NIIT Q3 net profit remains flat at Rs 55 crore due to St Charles acquisition

He attributed flat net profit during the quarter to acquisitions that the company made in the US. "During the quarter, we acquired St Charles Consulting Group and we could only get two months of their revenue.”

"The acquisition of St Charles Consulting Group is aligned with NIIT's stated strategy to deploy its growth capital for the purpose of expanding its capability set and accessing new market segments," Thadani said.

The company through its US-based subsidiary acquired 100 percent stake in St Charles on November 4 for about USD 65 million.

The deal comprises fixed consideration of USD 23.43 million subject to certain adjustments as per the agreement and USD 41.66 million based on annual performance over the next four years.

NIIT's Corporate Learning Group (CLG) reported a growth of 22 percent in net revenue to Rs 363.6 crore on YoY basis and renewed contract with all the existing customers and closed the quarter with 71 MTS customers with a revenue visibility of USD 321 million.

Thadani in an interview to CNBC-TV18 said that the company's CLG business margins are seen to be around 20 percent on an organic basis. The St Charles acquisition is expected to aid the CLG business margins by 50-100 basis points. However, there was a weakness in tech hiring in Q4 which impacted the company's skill and careers revenue.

The Skills and careers group (SNC) division of the company grew by 4 percent to Rs 91 crore during the reported quarter.

Despite this setback, Thadani remains optimistic about the future of the company's skills & careers segment. He expects the segment to see a growth of 40-45 percent with maintained margins.

"As industries are going through multiple transformations and disruptions, skilled talent continues to be a top priority for CEOs. We see significant and robust opportunities for growth in both the CLG and SNC businesses," NIIT, CEO and Executive Director, Sapnesh Lalla said.

He said that the economic uncertainty will remain for next few quarters and the company will leverage its CLG division and expansion of business in new geographies to mitigate the impact.