NIIT earned 908.2 million rupees (US$19.6 million) in the three months ended September 31, from 533.2 million rupees in the year-ago period. That's more than the average 752.3 million rupees forecast by seven analysts polled by Bloomberg News. For the full year, the company's profit rose 58 percent to 2.24 billion rupees, from 1.42 billion rupees in the previous year.
We are optimistic about "NIIT's growth initiatives both in the learning business and the IT services business as it expands deeper into the US market," said Anil Tewari, an analyst with Goldman Sachs (Asia) LLC in Hong Kong. Tewari rates the stock a "market performer".
NIIT gets about half its revenue from software services, including software distribution and sales. This has steadily risen in the past few years and is expected to further increase as the company focuses on helping clients carry out business transactions on the Internet.
According to Forrester Research, companies will complete transactions worth US$6.8 trillion online by 2004, from US$657 million in 2000. With its low-cost labor and highly skilled engineers, Indian companies such as NIIT are best positioned to help global companies handle such transactions.
Still, NIIT's growth in both its business segments is slower than rivals Infosys Technologies Ltd, SSI Ltd and Aptech Ltd.
The company's software services grew 68.8 percent in the quarter ended September, compared to a 113 percent rise in revenue at Infosys, India's second-biggest software developer by market value, in the second quarter ended September.
"NIIT's management is seen as slow-moving and not too aggressive," said Ganesh Duvvuri, an analyst with B&K Securities in Mumbai.
The slow expansion rate has dragged down NIIT shares, which have slumped to a 20-month low. The stock was down 4.2 percent to 1210.15 rupees on the Mumbai stock exchange, on Friday.
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