Are NIIT Ltd latest results good or bad?

NIIT Ltd's latest financial results for Q3 FY26 reveal significant operational challenges, particularly in profitability, despite a notable revenue increase. The company reported a net profit of ₹1.37 crore, which reflects a substantial year-on-year decline of 88.42%. This sharp drop raises concerns about the company's ability to manage costs effectively and sustain its business model. On the revenue front, NIIT achieved ₹104.95 crore, marking a 15.70% increase compared to the previous year. However, this growth in sales did not translate into profit, as evidenced by a drastic contraction in the PAT margin from 14.75% to 0.68%. The operating profit, excluding other income, was negative at ₹1.17 crore, indicating that core operations are currently unprofitable. This negative margin highlights critical weaknesses in operational efficiency and cost management. The company's return on equity (ROE) of 3.28% is among the lowest in its peer group, suggesting poor capital efficiency. Furthermore, the dependency on non-operating income, which constituted a significant portion of profit before tax, raises questions about the sustainability of its earnings. In terms of market perception, NIIT's valuation metrics indicate skepticism, with the company trading below its book value. This situation reflects broader concerns about its long-term viability and operational performance. The latest results have led to an adjustment in the company's evaluation, signaling a need for careful consideration by stakeholders. Overall, NIIT Ltd's financial performance in Q3 FY26 underscores a business grappling with fundamental issues, where revenue growth is overshadowed by a severe profitability crisis and operational inefficiencies.