The company is expected to have earned 322.5 million rupees (US$7.4 million) in the three months ended March 31, according to an average of estimates from three analysts polled by Bloomberg. A year earlier, NIIT earned 199 million rupees, a 59 percent gain over the previous year.
"Software services are likely to grow faster compared to education," said analyst Sanjay Kumar "That's good for margins."
NIIT gets about half its revenue from software services, including software distribution and sales. The number has steadily risen in past few years as the company focuses on helping clients set up e-commerce businesses.
Granted, this quarter has traditionally been a lean one for the company's education business because of a drop in enrolments for expensive two-to-three year courses.
Competition and changing trends in the education business have driven the company to pursue opportunities in the software arena.
Software services
"NIIT lost its edge in the education business as smaller players mushroomed, cashing in on the customer preference for short-term courses," said C Govindarajan, an analyst.
Still, NIIT is betting that its online courses--through the netvarsity.com web site--will help grow the education business and reduce its dependence on the logistically demanding franchise model.
"E-learning is a huge opportunity," said Rajendra S Pawar, chairman and managing director of NIIT. "The good thing about the online market is that it's global."
Coupled with higher sales from its US operations, where it set up a subsidiary in 1992, the company should see strong earnings growth in the quarters to follow.
The company's profit rose a higher-than-expected 116 percent in the first quarter ended December 31, 1999. This indicates that the company's strategy as an Internet solutions provider is paying off, said analysts.
Play video
There are currently no comments for this post.