Are NIIT latest results good or bad?

The latest financial results for NIIT Ltd reveal a complex situation characterized by significant revenue growth juxtaposed with a sharp decline in profitability. For the quarter ended September 2025, NIIT reported consolidated net sales of ₹104.95 crores, reflecting a year-on-year growth of 15.70%. This marks the highest quarterly revenue for the company, indicating a positive trend in top-line performance.
However, this revenue growth is overshadowed by a substantial decline in net profit, which fell to ₹1.37 crores, representing an 88.42% decrease compared to the same quarter last year. The company's profit after tax (PAT) margin has also compressed dramatically to 0.68%, down from 14.75% in the previous year, highlighting severe profitability challenges.

The operational metrics further illustrate the difficulties faced by NIIT. The operating margin, excluding other income, was reported at -1.11%, indicating that core business operations are struggling to generate profits. This negative margin reflects ongoing issues with cost management, particularly as employee costs have risen significantly, outpacing revenue growth.

Additionally, the company's reliance on other income has become increasingly pronounced, with this non-operating income accounting for a substantial portion of profits. In Q2 FY26, other income represented 273.39% of profit before tax, raising concerns about the sustainability of the business model.

The financial performance has led to an adjustment in the company's evaluation, reflecting the challenges it faces in converting revenue growth into sustainable profitability. The overall trend suggests that while NIIT is achieving sales growth, it is grappling with fundamental operational issues that need to be addressed to improve its financial health and restore investor confidence.