NIIT — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

NIIT reported Q3 FY26 revenue of ₹1,014 million, up 3% YoY, but performance fell short of expectations due to a significant slowdown in fresh hire training, especially in BFSI. While Enterprise tech and Consumer Tech segments showed strong growth, overall profitability was impacted by one-time expenses related to wage code implementation and merger activities, resulting in a PAT of ₹39 million. The company is focusing on AI-enabled offerings, market diversification, and cost control, with a Q4 margin guidance of breakeven to low single-digit.

Highlights

  • Revenue of ₹1,014 million, up 3% year-on-year, marking the second consecutive quarter above ₹1,000 million.

  • Overall Enterprise revenues grew 8% year-on-year, led by Enterprise tech which grew 18% year-on-year, reflecting an underlying improvement.

  • Consumer Tech segment grew 22% year-on-year, indicating continued demand for tech skilling from job seekers and working professionals.

  • Technology programs revenue reached ₹766 million, up 20% year-on-year, with iamneo contributing ₹128 million and scaling well.

  • Despite the revenue miss, the company delivered positive margins in Q3, enabled by tight cost control and continued investment in GTM capacity and new AI offerings.

Concerns

  • Q3 performance did not meet expectations, primarily due to a sharper than anticipated slowdown in fresh hire training, particularly in BFSI.

  • Excluding iamneo, revenue was down 10% year-on-year, largely due to compression in new hire training.

  • BFSI and other segments' revenue was ₹248 million, down 27% year-on-year, led by reduced volumes for TPaaS business.

  • A one-time impact of new wage code implementation of ₹46 million and an expense of ₹8 million related to the scheme of arrangement for merger of RPS and IFBI into NIIT affected profitability.

  • PAT stood at ₹39 million and EPS at ₹0.29 per share for the quarter, indicating a challenging financial outcome.

  • Guidance for Q4 is breakeven to low single-digit margin, reflecting continued investments and a fluid environment.

Key financials

3 periods

Headline

  • Revenue
    1,014 Mn
    YoY +3%
  • PAT
    39 Mn
  • EPS
    ₹0.29
  • Depreciation
    76 Mn
  • Net Other Income
    132 Mn
  • Exception Expense
    54 Mn
  • Cash & Cash Equivalents
    7,122 Mn
  • Headcount
    939
    QoQ 0%

Q3

  • Order Intake
    822 Mn

9M

  • Order Intake
    3,340 Mn
    YoY +16%
  • Revenue
    2,904 Mn
    YoY +7%

What they filed

Q1 FY27: revenue up 13.7%, net profit up 79.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue91 98 86 84 105 +16%101 +3%100 +16%96 +14%
EBITDA-1 7 -1 -10 -1 −12%-1 −113%-1 +2%-4 +63%
Net profit12 14 14 4 1 −95%5 −67%-3 −125%8 +79%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Enterprise Business
    0.08 yoy_pct Revenue Growth
  • Enterprise Tech
    0.18 yoy_pct Revenue Growth
  • Enterprise Tech (excl. iamneo)
    0.09 yoy_pct Revenue Growth
  • Consumer Business
    -0.03 yoy_pct Revenue Decline
  • Consumer Tech
    0.22 yoy_pct Revenue Growth
  • Consumer BFSI and Others
    -0.36 yoy_pct Revenue Decline
  • Technology Programs
    766 Mn Revenue0.2 yoy_pct Revenue Growth
  • BFSI and Others
    248 Mn Revenue-0.27 yoy_pct Revenue Decline
  • iamneo Contribution
    128 Mn Revenue

Capital allocation

high confidence
  • Capex ₹87 Mn
    CAPEX was 87 million in Q3. This is consistent with our investment cycle.
  • M&A iamneo Acquisition · Integrated

    iamneo brings an AI-first, deep-skilling SaaS platform, which includes coding labs, assessments, placement automation and talent acquisition. This opens up the higher end channel for us.

    iamneo contributed Rs.128 million to revenue in the quarter and is scaling well.

    iamneo contributed Rs.128 million to revenue in the quarter and is scaling well.
  • M&A RPS Consulting and IFBI Merger · Pending regulatory

    to simplify our structure and reduce complexity, thereby improving our agility.

    there is an expense of 8 million, which is related to scheme of arrangement for merger of RPS and IFBI into NIIT.

    We have announced a merger of two wholly owned subsidiaries, RPS Consulting and IFBI, with NIIT Limited, to simplify our structure and reduce complexity, thereby improving our agility. This process is on track.
  • Liquidity Cash ₹7,122 Mn Cash and cash equivalent stands at 7,122 million against 6,846 million last quarter. This is driven by working capital efficiency and treasury income.
    Cash and cash equivalent stands at 7,122 million against 6,846 million last quarter. This is driven by working capital efficiency and treasury income.

Guidance & targets

Revenue

  • Revenue Growth Revenue · Q4 FY26 · High confidence double-digit growth
    Yes, on the guidance. We are expecting double-digit growth year-on-year in Q4. That is the guidance we wanted to give for Q4.

    — Pankaj Jathar

  • Full Year Revenue Growth (excl. iamneo) Revenue · Full Year · Medium confidence low, high single digit growth

    Previously upwards of 15% → low, high single digit growth

    Yes, Rahul ji, your understanding is correct. And the way we started, ex of iamneo I think the implied guidance was upwards of 15% for the core business, but, where we are ending is probably a negative number.

    — Pankaj Jathar

Profitability

  • Margin Profitability · Q4 · High confidence breakeven to low single-digit margin
    In terms of guidance, we expect to be breakeven to low single-digit margin in Q4, given continued investments.

    — Vijay Thadani

M&A

  • Merger Completion (RPS & IFBI) M&A · next 8-10 weeks · High confidence complete in next eight to 10 weeks
    The second thing which I thought I would like to talk about is the merger of RPS Consulting and IFBI, the two subsidiaries of NIIT, which are being merged into NIIT. And this process is on, and we expect to complete it in the next eight to 10 weeks, and we will of course, keep you updated on that.

    — Vijay Thadani

What to watch in Q4 FY26

Q4 FY26 Revenue Growth

Q4 FY26
Current 3% YoY in Q3 FY26
Target double-digit growth year-on-year

Why it matters

To assess if the company can achieve its stated growth target after a challenging Q3.

Yes, on the guidance. We are expecting double-digit growth year-on-year in Q4. That is the guidance we wanted to give for Q4.

Risks & concerns

  • Slowdown in fresh hire training

    high

    A sharper than anticipated slowdown in fresh hire training, particularly in BFSI, impacted Q3 revenue.

    Management acknowledged

  • BFSI onboarding slowdown and deferrals

    high

    Onboarding plans weakened materially in the second half of the quarter, pushing training start dates out and reducing back volumes for BFSI.

    Management acknowledged

  • Concentration and phasing risk in BFSI

    medium

    BFSI remains cautious in the near term, and the company is actively managing concentration and phasing risk.

    Management actively managing

  • One-time impact of new wage code implementation

    medium

    A one-time impact of ₹46 million from new wage code implementation affected Q3 financials.

    Management acknowledged

  • Expenses related to merger scheme

    low

    An expense of ₹8 million is related to the scheme of arrangement for merger of RPS and IFBI into NIIT.

    Management acknowledged

  • Higher tax rate due to prudent provisions

    low

    The tax rate is coming to nearly 29%, which is not normal, due to prudent provisions related to the wage code.

    Management acknowledged

Q&A highlights

6 direct
Inorganic growth strategy and new sector exploration Direct
So, inorganic activity as you know, our approach has been to look at new segments, new capabilities, new geographies. And in these three areas, we have been looking at niche companies where we will make investments. We have an active funnel. We are in discussions, in some cases, fairly advanced discussions. But obviously, we can talk about these only when a deal materializes, otherwise, it leads to speculation. But yes, we have a fully committed team which is working on this and we will be sharing areas that we are looking at. The areas that we cover, as I said, at a broad level is segment, geography and capability. But, it can be a new sector that we are looking at, for example, ER&D or manufacturing, and we are open to opportunities where we can find companies and teams which can add value to our strategy.

Analyst inquired about the company's M&A strategy and potential expansion into new sectors beyond BFSI and technology, given the fast pace of technological change and hiring freezes.

Asked by Ganesh Shetty

B2B vs B2C business performance and future strategy for B2C Direct
On the B2C segment, this quarter, one of the things that did impact us was the slowdown in fresh hiring. And on the direct-to-consumer technology side of programs, we saw a good uptick happening there. So, that did well for us in spite of the slowing down on the BFSI segment. So, this is an area that we are focused on. As previously Sanjeev mentioned today, we are in the investment cycle we are building programs, we are investing in technology platforms, investing in content, and in creating new programs like the agentic AI system that I just spoke about.

Analyst noted the B2B business doing well despite challenges but B2C being soft, asking for the road ahead for B2C.

Asked by Ganesh Shetty

Cost structure of AI programs and demand for shorter, specialized courses Direct
So, firstly, really glad that you have seen the agentic AI program and you think it is a good one. Thankful to you for appreciating that. And yes, it is part of a larger initiative we have. And we will bring in programs which will be at different price points for different audience. This particular one is a more comprehensive program that we have. It is a 25-week duration program, and the pricing was also done based on what we have seen in the market of similar programs with this level of intensity and engagement. So, we believe that it is priced well enough for the market to accept, and we are seeing some early traction which gives us that feedback. But, your comment is noted. We are working on creating niche programs for different audiences within the working professional segment. And these will be both shorter duration, differentially priced. And we are creating a whole menu of these programs.

Analyst questioned if the cost structure of AI programs was too high for mainstream adoption and if shorter, specialized courses were planned for working professionals.

Asked by Aman Prakash

Implied full-year growth and initial optimism despite weak macro Direct
So, beginning of the year, you are right, hiring sentiment has been neutral. But, we did see a few green shoots a couple of times where we saw numbers from some of our customers on at least on the hiring training engagements that we were doing. And that led to a little bit of enthusiasm for us where we thought things were correcting and changing. And there have consistently been external factors which have also come in which have made changes to the real business. This quarter we were struck by some of the push outs and changes in dates and requirements from the banking segment where new hiring training got pushed out. And that is the reason why this quarter suddenly we had to cope with that kind of external factor.

Analyst sought clarification on the implied full-year growth and the reasons for initial optimism at the start of the year, given the weak macro environment and subsequent performance.

Asked by Rahul Jain

Business performance ex-iamneo and need for offering alteration given tech hiring outlook Direct
No, in technology, despite no hiring, we grew 20%. And that I think at last year same time, there was technology training happening, not in fresh hires. So, the fact that we have been able to pivot and that pivot has worked out. Albeit, I must say on the backing of a strong AI wave, because reskilling of the six million workforce is a huge, humongous opportunity. And I think we have to take full advantage of that. So, what gives us confidence for future is number one, that the 6 million workforce, which is already employed, whether they are in ITES or pure IT services. I think those reskilling them is a great opportunity and much of that you are seeing in the numbers that we have shared with you. I have a feeling and we strongly believe that there are similar opportunities sitting in the other sectors also. I think we should see the benefits of those as we go forward. But there are other sectors we are studying. He referred to ER&D and he referred to manufacturing, EV. Some of those areas we are actively seeking training opportunities and I think we will be able to share them with you.

Analyst questioned the lack of significant movement in the core business (ex-iamneo) over two years and whether a meaningful alteration in offerings is needed given the subdued tech hiring outlook.

Asked by Rahul Jain

Impact on other income from falling rates and exceptional expenses Direct
I think you will be able to guide us better than I can, because we have two elements we have debt mutual funds and we have fixed deposits. Fixed deposits are fixed 10 years. So, you will know what it is. Debt mutual funds, unfortunately, we do not control. And those are mark-to-market corrections that we have to make, which appear in our financials. This time, particularly, we have two elements which are contributing more than that one is the wage code. Wage code has a provision that we have to make statutorily. And that is, I think you shared already, Sanjeev, 46 million. And the second is we have this scheme going on right now, which hopefully will reduce our overall cost structure, improve the agility and help us work better. And that is to merge IFBI and RPS into NIIT. That scheme is towards the end. I think another eight to 10 weeks we should see that scheme getting over. So, there were costs associated with that which have a provision. Our tax has a higher provision this time because of wage code, on a prudent basis, we have not taken any benefits, so, our tax rate is coming to nearly 29%, which is not normal.

Analyst inquired about the sustainability of other income given falling interest rates and the impact of exceptional expenses (wage code, merger) on the financial indicators.

Asked by Rahul Jain

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Detailed narrative

Q3 FY26 Performance Overview and Challenges

NIIT's Q3 FY26 performance did not meet internal expectations, with revenue reaching ₹1,014 million, a 3% year-on-year increase. The primary driver for this shortfall was a sharper than anticipated slowdown in fresh hire training, particularly in the BFSI sector, where onboarding plans were weakened and training start dates were pushed out. Excluding the contribution from iamneo, revenue was down 10% year-on-year, indicating underlying pressures in the core business.

Segmental Performance and Product Mix Shift

Despite the overall challenges, Enterprise revenues grew 8% year-on-year, with Enterprise tech leading the way at an 18% year-on-year growth. Excluding iamneo, Enterprise tech still grew 9% year-on-year, demonstrating resilience. Consumer Tech also showed strong growth, up 22% year-on-year, reflecting demand for tech skilling. The product mix shifted significantly, with Technology programs revenue at ₹766 million (up 20% YoY), while BFSI and others revenue declined 27% year-on-year to ₹248 million, changing the Tech-BFSI ratio to 76:24 from 65:35 last year.

Strategic Initiatives & AI Focus

The company is actively investing in building blocks for future growth, including expanding its go-to-market (GTM) capacity and new AI offerings. This quarter saw the launch of an agentic AI systems program and continued integration of iamneo, which contributed ₹128 million to revenue. NIIT is also revamping its learning platform, launching deep skilling in new-age technologies, and integrating AI to enhance learner outcomes, focusing on advanced programs for working professionals to provide structural stability against volatile hiring cycles.

Financial Metrics and Capital Allocation

Despite the revenue miss, NIIT maintained positive margins in Q3 through tight cost control. Depreciation was ₹76 million, and net other income stood at ₹132 million, including ₹101 million from treasury income. Exceptional expenses totaled ₹54 million, comprising a ₹46 million one-time impact from new wage code implementation and ₹8 million related to the merger scheme of RPS and IFBI. Capex for the quarter was ₹87 million, consistent with the investment cycle. Cash and cash equivalents increased to ₹7,122 million from ₹6,846 million last quarter, driven by working capital efficiency and treasury income.

BFSI Recovery Plan & Diversification

To address the slowdown in BFSI, NIIT is implementing a recovery plan focused on diversifying beyond the top four private banks to a broader set of financial services, including NBFCs and insurance players. The strategy also involves increasing the share of lateral upskilling programs to reduce dependence on pressure-sensitive onboarding cycles. This transformation is being accelerated to build resilience against market volatility.

Outlook and Merger Update

For Q4 FY26, NIIT expects double-digit year-on-year revenue growth but anticipates margins to be breakeven to low single-digit due to continued investments. The company remains committed to its strategic objectives, acknowledging that timelines are difficult to predict given the fluid environment. The merger of wholly-owned subsidiaries RPS Consulting and IFBI into NIIT Limited is on track and expected to be completed within the next 8-10 weeks, aiming to simplify structure and improve agility.

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