NIIT Limited: Educating India

“Our B2C programs are ramping up and helping the learners achieve very strong career outcomes, learners who joined us, have been getting offers that are almost twice the starting salaries of campus hires. So they’re seeing significant outcomes and significant improvements in the salary with the kind of education and training outcomes that we are providing. Overall, for the SNC business, we expect the growth percentage for the year to be in the range of low to mid-40s with a single-digit EBITDA margin.”

– Mr. Sapnesh Lalla, CEO in Q3FY23 Concall

Stock Data
Ticker	NIITLTD
Exchange	NSE
Industry	TRAINING SOLUTIONS

Price Performance
Last 5 Days	-0.13%
YTD	+13.59%
Last 12 Months	-44.00%

*As of 17.04.2023

Company Description:

NIIT Limited is an Indian multinational company headquartered in Gurugram, Haryana, India. The company provides learning management and training services to individuals, institutions, and enterprises. NIIT Limited was established in 1981 and has a presence in over 30 countries worldwide.

NIIT Limited’s business operations are organized into two segments: Skills & Careers and Corporate Learning Group (CLG). The Skills & Careers segment provides training and certification programs to individuals and institutions in areas such as information technology, banking, finance, insurance, and management. The CLG segment provides customized training and learning solutions to enterprises and government organizations.

Key Strengths:

• Strong brand recognition: NIIT Limited has a strong brand recognition and reputation in the industry. The company has been operating for over 40 years and has trained over 35 million people worldwide, which has helped establish its brand and reputation. This is evident in the company’s growing and consistent revenues.

• Comprehensive offerings: NIIT Limited offers a comprehensive range of training and learning solutions for individuals, institutions, and enterprises. Its offerings include courses in areas such as information technology, banking, finance, insurance, and management, as well as customized training solutions for enterprises and government organizations.

• Global presence: NIIT Limited has a presence in over 30 countries worldwide, which provides the company with access to a global market and diverse customer base.

• Strong partnerships: NIIT Limited has partnerships with several leading technology and education companies, which enables it to offer high-quality training and learning solutions to its customers.

• Experienced management team: NIIT Limited has an experienced management team that has been with the company for many years. The team has a strong understanding of the industry and the company’s operations, which enables it to make informed decisions and drive growth.

• Focus on innovation: NIIT Limited has a strong focus on innovation and is constantly developing new products and services to meet the changing needs of its customers. The company has also invested in emerging technologies such as artificial intelligence, machine learning, and data analytics, which positions it for future growth.

Financial Results:

Mainly on account of acquisitions that NIIT Ltd. made in the United States, in Q3 ended December 31, 2022, the company reported almost flat consolidated net profit at INR 55 crore. In the same year-ago period, the company had reported a net profit of INR 54.9 crore.

According to the management, the economy will remain unstable for the upcoming quarters, but the company will use its CLG division and commercial expansion into new regions to lessen the impact.

Key Opportunities:

• Growing demand for digital skills: With the increasing digitalization of businesses and the economy, there is a growing demand for digital skills. NIIT Limited is well-positioned to capitalize on this trend by offering courses and training programs in areas such as data analytics, artificial intelligence, machine learning, and cybersecurity.

• Increasing adoption of e-learning: The COVID-19 pandemic has accelerated the adoption of e-learning and online education. NIIT Limited can leverage this trend by expanding its online course offerings and investing in digital learning platforms.

• Emerging markets: NIIT Limited can tap into the growing demand for education and training in emerging markets such as Africa, Asia, and Latin America. These regions have large populations and rapidly growing economies, providing a significant opportunity for NIIT Limited to expand its operations and customer base.

• Strategic partnerships: NIIT Limited can continue to form strategic partnerships with leading technology and education companies to enhance its offerings and expand its market reach.

• Upskilling and reskilling: With the rapid pace of technological change, there is a growing need for individuals and businesses to upskill and reskill. NIIT Limited can capitalize on this trend by offering upskilling and reskilling programs in emerging technologies and in-demand skills.

• Government initiatives: Many governments are investing in education and training programs to develop their workforce and improve their economies. NIIT Limited can partner with governments to provide customized training solutions and tap into these initiatives.

Key Risks:

“Near-term uncertainty has had a short-term impact on consumption of training, as I shared the last time we met. However, the CLG business has seen a recovery in growth and margins. As expected, this quarter, SNC business has experienced muted growth given the environmental headwinds.”

– Mr. Sapnesh Lalla, CEO in Q3FY23 Concall

• Increasing competition: The learning management and training services industry is highly competitive, with many players offering similar services. NIIT Limited faces competition from both established players and new entrants, which could impact its market share and profitability.

• Cost pressures: NIIT Limited may face cost pressures, this could impact the company’s profitability and margins.

• Economic uncertainty: Economic uncertainty and fluctuations in the global economy could impact NIIT Limited’s operations and profitability. The company needs to be prepared to manage economic risks and adapt its operations accordingly.