NIIT: Taking The Right Steps

NIIT is well-known as the leading skills and talent development corporation that has been building a manpower pool for global industry requirements.

It was way back in 1981 that NIIT was set up to help the nascent IT industry in India to overcome its human resource challenges. Today, it ranks among the world’s leading training companies owing to its vast, yet comprehensive array of talent development programmes in areas such as banking, finance and insurance, business process, retail sales enablement, management education, multi-sectoral vocational skills, digital media marketing, and new-age technology.

With a footprint across 40 nations, over 200 engineers working on education technology and a blended model that uses a mixture of teaching and learning process, NIIT is the largest Ed-tech company in the country today.

Innovation has been the key reason behind NIIT’s success. Since its inception, the company has continued to undertake myriad innovative activities such as launching executive management programmes like Imperia and NIIT Uniqua. For every one, there was a small market at the time of launch; today these markets are huge. “The decisions were taken with the right evolving possible market and design. I think only the momentum with which we drove them to match the market needs is what did the trick,” says Rahul Patwardhan, CEO, NIIT.

NIIT has been one of the top-performing IT stocks, up 75 per cent from a March low after the company turned away from government projects claiming they don’t always pay on time.

“NIIT has shown good performance in the past couple of trading sessions, closing above that important resistance of Rs 95 to 97 and trading at almost Rs 100 right now with good volumes. So one will go with a Buy on that with a stop loss of Rs 97 for targets of Rs 110,” says Abhisek Kumar, analyst at JM Financial Research.

Strengthening its operations in key international markets, including Europe and North America, NIIT recently established a new facility in Bergen, Norway to expand multi-lingual delivery capability and will further invest in the rapid growth of its business in Europe.

Transformation Plan
NIIT initiated its business transformation plan in October 2014 to usher the company into the next phase of growth. The first phase of the transformation was the re-structuring that initiated succession plans under which Patwardhan joined as the CEO of the company.

Besides this, the organisation appointed Shivan Bhargava as the group president of the Skills and Career Group. Vijay Thadani currently is the vice-chairman and managing director and P. Rajendran is the executive director of the company.

NIIT witnessed two key management appointments linked directly to its business transformation. Recently, it announced the appointment of Gavin Dabreo as the CEO of NIIT’s K-12 school learning subsidiary, MindChampion Learning Systems (MLSL), now a separate entity. This was done to invite strategic investors and partners, as a separate entity would effectively cater to the independent growth and future expansion plans of the school learning business.

“Global Corporate Training Outsourcing is growing steadily; the multi-sector Indian market for quality career skills training has huge potential; while technology and policy shifts are creating space for disruptive new training business models,” says Patwardhan.

Path to Profitability
The Business Transformation (BT) programme has contributed positively to the second quarter numbers. It enabled NIIT to get back to profitability and growth this year. This was reflected in a turnaround performance of the company in the first quarter of FY16 with net revenue at Rs 233.3 crore. In the second quarter, it posted a net revenue of Rs 272.5 crore.

Manage Training Services, (MTS) which is a part of the Corporate Learning Group (CLG), has grown five-fold over the past four years (from Rs 85 crore in FY11 to Rs 425 crore FY15). Revenue visibility for CLG is $191 million with multi-year, multi-million dollar contracts.

The Skills and Careers (SNC) business is back in the black this year — already profitable and growing in the first half of 2015. Net debt is less than Rs 100 crore (gross debt less cash). The focus is to get back to profitability, and growth. It is well aligned to achieve the end objective of attaining sustainable and scalable growth for the company.

The education technology space is warming up with pure play technology companies launching education initiatives. “We believe that technology is becoming critical, but the key question is that the pure technology delivery model cannit deliver the results. So you need the combination of technology and people base delivery,” says Patwardhan.

NIIT has reinvented itself as an employer over the years, bringing its HR policies in line with present day expectations. Understanding that it has to appeal to youth, the 34-year-old organisation introduced a series of initiatives like cool contests that encourages peer appreciation. NIIT was ranked as the “fourth best company to work for” in India by Great Place to Work Institute 2013-14.

monica@businessworld.in; @MonicaBehura

(This story was published in BW | Businessworld Issue Dated 11-01-2016)