Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
NIIT Learning Systems Ltd. (NSE: NIITMTS) Q4 2026 Earnings Call dated May. 12, 2026
Corporate Participants:
Sapnesh Lalla — Executive Director and Chief Executive Officer
Sanjay Mal — Chief Financial Officer
Vijay Thadani — Managing Director and Vice chairman
Analysts:
Bharat Gulati — Analyst
Unidentified Participant
Ganesh Shetty — Analyst
Pranaya Jain — Analyst
Yohan Khinvasara — Analyst
Gaurav Nigam — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to NIIT Learning Systems Limited Q4FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sapnesh Lala, CEO and Executive Director, NIIT Learning Systems Limited.
Thank you and over to you.
Sapnesh Lalla — Executive Director and Chief Executive Officer
Thank you and thank you and good afternoon everyone. Thanks for joining the NIIT Learning Systems Limited’s Q4FY26 earnings call and thank you for your continued interest in the company. Our agenda is today to discuss the Q4 and FY26 financial and operating performance, the progress on our AI first strategy and AI enabled revenues. Update on inorganic activity completed during the quarter. Discuss the path ahead and then open it up for any questions. First, let me set the context for this quarter.
As you all might be aware, the global environment continues to remain uncertain. Client decision making cycles are still elongated and discretionary spending continues to be closely scrutinized. At the same time, we continue to see sustained demand for outsourcing and operating model transformation as clients focus on cost agility and productivity. We continue to see wallet share expansion across a wide range of our clients. Though the overall environment remains dynamic, AI is continuing its rapid march to becoming mainstream with significant investments by early movers across segments.
This represents a once in a lifetime opportunity for us and nowhere is this more consequential than in enterprise learning and development. AI is fundamentally changing what learning and development can deliver and NLSL is at the forefront of that transformation. I will come back to this topic of AI in detail before we open up for questions, but let me say up front, we believe we are building something that will redefine how enterprises develop their people and this investment will not only supersize our opportunity, but set us apart distinctively in this context.
As we closed out the year and the fourth quarter, our revenue for Q4 was at 5252 million. INR was up 5% quarter on quarter and 22% year on year. In constant currency terms, we grew 2% QoQ and 14% year on year, including contributions from inorganic acquisitions including MST and Sweetrush. Excluding our North American Real Estate training contract which closed in September of or June of 2025, Q4 revenue was up 31% year on year 25% in US dollar terms at the overall level and 18% year on year for the organic business 12% in US dollar terms.
I want to be Direct revenue came in below our expectations. A couple of large clients made transient but material reductions to their year end LND budgets as they recalibrated in response to increased macro uncertainty. We view this as timing driven, not structural, and our ongoing engagement with both those clients confirms that view. Q4 EBITDA was at 1002 million, was up 16.8% year on year at a margin of 19%. Excluding Sweetrush that joined the NIIT family during the quarter and seasonally at its weakest quarter and early in its integration with NIIT, the margin was about 20%.
Consistent with our full year delivery of 20.3%. Depreciation and amortization was at rupees 205 million versus 194 in the previous quarter. Net other income of 144 million versus 3 million last year and 104 million last quarter including treasury income of 36 million lower year on year primarily due to mark to market impact of interest rate changes during the period. Net exceptional gain of rupees 286 million comprising of a gain of 455 million due to fair value adjustment in future acquisition liability on account of St Charles Consulting Group transaction related expenses of 77 million INR predominantly on account of acquisition of SweetRush and a prudent provision of 92 million against carrying value of a minority strategic investment we had made in April of last year.
Foreign Exchange loss of rupees 52 million net other expenses of 51 million, net finance cost of 76 million. The tax was at 169 million INR. Effective tax rate was 18% versus 22% in the previous quarter primarily due to no tax on gain from adjustment in future acquisition liabilities. PAT was at 771 million INR was up 58% year on year with EPS of rupees 5.61 versus rupees 5.42 in the previous quarter and 3.58 previous year. During the quarter we signed five new long term annuity clients taking the total additions during the year.
21 new clients for the quarter included a global leader in data centers and digital infrastructure, two of the world’s leading financial institutions, a major EV battery manufacturer building gigafactories across North America and Europe, a Fortune 50 global technology company and one of the largest world’s largest PC and enterprise infrastructure providers. We also completed two renewals and delivered two scope expansions. As a result, our long term annuity clients tally has increased to 110 at the end of the quarter and the revenue visibility improved to US dollars 459 million.
This is up from US dollars 415 million the previous quarter and US dollars 390 million. The increase reflects strong new bookings during the quarter which include expansion of an existing top 20 client into a top 5 client. For the full year. FY26 was strong broad based soft strong broad based growth with full year revenue at 19,520 million. It was up 18.1% year on year and up 11% in constant currency. Organic revenue grew 13% year on year and 7% in constant currency. Excluding the North American Real Estate training contract which concluded In September of 2025, organic growth was 14% in US dollar terms.
EBITDA for the year was 3957 million. INR at a margin of 20.3% within our guided range of 20 to 21% reflecting continued delivery discipline alongside targeted growth investments. PAT for the year was 2,477 million. INR was up 9% year on year. An EPS of 18.09 per share. Growth was driven by ramp ups and wallet share expansion within our existing client base. Revenue from existing clients grew 4% year on year. This was complemented by Helve new Logo Edition as well as contributions from MST and Sweetrush.
Top 5 clients contributed 32% to the full year revenue, top 10 contributed 50% and top 20 contributed 69% of revenue. Among our customers. Each of our top 5 clients contributed over US dollars. 10 million in revenue in FY26 and each of our next 8 clients contributed between 5 and 10 million. Our acquisitions are shaping well. MST added a new annuity client and delivered a significant scope expansion during the quarter. Wetrush expanded its engagement with a top 20 global pharma company, an early proof point of the strategic value of that acquisition.
This performance places us clearly ahead of our peer group and both on growth and profitability and as we enter FY27 we have a stronger platform than we had 12 months ago. The balance sheet and cash flow metrics remain strong. DSO stood at 65 days as compared to 74 days previous quarter days. Last year cash and cash equivalents were at 9,366 million. The net cash was at 6,692 million. Operating cash flow for FY26 was at 3,101 million as compared to 2,595 million last year. Free cash flow for the quarter for the year was 2,657 million INR versus 2,123 million INR.
The headcount stood at 2,546 at the year end 136 year on year and up 113 quarter on quarter on January 9th. As we have mentioned earlier, over 100 street Russians joined the NIIT family across the United States and Costa Rica Strengthening our creative and human centered but AI enabled Learning capabilities Let me spend a couple of minutes on the inorganic growth that we witnessed over the last year. During FY26 we completed two strategic acquisitions that meaningfully expand our capabilities and geographic reach.
MST Group, a leading managed learning services provider in the dark region serving marquee clients across automotive, industrials and energy sectors. Establishes our presence in Germany, Europe’s largest economy and is a meaningful step in building out our European platform. Strong client profile with long standing relationships in structurally important sectors undergoing significant workforce transformation. Integration is progressing well. Q4 already delivered a scope expansion with an existing key client and a new logo addition an early validation of the acquisition thesis and of the cross sell opportunity between MST and an IIT Sweetrush completed early in Q4 an award winning provider of human centered AI enabled learning experiences, XR immersive experiences, certifications and strategic training interventions serving Fortune 1000 corporations and professional associations.
Acquisition of Sweetrash moves our mix up the value chain into outcome led performance critical learning with a high quality and sticky client base. The Synergy Roadmap centers on converting project work into comprehensive long term engagement and we are starting to see early green shoots. Margins will build progressively over approximately 6/4 reflecting the businesses meaningful seasonality. EPS accretion expected from FY27 another couple of minutes on market update. As I stated in my opening, the market volatility continues to heighten the emphasis on cost optimization prompting increased client engagement on large scale cost takeout and transformation initiatives.
Although decision making cycles continue to be prolonged, AI and its profound impact on the practice of L and D is real and starting to become visible. Early adopters are starting to take advantage of AI with our assistance. We think this has the potential to become a multi year growth opportunity for nlsl. We believe NLSL is very well positioned to capture a disproportionate share of these opportunities underpinned by continued investments in capabilities including AI consulting and advisory services and in go to market with a focused effort on wallet share expansion across our existing client base.
A strong brand as a trusted and reliable market leader. Our deal pipeline remains robust with active opportunities across large opportunities, outsourcing, deal spending, technology, automotive, life sciences, BFSI and other sectors. We continue to see accelerating structural transformation across the industries we serve, driven by digitization, decarbonization, biopharma innovation and now, more importantly, AI. Many organizations are actively restructuring to improve cost agility, fueling increased demand for outsourcing.
This environment is triggering an uptick in outsourcing activity and NLSL is uniquely positioned to capitalize, especially as select competitors face strategic or operational distractions. However, we would like to point out that due to the significant market uncertainty, the decision making cycles have been stretched and are likely to stay stretched till the market uncertainty continues. For our guidance, we want to limit the guidance to the fiscal year 2027. We enter the year with greater revenue visibility.
It gives us a strong foundation heading into the year. That said, the macroeconomic environment remains uncertain and decision cycles continue to be elongated. We expect this to influence the pace of new ramp ups, particularly in the near term. For FY27, we expect the revenue to grow in high single digits. Subject to the macroeconomic environment, we remain confident in our ability to outperform the market through this cycle. On margins, we expect 18 to 20% EBITDA margin for the full year, reflecting continued delivery discipline and phased margin build in sweetrush as the business scales as well as integrates fully within the NIIT system.
Given our investments, we expect 18% margins in the first quarter before we open for questions, I wanted to come back to the theme I flagged at the outset, AI and the transformation of the Enterprise Learning. I wanted to spend a minute on the progress on AI enablement we have witnessed or we have driven. As shared earlier, we made significant progress in building our AI capability continue to have a pole position in the LND market as acknowledged by our clients and industry analysts. NLSL was independently recognized as a market leader in the Fosware AI market assessment in 2025.
Assessment 2025 for digital learning, the first in depth independent study of AI application in LND market assessments have revealed a significant gap in competitors say do ratios that is majority of the AI features promised across the market have not yet been have not yet gone live with clients. In contrast, NLSL have delivered on every capability that we have promised and our clients are seeing tangible results. We have testimonials from multiple clients on measurable impact. One of our clients saw their sales pipeline improve by over 1 million on average over 6 months following or AI enabled simulations and coaching deployment.
Another saw time to Proficiency on methodology adoption shrink from one and a half years to six months. This builds on a recognition as a strategic leader in the Fosware 9 grid for digital learning for the third consecutive year. NIIT has always been at the cutting edge of technology and learning. Our AI first strategy in learning has evolved into a considerable point of differentiation for us. We have gone live with a number of enterprise deployments of our AI solutions. Notably, total AI enabled revenue continues to grow as a share of business this quarter.
The share of business AI enabled business this quarter was approximately 13%. I wanted to spend a couple of minutes to talk about AI led transformation for the learning industry and our architecture to address this once in a lifetime opportunity. The L and D industry has always faced a fundamental constraint. Individual coaching, the most effective form of learning, has never been economically viable at scale. AI enables us to remove that constraint and we believe the company that builds the right platform to deliver on this will own a large and durable share of enterprise LND spending for years to come.
That is the opportunity we are going after. To that end, our dedicated AI learning practice is developing a three component self improving learning platform. First, an AI coach. This replaces passive content delivery with personalized interactive coaching for every learner whether they are working on long term career development or preparing for a critical client meeting tomorrow morning. Second, a simulation manager. This connects the learner to configurable realistic practice environments. The AI coach identifies the right simulation for each learner in real time and custom configures it to their specific needs.
And then finally a third, a signal engine. This continuously scans organization wide performance data to identify skill gaps, measures whether the training was actually moved, whether the training has actually moved. Business outcomes feeds those results back to sharpening the system over time. This is what turns the platform from a learning tool to a continuously improving performance system. There’s a second structural driver of demand that we believe is underappreciated. Currently, junior employees build their judgment by doing routine tasks.
The reputation and exposure of entry level work was how people develop their experience, the experience needed to take on senior responsibilities. AI is now automating much of the entry level work. Enterprises are consequently grappling with a new problem. How do they develop judgment and senior level capability in their people without that traditional on the job exposure? Simulation engines which use AI to generate large numbers of realistic dynamic scenarios are precisely the answer to that question.
They create a synthetic workload that accelerates judgment formation in a fraction of the time it used to take in traditional work environment traditional training. This proprietary intellectual property, this is Proprietary intellectual property owned by an IIT learning systems and it positions us to capture a significant share of the incremental opportunity that AI displacement is creating commercially. We are using a component level pricing model with natural expansion economics built in. We are validating the model and the measurement story through lighthouse deployments and engaging our client advisory board for stress test both the evidence and the commercial framing.
The organizational build is underway alongside new AI native practices covering performance, consulting, simulation, design and deployment, coaching, configuration and the build out of our sensing and signaling engine. Today we have over 100 senior AI learning and science experts engaged in building AI solutions and products. A depth of investment that very few if any peers can match. Like I pointed out earlier, AI enabled revenue now makes up more than 13% of our total revenue. We have no doubt that this percentage will keep growing as AI becomes the default mode of delivery across the industry.
This investment will enable us to to compete more effectively and support internal LND teams who are overwhelmed by the pace of change and the expectation to move the needle on enterprise capability and performance. Over time, we expect the internal LND organization to shift from an operator role to an orchestrator role. That transition represents an enormous and still largely untapped opportunity for nls. And with the investments we are making, we believe we are uniquely positioned to capture this opportunity.
Thanks for your time and now I’ll open up the floor for any questions.
Operator
Thank you very much. Operator. Yes sir. Ladies and gentlemen,
Sapnesh Lalla — Executive Director and Chief Executive Officer
Go ahead, go ahead with the questions.
Questions and Answers:
Operator
Yes, thank you. Ladies and gentlemen, we will now begin the question and answer session. Session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Bharat Kulati from Dallal and Docha.
Please go ahead.
Bharat Gulati
Yeah, hi. Thank you for the opportunity I just had. My first question was regarding the bookkeeping question. Just wanted to understand the hundred crores of EBITDA that we achieved and the 19% margin that we are showing. I’m not able to tally that up with my numbers because the only thing that we add back is the Forex and if we exclude that our EBITDA stands at around 7,86 million. So just wanted to understand what that mismatch was. If you can help me out.
Sanjay Mal
So our finance team will work it out for you. But meanwhile maybe you have another question. We can get another.
Bharat Gulati
Just trying to understand the shoot up that we’ve seen in you know, employee cost and outsourcing cost which as a percentage of our sales has also gone up. Is that what range is going to continue to be in or should we see that taper down as more leverage comes in?
Sapnesh Lalla
I can respond on the outsourcing cost. As I’ve mentioned in the past on these calls, we have tried to limit the overall headcount in the company and relied more on contractors to deliver on growth given the significant uncertainty in the market.
Vijay Thadani
So. To reconcile the ebitda, there are a couple of other for the whole year heads which are there which are to do with the CSR component and also some indirect tax related provision which we have made. Okay, so that one
Bharat Gulati
Off again, that would be fair to assume.
Vijay Thadani
Yeah, that’s correct.
Bharat Gulati
Got it. And yeah, just on the employee cost again, you know, we’ve seen a spike in this quarter of about 46% of sales as now on employee cost. So just trying to understand is this the trajectory, is this because of the acquisition that we’ve made that is much lower margin than our overall business. And you know, just trying to understand how will this margin trend going forward on a reported basis more to speak, you know, because on an adjusted basis surely we can achieve that 18%. But the Delta between our adjusted and reported is always of 120, 130 basis points which is pretty significant.
You know. So just trying to understand when can we see that delta also convergence.
Sanjay Mal
First of all, I don’t know. I’m. We are finding it hard to reconcile the numbers that you are referring to. So is it okay if we do it offline with you and then we’ll of course inform everybody else?
Bharat Gulati
Sure. So I’m just trying to understand. We normally
Sanjay Mal
Don’t have. Yeah, I, I don’t recollect ever having to reconcile the numbers we have declared with ever. But nevertheless there is always a first time. So I will Kapil and Mr. Sanjay Mall, our CFO, they’ll be in touch with you and they will clarify the whole situation.
Bharat Gulati
No, that’s completely fine. Just trying to understand going forward on future ebitda, just trying to understand what kind of, what kind of margins. I mean I understand you guided for 18 to 20% but how do we, you know, how can we expect that upper band being hit and you know, just trying to understand how will cost be going forward? You know, is this. No, no. So if you’re
Sanjay Mal
Wanting to understand how upper, upper end of the margin will be achieved that I think Sapnesh will be happy to explain.
Sapnesh Lalla
Yeah, like I said in my opening comments that we are starting to integrate Sweetrush within niit. Given their size and scale currently and the fact that this past quarter is among their weakest quarters, we think that over the next few quarters their margin will start ramping up as their accounting system starts to integrate with our accounting system and methodology. And so I think to some extent it is a question of seasonality and to some extent it’s the question of integration. We should have these sorted over the next couple of quarters.
Bharat Gulati
Got it, got it. So that’s helpful. Traditionally
Sanjay Mal
We have been at 20% margin plus company and I don’t see that changing in near future.
Bharat Gulati
Got it, sir. Fair enough. And just trying to understand that on the growth front, you know, X of acquisitions, if we just look at organic growth for this quarter in dollar terms, what would have that been on a yoy basis? If that could be quantifiable
Sapnesh Lalla
Ex off acquisitions, our growth for this quarter would have been about 3% dollar terms.
Bharat Gulati
That would be on a YOY basis.
Sapnesh Lalla
No, on a Q of Q basis. On a y, on a one second basis, about 2% in constant currency and 3% in dollar terms.
Bharat Gulati
Got it, got it. And just the last question regarding our tech and telecom vertical has seen a sharp drop quarter on quarter in terms of growth. So is there something specific? Is there a ramp down with some customer? Because we were seeing a good run up in growth in that quarter for the in that vertical for the past four, five quarters.
Sapnesh Lalla
Yeah. Like I pointed out, one of our clients, given the uncertainty and the fact that their fiscal year end coincides with ours pulled back temporarily but materially, the budget allocated towards L and D, we think that from a long term perspective, this is not a reflection of reduced overall spend, but they needed to pull back the expense towards training this past quarter.
Bharat Gulati
Got it, got it. And trying to understand directionally the acquisitions that we’ve made. You know, historically the St. Charles business didn’t pan out like we wanted to. So just trying to understand what gives us the confidence that these acquisitions two years down the line, three years down the line is going to, you know, grow at the same 20% kind of pace that we initially intended the business to grow at.
Sapnesh Lalla
So first of all, I wanted to mention that the St. Charles acquisition has actually worked out quite well for us. We’ve been able to establish our consulting practice which enables us to be more consultative and provide advisory services to our clients. We also have been able to create a significant vertical in professional services vertical as far as market volatility is concerned, the events of the last three years have been unprecedented and this volatility will probably continue over the next few quarters that I don’t think anyone can do a hell of a lot about.
But overall, St. Charles joining NIIT has been a good thing and we are very satisfied with their performance.
Sanjay Mal
And you may just say a word about MST and the new breakthroughs you have.
Sapnesh Lalla
Yeah, I mean like I pointed out, while MST and through MST penetration in the dark region, we made the acquisition sometime in July and we are already starting to see addition of new logos as well as logo expansion, cross sell opportunities. Likewise, as I pointed out, we saw a significant expansion in a top 20 pharma client with SweetRush. So I do expect the amount of time and diligence we do for these acquisitions will come in and make us more successful.
Bharat Gulati
Got it, Got it. Thank you sir. That’s it from my side. Thank you.
Operator
Thank you.
Sapnesh Lalla
Thank you.
Operator
We’ll take our next question from the line of Rahul Jain from Dalet Capital. Please go ahead.
Bharat Gulati
Hello. Thanks for the opportunity. Just wanted to have a clarification. This high single digit growth that we guided, is this on organic basis? If yes, can you clarify what the overall growth guidance is?
Sapnesh Lalla
This is overall growth guidance.
Bharat Gulati
Okay. So high single digit includes the Sweetresh
Sapnesh Lalla
Consolidation.
Bharat Gulati
Yeah. Okay. So that way the question should be then what is the implied organic growth in this assumption?
Vijay Thadani
Marginal.
Sanjay Mal
Look, at this point of time, whatever numbers we are talking about, they are at best our best judgment and can swing widely given the uncertainty in the market. I want to remind you that you only pointed out that in the quarters when everything is sewed up nowadays there are changes which are taking place. Talked about our technology client who suddenly pulled back his expenses. This is very, it’s beginning to happen quite often. So we have a very good order intake, we have a very good contract intake, we have very strong clientele, we have net revenue retention which is very, very significant.
I think that is what the confidence is coming from how this year will pan out. I think this is our conservative basis estimate. We will have to see and guide you better quarter on quarter coming quarters double digit is looking fairly significant and achievable. Would that be right coming quarters year on year? Double digit growth? Yeah.
Unidentified Participant
High single digit, but close to. Yeah,
Bharat Gulati
Yeah. Okay. Okay. So I mean I understand where you’re coming from but you know some of these data points, when we highlight that our XOF Rico growth is so high and this visibility and everything. I think if, if it is, if you could reconsider at a different point of time a more wider band of guidance to probably explain what could be the possible outcomes. Because this number, if I include Sweet Rush probably reflects a significant deceleration. So it does not match us with the confidence generally that we are talking in our commentary.
Sanjay Mal
You may want to respond to that. I what he’s talking about. He’s talking about in the coming quarter the growth that you are seeking or you are guiding and compare that with how if you add Sweet Rush. Sweet Rush is still in wrap up state. So just explain without Sweet Rush all like this.
Sapnesh Lalla
Yeah. Like I pointed out, there is significant volatility. So it’s hard to be definitive about our guidance. Think that our guidance will be in the high single digit range from an overall perspective.
Bharat Gulati
Okay, let me ask in a different way. I mean I think we mentioned about our confluence 26 happening and another event around client advisory board generally what sense you’re getting from it. I understand this happened in Feb and world has changed after that. So in general from Confluence 26 or any other conversation, how you think the thought process are evolving with this macro inputs that we have.
Sapnesh Lalla
So like I pointed out, there is uncertainty in the market. We were not expecting the pullback that we saw in a couple of large clients till early February or actually till mid February, but it happened. So it’s hard to tell where things might settle. In our conversations with our clients, they seem very confident our abilities, they are open to trying out new things. They are being pushed to take cost out given the uncertainty that their own businesses are seeing. There is a cost layering because of uncertainty in their in our clients overall business.
So there is caution on discretionary spend. How long will that caution last? It’s hard to tell. But at this time given the uncertainty, there is a cautious approach and therefore we’ve been very conservative in giving an outlook.
Bharat Gulati
Sure, sure. Just last one from my side if you could share what was the visibility or MTS client addition that has come from Sweetresh or have we not included that in our operating metrics?
Sapnesh Lalla
We’ve included a conservative estimate of visibility from SweetRush.
Bharat Gulati
Okay, so the current number have those inclusion as well.
Sapnesh Lalla
Yes,
Bharat Gulati
Sure, sure. Thank you. That’s it. From my side and I’ll fall back in the queue.
Operator
Thank you. Next question is from the line of Kunal Tokas from Fair Value Capital. Please go ahead.
Bharat Gulati
Hello, I’m audible.
Operator
Yes, Kunal, please go ahead.
Bharat Gulati
Okay. Okay, thank you sir. My first Question is right now the environment, as we have been saying constantly for the last few earnings call as well, is very uncertain and people are still finding new use cases, new ways to use AI. So the question is that when AI technology becomes more widespread and its users have become established, maybe saying in a few years, do you think this technology will reduce or will it widen the gap between, between you and your competitors, between the competitors in the MTS space?
Sapnesh Lalla
So as I pointed out in my earlier comments, our AI enabled revenue has gone up quarter on quarter. It was at about 11% in the previous quarter and now it’s more than 13%. We are seeing more adoption of AI enabled services with our clients specifically as they create value for our clients. Our clients are quite discerning and they don’t want AI enabled solutions for the heck of it. They want AI enabled solutions that will move the needle on performance. We think that our investments in AI, both in terms of people as well as build out of technology, will enable us to create distance between ourselves and our competitors.
Bharat Gulati
In what ways would you say the variables that matter, the competitive advantage that mattered before AI, in what ways has that changed? I mean, what variables mattered before the onset of AI? And what variables do you think will matter more now that AI is here? From the client perspective when they want to select a vendor,
Sapnesh Lalla
The biggest variable that will start changing is the movement from training to capability building and performance improvement. I think that’s the most significant variable that’s likely to change. In the past, most measurement of LND was focused on how much training can you build and how much can you deliver. I think as we move forward the measurement would be on how much can you improve capability, how much can you improve performance? That’s going to become the measure and I think AI enables us to create that connection between LND investment and performance improvement.
Bharat Gulati
Okay, sir. And can you also please talk about the, if I understood it correctly, the proprietary simulation engine that you are building.
Sapnesh Lalla
So the best way to learn something is to practice it as you are practicing, if you make mistakes to get feedback or coaching on. So I don’t know if you played a sport, but to learn how to play a sport well, you often have to practice a lot and it helps if you have a coach who could give you feedback on what you’re doing right versus what you’re doing wrong and if you’re doing something wrong, how to fix it. I think the investments in simulation engine as well as coaching enable us to allow a student to practice in a safe environment and then with coaching Enable them to get feedback on what worked and what didn’t work and then have them try it over and over again till they get it right.
Bharat Gulati
Will this be sold as a separate product or will this be incorporated into the whole spectrum of services that you provide?
Sapnesh Lalla
We think our clients would like both the product and the services because there is. While there is value in just buying the product. But for a simulation to be really good, not only do you need a good simulation builder, but also expert learning and development professionals who could understand the situation that a client is in and build the right simulations for them. So we think that it will be both the simulation builder as well as. Because the clients are looking for performance improvement.
And for that they would need the right simulations which would need the right simulation builder, but also the expertise to build them.
Bharat Gulati
Okay, and the last question will be, given the nature of the technology, how revolutionary it is, it is. It can become. People will have different views about the future of this technology. So is there anything that your competitors are doing that you have constant, consciously take away from that you study, but you thought that it was not the right path to pursue in terms of AI, in terms of your future strategy?
Sapnesh Lalla
I actually could not quite get your question. Can you say it again? What our competitors are doing, but we’ve decided not to do it.
Bharat Gulati
That was a big yes, please
Sapnesh Lalla
Go ahead.
Bharat Gulati
I wanted to emphasize some conscious decision that your competitor thinks is the right thing to do for the future and an important thing, but that you thought was maybe not the wise decision and you took a different path.
Sapnesh Lalla
Some choices that we have evaluated in great depth have been should we just become a platform company or should we retain our service ethos while investing in platforms. And we deliberated a lot on that choice and we decided to stay the course on being a service company but deeply enabled with investments in platforms and technologies so that our services can be built on top of technologies to ensure an efficient build up.
Bharat Gulati
All right, sir. Got it. Thank you very much and have a good day.
Operator
Thank you. We’ll take our next question from the line of Shankara Narayanan from. I thought pms. Please go ahead.
Bharat Gulati
Good evening, sir. Am I audible?
Operator
Yes, Please go ahead.
Bharat Gulati
Yes. Yes, sir. Thanks for the opportunity. My first question is on our contract tenure. Earlier, it used to be in the range of three to five years. So because of a. Do you see any shrinkage in the contract tenure?
Sapnesh Lalla
We haven’t seen any shrinkage in terms of contract tenures.
Bharat Gulati
Okay. We
Sapnesh Lalla
Don’t expect that to happen either.
Bharat Gulati
Got it. Regarding our content creation business what kind of productivity are you seeing because of the implementation of AI and whether if the productivity is being reinvested back to you or it is taken back by your client?
Sapnesh Lalla
I think what we are starting to see is a departure from creating content the way content was created in the past. So our clients who are starting to take advantage of AI are starting to look at investments in content which are more immersive and more simulation oriented. That’s where we are seeing the move. We are not seeing clients looking for creating the same thing for less. Yeah, some of them for lower level training or compliance related training would sometime look at build out of larger amount of content for the same cost.
But more of our clients are looking at improving the immersive nature of content as compared to creating training that actually does not provide great outcomes.
Bharat Gulati
So does that mean the legacy portion or the legacy mix of content creation is being slowly moving away towards immersive learning so that the price stability that we are seeing in the content creation business, will it remain same in the upcoming years?
Sapnesh Lalla
I think it will progressively move towards immersive content. It will take time. It’s not a switch that you control, but it will content creation will move towards immersive content creation and simulation build outs and deployment.
Bharat Gulati
Got it. And finally recently one of our large tech client who is into infrastructure management, they have planned to announce layoffs for this financial year. So have you accounted that into our revenue growth estimates in FY27?
Sapnesh Lalla
Actually these dynamics are very interesting. So while there is headcount movement going on across a very large number of our clients, what they are also realizing is that the skills needed for their employees are changing at a very rapid pace. So while there is change in number of employees that exist at an enterprise, there is very significant increase in the need for deeper skills, different skills. So there is this movement where there may be fewer employees but their need for training is increasing.
So we are seeing that balancing scenario.
Bharat Gulati
So the reduction in revenue in the top segment tech and telecom, it is not tied to the layoffs or the AI productivity, it’s just the budget cuts by the client.
Sapnesh Lalla
Yes, it’s a temporary budget pullback. I’ll give you an example. You know, I’m assuming the reason why
Bharat Gulati
I’m asking this question is because LND budget, it’s attained number of headcount into investment per headcount. So that budget is getting.
Sapnesh Lalla
Yeah, that’s destroyed exactly what I wanted to answer.
Bharat Gulati
Yeah, yeah, that’s
Sapnesh Lalla
Exactly what I wanted to address. So while you are right on an average across many years. The thesis that you said is right. But when there is significant change. So for example, I’m sure you’re familiar with IT services companies. I’m sure you see headlines that the role of programmers is changing dramatically. Also see that programmers should gain 60, 70% in terms of efficiency and won’t need programming skills over time. But I think what you would also start seeing is that new roles such as forward deployed engineers are starting to become very important for the growth of most IT services companies.
Now till recently that role did not exist. But as enterprise and enterprises have to build out these new roles and these are roles which you can’t hire for, these roles will then start being created by employees who are getting displaced through training and that starts to become our opportunity.
Bharat Gulati
Got it sir. Thank you and wish you best of luck.
Operator
Thank you. Next question is from the line of Ganesh Shetty, an individual investor. Please go ahead
Ganesh Shetty
Sir. Congratulations for good setup number in tough micro. I just have one question regarding our business model. Previously we used to get severely impacted by macro dynamic, but over a period of time what I’m observing is we are quite resilient with our business model and our revenue visibility maintaining our margin trajectory. So do you. Do you think that there is a sharp shift in the mind thought process of clients and they are ready to spend on L and D outsourcing in spite of discretionary spending limits?
Can you please explain sir?
Sapnesh Lalla
First of all, thank you for your kind words. Yes, we have been resilient over these past several years across Covid and then more recently the wars and tariffs and other macroeconomic uncertainties that we see. Also over these years we’ve been able to take advantage of technology and innovation to improve the resilience as well as growth in our business. To answer your question on how you see outsourcing going forward, see as I mentioned in our discussions earlier, we have been fortunate to have a strong balance sheet that allows us to invest in new technologies such as AI.
And we’ve been doing that over the last four years. Most L and D departments neither have the wherewithal nor the skills to invest in innovation as we have been able to. And consequently, as they are called upon to deliver against new expectations, they are likely to feel overwhelmed. And I think that creates opportunity for them to work with an expert who has been investing in the latest technologies, who has been able to build a strong point of view, who has been able to show evidence of performance improvement with the application of new technologies.
So I think as we look ahead, these investments will enable us to create distinctive distinctiveness and enable higher levels of outsourcing to us.
Ganesh Shetty
That’s all from me, sir. Thank you very much and all the best.
Operator
Thank you. We’ll take our next question from the line of Dishan chain from Kosur Capital. Go ahead.
Bharat Gulati
Yeah, hello. Thanks for the opportunity. So just one question on the forex accounting. How do we accounting the forex gain or forest forex loss in our financials?
Vijay Thadani
Hi, this is Sanjay. So we basically have a, you know, policy where there are hedges which are taken and these are basically taken for, you know, transfer pricing which we have in India from the overseas entities. The overall whatever are the matured hedges. They are accounted for on a quarterly basis. Whatever are near term, not yet distinct will go through the currency translation result. So that is one thing. The second is, second is the balances which are coming through. Those balances if they are outstanding, if there is a change in that, that gets reflected again in the quarterly results as at the end of the period change which is the true above the currency rates.
Bharat Gulati
Okay. In spite of the fact that the currency USD has been rising. But we have been showing forex losses for the last like few months. So any specific reason?
Vijay Thadani
Yeah, so essentially they are rising. But what happens is that there is a hedges are taken standalone, they are not taking overseas. The overall impact which is there on the unhedged is higher than the hedges effect. So there is a part of it is hedge, part of it is not hedge. Based on the hedge ratio, the overall impact in the near term or rather the longer term hedges which are 12 months is higher then the quarterly change. So if you look at the depreciation which would have happened over a year where the hedges would have been taken is anywhere between 5 to 19% in the quarter.
It is about 2% or so. So the gain which you would have got in the 2% change is limited. But on the hedges it would have been higher loss or MTM change. So the net effect is negative. If I take a, just to give an example, if I take a hedge when it was say 88 and I got a premium of 2 rupees, I got 90 rupees that 95. If today it is 95 or 96, that 6 rupees actually will be a loss on the hedge, right?
Bharat Gulati
Correct. Last quarter
Vijay Thadani
I would have already.
Bharat Gulati
Yeah, sure,
Vijay Thadani
Go ahead.
Bharat Gulati
So basically when, when this contract will get ended you will see a reversal of this process, right?
Vijay Thadani
No, we will, we will fructify the whole thing when the contract ends. Basically we fructify because we received the cash against.
Pranaya Jain
Exactly. So basically you will see the receipt, the difference of cash to you, right?
Vijay Thadani
No, that will not come to me. If I have sold it for 90 and today it is 95, the 5 would be lost. But if I have done it for which is going to mature nine months later, that will carry that, that I can recover.
Bharat Gulati
Okay. And so the last one would be on like do we keep the currency benefit with us or should we pass on to the customers?
Vijay Thadani
I’m sorry, I couldn’t get your question.
Bharat Gulati
Do we see the currency benefit with us or should we pass on to the customers?
Vijay Thadani
It varies from various customers. Where there could be fixed price, there can be a little bit of a, you know, range in which plus, minus. If it is there, then it is passed on. But normally we do not have this change which is there in the contracts to be passed on to the customers.
Bharat Gulati
So basically we keep it.
Vijay Thadani
Yeah.
Bharat Gulati
Okay, sir, thank you.
Operator
Thank you. Next question is from.
Sanjay Mal
May I just comment Sunday. But currency loss recorded is in many ways notional. Also
Vijay Thadani
It’s
Sanjay Mal
A mark to market issue
Vijay Thadani
Market on certain portions and realized.
Sanjay Mal
This is technical accounting. I don’t know whether you should surmise from there. I’ll tell you the policy. I’m saying it from board capital allocation and foreign currency management. What is our thinking? Our thinking is we think we understand our business the best. And when we quote to our customer, we know what realization we want from that customer. We would like to protect that. Now if after that there is volatility, if the volatility is going to hurt us, then we at least want our profit protected.
Because I think we understand our business well. I don’t think we are experts on forex and neither do we claim to be so and neither. I’m not sure whether there are other companies who are in this business would also have such capability. So general principle followed is protect your cost on the basis of the Forex that you see in front of you. And on that basis, if you make better, very good. If you don’t make better, at least you are protected. That’s the approach which we take now. All of that, there will be technical corrections from time to time.
Last thing I want to say is our customers get served across the globe. Our customers get served across the globe from across the globe. So it is very difficult for anybody to go and protect forex and least of all in a learning and training contract or services contract. I’ll just pause here. If it adds any more value.
Operator
We’ll take the next question from the line of Lakshmi Narayanan from Tunga Investments. Please go ahead.
Bharat Gulati
Yeah, thank you. I just want to understand what is. Sorry to interrupt. Can
Operator
You use your handset mode please? Your audio is not clear. I’m sorry, you’re sounding muffled.
Bharat Gulati
Is it better now?
Operator
Yes, little better. Please go ahead.
Bharat Gulati
Yeah, I just want to understand what is the ESOP valuation one can factor in because as when I look at the BSE table, it shows almost 1.02 crores of shares as in the ESA pool. So just want to understand that.
Sapnesh Lalla
Your question again, we couldn’t quite understand. So what’s the dilution?
Unidentified Participant
That’s about 7%. It will happen over a period of time. Sorry, the vesting schedule for the granted options. Typically we have a three year vesting schedule and four years, after which five years
Sapnesh Lalla
They have
Unidentified Participant
An exercise period for those tranche. So on an average for each tranche it could vary between four to eight years in total. So an average of maybe you could take six years. I mean, if they were to get all of them were to get exercised, then it probably be about a percentage future.
Bharat Gulati
Got it. Okay. Okay. And next question is that what percentage of our revenues are in the cost side and what percentage is the revenue side? And when you talk about AI related disturbance or opportunity, which side it is, it is on the cost side or on the revenue side of the clients you’re working with?
Sapnesh Lalla
You say cost side or revenue side of the client. What does that mean?
Bharat Gulati
Let me be clear. For certain clients I understand that we work on the revenue side where the service which we offer is counted as a revenue for the client. In certain cases you do the pure LND skims, which could be on the cost side. Right. So as a percentage of a revenue, what is the cost? What comes from the revenue side? Enhancement. And what comes from the cost side for us? And where do you see AI being, you know, AI playing a role here?
Sapnesh Lalla
So I won’t, off the top of my head, I won’t be able to tell you how much of our revenue assists our clients on to gain revenue versus on the cost side though I would say majority of our revenue would be on the cost side as far as our clients are concerned. And what was your follow up question on that?
Bharat Gulati
In terms of AI, you said AI can be an opportunity. At the same time you said that AI is also making people delay their projects. Or I just want to understand which side deals, whether the revenue side or the cost side. Where you see AI being having an impact,
Sapnesh Lalla
AI is affecting LND positively. So whether we are on the revenue side of the client or on the cost side, it really doesn’t matter. AI is making lnd more impactful. So as far as our clients are concerned, they are not seeing or they are not differentiating between AI or revenue generating projects versus cost projects. As far as they are concerned, they’re using or they’re wanting to use our solutions that have, that are AI enabled to improve the effectiveness of learning and development.
Bharat Gulati
And then
Sapnesh Lalla
Second thing I would say is the uncertainty that I mentioned is not induced by AI. The uncertainty is more macroeconomic and nature.
Bharat Gulati
Got it. Okay, okay. And. And what percentage of revenues come from managed training? And what percentage of revenue comes from mandatory training?
Sapnesh Lalla
Say that again, man.
Bharat Gulati
How much and how much? Yeah, so I’m asking, I request him to use
Operator
The handset mode, please. Your audio is not clear.
Bharat Gulati
Yeah, I’m using the handset on me. I just want to understand what percentage of revenue comes from managed training, where we actually manage the entire life cycle of training. And second, what percentage of revenue comes from mandatory training? And yeah, mandatory.
Sapnesh Lalla
So, okay, I would say about 40 to 50% of the training that we do for clients who are, who operate in the regulatory businesses is mandatory training. And I would say with the exception of clients in technology and telecom, the rest of the sectors we serve tend to be regulated sectors. So I would guess that of the total revenue about 30% or 35% would be mandatory training.
Bharat Gulati
Okay, and where do you, and what percentage of revenue coming from managed training where you actually manage the entire cycle of training end to end?
Sapnesh Lalla
All of our business is training outsourcing. So I’m not able to discern what you’re looking for.
Bharat Gulati
Looking at something like you deliver a point solution, let’s say new employee joins, so you actually provide the course content versus where you actually run the program, you actually evaluate and you actually
Sapnesh Lalla
Point solutions as a percentage of our revenue is negligible.
Bharat Gulati
Okay,
Yohan Khinvasara
Okay, okay, okay.
Bharat Gulati
And when you talk to your top 20 clients, you mentioned that they are actually tightening their purses. So can you just double click and just help me understand what, what do you actually hear from your top 20 clients? I mean, why are they pulling back their spends? Any specific use case would be helpful to understand what’s actually going on, particularly among your top 20 clients.
Sapnesh Lalla
Like I pointed out at the top of the call, they see uncertainty in the market and so it’s hard for them to get budgets for discretionary spend. And that’s what’s causing them to. I mean, they’re just going through higher levels of scrutiny for discretionary spend, given the market uncertainty.
Bharat Gulati
Got it. And there’s another thing which I understand is that some training goes under the chro, which is a chief HR officer, and the moment of training is directly handled by the CFO’s office. Right. So. And in, in our case, you know, just as a thumb rule or a. Just overall, what percentage of our revenues would actually come under the CHRO and what would be under the CFO? CFO’s discussion.
Sapnesh Lalla
I don’t think we do much, if anything under the CFO. I would say close to 100% of our revenue, which is internal in nature, would be with the chro.
Operator
Thank you. Thank
Yohan Khinvasara
You. Thank you.
Operator
Ladies and gentlemen, we request you to restrict to one question at a time, please. Next question is from the line of Vinay Nadkarni from Hathaway Investments. Please go ahead.
Bharat Gulati
Yeah, thank you for the opportunity. I just have a few questions. One is when you look at your, you are saying you’re added 21 new annuity clients during the year. You have expanded scope with four clients. You have acquired MST and SweetRates this year. And AI is driving 15% of your revenue. Almost 13% of your revenue and rupee is depreciating. You forget this year, but generally 2 to 3% depreciation in rupee. With all this, your growth of 9% or rather, even if I take the highest of highest single digit, how does it match?
I mean, I can’t understand yet. Even new clients would deliver more business this year, it being annuity or are you losing out some more business which is compensated by this?
Sanjay Mal
I couldn’t actually quite understand. No. So let me explain. What he’s saying is AI contributed 12% of your revenue,
Sapnesh Lalla
13%.
Sanjay Mal
You have added 21 clients. You are doing everything right. Then why do you have only a single digit growth? Is that in. Did I say it in simple words?
Bharat Gulati
Yes, absolutely. And you add the 2% depreciation in Indian rupee. Also
Sapnesh Lalla
In constant currency terms. Just so that we are measuring, we are taking out the depreciation of rupee out of the picture in constant currency terms. Business grew about 11% on a year. On year basis, all clients that we acquired did not start in April of 2025. They have been acquired over the period of one year. So it would not be right to assume that each one ramped up to their maximum potential the day they started. Over a period of a year or so, they typically ramp up. So in a typical year, most of our growth would come from growth in existing clients.
Because new clients take time to Grow. In this specific year we’ve seen growth because MST and sweetrush became part of NIIT and we’ve seen existing client growth. So you were to look at organic growth. We did about 7% growth for the year organically in constant currency and a large percentage of that growth. So our existing clients did 4%. We had 4% growth. So out of the 7%, 4% growth came from existing clients, 3% came from new clients and approximately 3 or 4% came from inorganic activity which included Sweet Rush and MST.
Last year you had recall which helped that impact
Sanjay Mal
Is the one which is actually making you wonder.
Sapnesh Lalla
Also, several million dollars of revenue from Ricoh did not come in this year. So if you were to net out the real estate contract, then the growth in constant currency terms for organic business would be about 14%.
Bharat Gulati
I’m looking at the F27 guidance that you have given, so
Gaurav Nigam
Maybe request that you return to the question. No, no,
Bharat Gulati
No, no, no, no. I’m just following up on the same question because my question was for F27 guidance of 9% or rather the higher single digit. With all these new clients, expanded scope. With four clients and acquisitions which you have made last year, wouldn’t your sales be higher in the F27 than just 9%? That’s what my question was.
Sapnesh Lalla
It would be higher if there was no impact of macroeconomics on our clients. Yeah, you’re right. If the same client keeps spending the same amount of money in the coming year. You’re absolutely right. We would be seeing significant growth because the 21 clients that we acquired this year would produce more revenues. That did not. Rocket science. That is straightforward.
Bharat Gulati
So there would be wallet share losses.
Sapnesh Lalla
No, not wallet share loss. Actually it will be wallet share gain. But the total pie would go down. Like I pointed out earlier, an organization would cut down on their discretionary spend. So if they were spending hundred dollars, they might spend only 80. Now out of that 80, our wallet share may actually increase rather than reduce.
Bharat Gulati
But sorry, say
Sapnesh Lalla
That again.
Bharat Gulati
I’m saying with U. S economy supposed to be doing better and your clients are more days in U.S.
Sapnesh Lalla
No, I mean if you want the joke on this call, we can engage in joking and talking about macroeconomics. But I think you are as aware of macroeconomics as I am. Maybe more.
Bharat Gulati
Fine. Okay. Thank you. Thank you very much.
Unidentified Participant
How are we doing? We
Sanjay Mal
Are over four more questions. We can take one from each.
Gaurav Nigam
Thank you. Let’s
Sanjay Mal
Take one quick question from each. I just wanted to say we will be in Mumbai like customary at the end of quarter on Friday and those of you coming Friday and those of you who would have some follow up things, please be in touch with Kapil. And Kapil will be very happy to organize a meeting call or whatever, whatever is required. And at this point of time, since you’ve taken the trouble to be with us, we’ll take one question each if that’s okay with everyone. Thank you.
Gaurav Nigam
Thank you. The next question is from the line of Bharat Gulati from Dalalan brochure. Please go ahead.
Bharat Gulati
Thank you for the follow up. Just a very quick question sir. You had earlier reiterated in the start of the call to analyst question that you know, you’re seeing the net retention rate being strong with customers. Would there be a quantifiable number you can put to that that you know, what has been our historical NRR and what do we see it going into FY27 and you know, just some kind of. I think with the questions that you’ve gotten today, I think we’re just trying to understand, you know, what is the customer outlook for FY27 and how do we, you know, see existing customers grow.
Because high single digit guidance is somewhat proven to be a flattish to even a degrowth scenario in our organic business. So just trying to get a sense of that.
Sapnesh Lalla
So like I pointed out, if I had the crystal ball I would give you all the details available but unfortunately I don’t have one. Your guess on macroeconomics is quite like my guess. And at this time we believe that we should, on a conservative basis we should be able to do high single digit growth growth for the year.
Bharat Gulati
And so just in terms of nrr, is there some number you can, you know, some directional.
Sapnesh Lalla
We can ask the same question five different ways. But like I said that we think that on a conservative basis we should be able to achieve high single digit growth.
Bharat Gulati
Fair enough. I think what we
Sanjay Mal
Are talking about just, I’ll just add to what SAPNES said. While we have mentioned high single digit growth for the year, I am not sure whether you can predict that for any business anywhere in the world at this time. The question is we are putting our best foot forward based on our understanding and some assumptions that we are making. I think it will get titrated as we go forward. That’s one thing which we can say. So I think every quarter we would be able to talk to you, you have better color on how the rest of the year is likely to look.
Bharat Gulati
Got it. And so just had asked another question, Mr.
Gaurav Nigam
Goladi, maybe I’ll get back in the queue.
Bharat Gulati
Thank you.
Gaurav Nigam
Thank you. The next question is from the line of Gaurav Nagam Pamphunga Investments. Please go ahead.
Bharat Gulati
Yeah. So just one question on this difference between the Q4 performance one we envisaged versus what we delivered. Can you, I mean you mentioned that this was driven by and just want to understand was it a single client and very specific case or was it broad based discoloration? And can you provide some color on where exactly this dissemination happened? Were it part of the managed services part of the business or their discretionary part of the business? And did we lose share to somebody or was there a case of insourcing?
If you can provide the color on this budget which is actual for Q4 or for our organic business, that would be great.
Sapnesh Lalla
It was a couple of clients and significant clients and it wasn’t loss of share to anyone else. They just decided, like I pointed out, to pull back the budget which means they did not spend the planned amount of money what we expected them to spend at the beginning of the quarter. And we think that in Q1 they’ll bounce back.
Gaurav Nigam
Thank you. The next question is from the line of Pranaya Jain from Banyan Tree Advisors Private Limited. Please go ahead.
Pranaya Jain
Yeah. Hi. Thank you for the opportunity. So I’ll just, you know, continue with the previous participants question. When we look at say your technology and telecom segment, your industrial segment, your management consulting and professional segment, all three have degrown on a QOQ basis. So just wanted to understand, you know, and get more color on. Are you facing deflationary pressure from other clients as well apart from the two big clients that you spoke about? Yeah. And just one small question.
Can you provide a QoQ organic revenue growth?
Sapnesh Lalla
So let me try to answer your first question first. The fact that one segment goes down also because another segment went up, the sum of all is 100. So one of the segments went up significantly which resulted into a number of other segments shrinking because the sum of the total is 100. I would say one offer, like I pointed out one of our couple of our clients at material but transient pullbacks in their budget which should be restored in Q1.
Pranaya Jain
So I am looking at an absolute basis like when we just use those packages and multiply it with our overall revenue and then when we compare the absolute numbers, we still see degrowth in these three segments that I talked about and hence the question.
Sapnesh Lalla
I get that. But that’s why I said a couple of our clients had material pullbacks. Because of our budgets. What I did want to point out however, was that we did have significant growth in other segments as well. And the nature of the budget pullback is temporary.
Bharat Gulati
Sure. And can you just provide.
Unidentified Participant
So your question was on QOQ growth, Water, organic, which is in reported terms -1%
Bharat Gulati
QoQ
Unidentified Participant
Organic and then constant currency. It was
Bharat Gulati
Constant currency, -4%. -4% organic.
Unidentified Participant
Yeah.
Pranaya Jain
Okay,
Bharat Gulati
Thank you.
Gaurav Nigam
Thank you, ladies and gentlemen. We’ll be taking the last question that is on the line of Shraddha Agrawal from Asian Market Securities. Please go ahead.
Yohan Khinvasara
Yeah, hi. Just one clarification on the guidance for next quarter. So you’re indicating double digit YOY growth, but what is the implied sequential growth given the fact that you’re talking of bounce back in spending in the top lines in which you saw pressure in this quarter,
Sapnesh Lalla
Like I pointed out, we are likely to do high single digit YOY growth for the year and in Q1 we have an opportunity to do double digit growth.
Sanjay Mal
What she’s saying is what does it imply as QoQ? Just work that out. Shraddha, you know us well. I think you should keep a track of us given the seasonality and now the multiple businesses that have got added to keep a track of us on a year on year basis will be the best way to keep.
Yohan Khinvasara
So the reason it’s a simple mathematical.
Sanjay Mal
It’s a mathematical number. We’ll, we’ll just give it to you. No single digit. No single digit.
Yohan Khinvasara
Okay, thank you.
Gaurav Nigam
Thank you ladies and gentlemen. That was the last question. I now hand the conference over to the management for the closing comments.
Sanjay Mal
Well, I think we’ve had a pretty involved discussion. So first of all, I want to thank each one of you for having joined the call. I know it’s very precious time of yours and in this very volatile, very interesting and very energizing time at the same time stepping because of the multiple stresses at work. So thank you for giving us the time and bigger thanks for asking us the very important questions, many of which tell us to keep track of a few numbers that we normally in our normal course of business didn’t.
I don’t know whether any one of you noticed that there are some new matrices that we have started sharing, net revenue retention being one of them. And I think going forward you will see that as a common thread and this all we learn from the questions that you asked and we’ll be in touch with you on any other clarifications that you would need as well. As I mentioned before, on Friday we will be in Mumbai to start with and of course, even after that for coming months. And feel free to set up a meeting or a call or any detail that you would like to have from us.
Thank you once again for joining us. Truly appreciate your time.
Gaurav Nigam
Thank you. Thank you. Ladies and gentlemen, on behalf of NIT Learning Systems Limited, that concludes this conference call. We thank you for joining us. And you may now disconnect your lines. Thank you.