New Delhi: Mid-sized IT firm NIIT Technologies Tuesday reported a net loss of Rs 17.5 crore for the March 2015 quarter as compared to a net profit of Rs 61.9 crore in the year-ago period on account of a one-time settlement charge of Rs 80 crore.
The company also announced acquisition of 51 percent stake in Hyderabad-based Incessant Technologies for about USD 17 million (about Rs 107.8 crore).
A dispute had arisen between one of the company's subsidiaries and its client in the APAC region.
"The dispute was resolved by concluding a settlement agreement which released the company of its obligations towards execution of the programme," NIIT Technologies Chief Executive Officer Arvind Thakur told reporters here.
The financial impact of this one-off event during the quarter is Rs 80 crore, he added.
Its consolidated revenues rose 3.9 percent to Rs 611.2 crore in the reported quarter as compared to Rs 588.5 crore in the year-ago period.
Betting big on the digital space, NIIT Technologies has acquired 51 percent stake in Hyderabad-based Incessant Technologies for about USD 17 million.
"The focus going ahead will be on the digital space and that is why we are acquiring 51 percent stake in Incessant. It is a strategic move for us to grow in the digital space," he said.
He added that the target company is about USD 17 million in size and NIIT "would be investing the same amount for 51 percent stake".
"NIIT will go on to acquire the company (by) 100 percent over a period of time," Thakur said, adding that Incessant has about 300 employees and 20 significant clients.
Digital business currently contributes about nine percent of NIIT Technologies' revenues.
The company added 435 people during the quarter taking the total headcount to 8,494 at the end of March 2015. The attrition rate stood at 15.75 percent.
For the year ended March 2015, the company's revenues stood at Rs 2,372.5 crore, whereas its net profit was down 50.5 percent at Rs 114.1 crore.
Thakur said NIIT's business in the US grew 3.8 percent, contributing to 44 percent of overall revenues during the quarter.
"Growth in the US was a result of business expansion with new clients acquired in the Insurance space. Our UK subsidiary focused on Insurance also expanded its business.
"Overall revenues in Insurance grew 9.2 percent sequentially," NIIT Technologies Chief Operating Officer Sudhir Chaturvedi said.
Europe, Middle East and Africa (EMEA) region accounted for 35 percent, while share from APAC and India was 21 percent.
"Currency fluctuation is a concern, especially in Europe. However, there is growth in the US because of banking, financial services and insurance (BFSI) sector, particularly insurance... We have fresh orders worth USD 89 million and an order book of USD 295 million over the next 12 months," Thakur said.
