down at about 52%. Now on account of adoption AS 30, we have seen that Rs 18.9 crore hit on your MTM – can you just take us through the quarter as to what have been the pressure points and has it been primarily the forex front that has caused this bottomline pain?
A: Absolutely correct and it is predominately on account of forex. As a result of MTM, we had to bear a revenue loss of Rs 18.9 crore on our topline and further because the pound sterling declined dramatically during the quarter by almost 18%. We had to book a net exchange loss on our accounts as receivables and payables in our other income, which together contributed to about another Rs 13.9 crore. That pulled down our net margins.
Q: What would your outstanding hedge positions be currently and do you sense any reversal could benefit your MTM now going forward?
A: We have forward contracts of about USD 220 million and this is hedged over a period of 30 months. These forward covers have been taken at an average rate of Rs 41.50 to a dollar. So yes indeed if the rupee appreciates obviously this overhang on our revenues would reduce.
Q: Could you give me some sort of an outlook in terms of what the volume picture would be going forward even in terms of pricing and your client picture and has the integration of ROOM Solutions happened completely now?
A: Yes indeed. ROOM Solutions is completely integrated. In fact, it is a key element of our growth strategy going forward; we are looking at moving our business to become more nonlinear and platform-based. October 2, 2008 was when we launched a new framework for insurance processing for which we have already acquired two new customers and hopefully that will pan out well for us going forward into the future.
More importantly, this quarter is characterized by a record intake of business – we booked USD 148 million of business in this quarter, which has been the maximum we have done in any quarter so far.
Q: A quick word on the outlook?
A: We don’t give any guidance when we talk about our results but certainly we can see order intake improving dramatically. So hopefully that will pan out well for us in the future.
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