The managed training services provider based in Gurugram has onboarded five new clients, renewed two contracts, and expanded two existing relationships during the quarter, which has improved revenue visibility. He also noted that net revenue retention exceeded 100%, showcasing strong backing from current customers.
The organization is also profiting from the increasing use of artificial intelligence in workplace training. Thadani expressed that the company’s early focus on AI-driven learning and development is starting to yield business successes and better customer interaction.
The stock was trading at ₹289.00 at 1:38 pm on the NSE, marking a decline of over 18% in the past year.
For the January-March quarter (Q4FY26), NIIT Learning Systems recorded revenue of ₹525 crore, with a margin of 16.6% and a net profit of ₹77 crore.
This is a revised transcript of the interview.Q: What are the future projections? If you could provide precise figures—given the current uncertainties—what trends are you observing based on discussions with clients across various sectors? Is growth expected to slow compared to FY26? Will there be any margin pressure?
A: Initially, we need to consider growth in terms of constant currency. Next, we should assess it organically since inorganic activities may contribute disproportionately. We have consistently mentioned double-digit growth even amid uncertain circumstances, fueled by a solid influx of contracts this quarter.
We welcomed five new clients, two renewals, and two expansions, raising our total revenue visibility to $459 million. This gives us considerable assurance. Our net revenue retention surpasses 100%, indicating that our existing clients continue to support us robustly.
While economic uncertainties affect everyone, the potential surrounding AI and NIIT’s strategic position in learning and development boost our confidence, as reflected in the contracts secured this quarter.
Q: There has been both sequential and year-on-year growth, yet one notable downside is the EBITDA margin. Analysts expected that after the acquisition, you would stabilize the EBITDA margin close to the 20% threshold, but it has come in lower. What is the outlook moving forward?
A: To start, the margin aligns with our guidance. Indeed, it is below the 20% threshold because we mentioned that during the acquisition and integration phase, which generally spans two to three quarters, some impact is expected. In this instance, we didn’t have a full year of contribution—one case offered two quarters, and another, less than one quarter. That aspect will stabilize over time.
Additionally, product mix fluctuations may occasionally affect margins, but our overall growth path will remain strong. Notably, our net profit grew by 58% year-on-year in this quarter, which is significant.
Q: You recently acquired SweetRush in the US, and towards the end of Q2, you also acquired the Germany-based MST Group. You had stated that this business should contribute around 2–3% to revenue growth in H2, considering that Q2 is typically softer. How has that asset performed, and what margin profile are you observing there?
A: As previously stated, both acquisitions are relatively small but have performed exceptionally well. The German acquisition has been integrated seamlessly and secured large contracts, though there is considerable spending pressure in the German market.
As a result, converting those contracts into actual revenue has progressed more slowly. Nonetheless, our integration efforts are on track, and we remain optimistic about achieving the discussed targets over the next 12 months. It’s important not to judge performance based on one or two quarters, as integration and ramp-up require time.
Q: You’ve frequently mentioned AI. In Q2, you stated you would invest about ₹10 crore in enhancing your AI capabilities. What has the capex been so far? Moving forward, can you provide a breakdown of AI’s contribution as a percentage of topline?
A: I appreciate that you asked this, as it occupies a significant part of our focus—how to effectively integrate AI into learning and development to maximize its impact compared to other areas.
We are thrilled with the progress made and the use cases developed. Approximately 12% of revenue this quarter originated from AI-driven initiatives. AI is incorporated into every facet of NIIT Learning Systems, encompassing both performance and operations.
Consequently, we continue to invest in platforms and targeted offerings, which we will disclose at the appropriate time. We are encouraged by current results; AI has transitioned from a pilot program to mainstream, with clients now seeking concrete outcomes. Our use cases instill confidence that we can deliver those results.
NIIT Learning Systems currently holds a market capitalisation of ₹3,957.21 crore.
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