NIIT Learning Systems Q2 FY27 results: net profit down 20.5% to ₹37.31 crore, revenue up 11.1%

How did NIIT Learning Systems perform in Q2 FY27?

NIIT Learning Systems reported consolidated revenue of ₹528.58 crore for Q2 FY27, up 11.1% from ₹475.72 crore in Q2 FY26. Against Q1 FY27, revenue fell 6.5% from ₹565.08 crore. Total income was ₹534.42 crore, up 10.4% year on year but down 8.1% from the previous quarter.

EBITDA was ₹79.54 crore, down 14.2% from ₹92.71 crore a year earlier and 14.4% from ₹92.96 crore in the previous quarter. EBITDA margin fell to 15.0% from 19.5% year on year and from 16.5% in the previous quarter. Net profit was ₹37.31 crore, against ₹46.96 crore in Q2 FY26 and ₹57.41 crore in Q1 FY27, while basic EPS was ₹2.70, compared with ₹3.43 and ₹4.17 respectively.

On a standalone basis, the company reported revenue of ₹143.08 crore and profit after tax of ₹22.22 crore. The consolidated figures include the company’s wider group operations, while the filing also presented standalone results.

What changed in NIIT Learning Systems' costs and profit?

Total expenses rose 17.5% year on year to ₹480.05 crore, compared with ₹408.71 crore in Q2 FY26. Employee cost increased 18.9% to ₹248.16 crore from ₹208.79 crore, while other expenses rose 13.4% to ₹195.20 crore from ₹172.08 crore. Depreciation rose 21.9% to ₹22.42 crore from ₹18.39 crore and finance costs rose 17.5% to ₹8.59 crore from ₹7.31 crore.

Other income fell to ₹5.84 crore from ₹8.32 crore a year earlier, while the exceptional charge declined to ₹3.36 crore from ₹6.03 crore. The company’s presentation attributed lower other income to treasury income of ₹54 Mn affected by a mark-to-market loss on rising interest yields. It also reported ₹42 Mn of finance cost from fair-value adjustment on future acquisition liabilities, ₹32 Mn of acquisition-loan interest, and exceptional expenses of ₹34 Mn for legal and professional services related to inorganic investments.

Profit before tax fell to ₹51.01 crore from ₹69.30 crore in Q2 FY26, while tax expense fell to ₹13.70 crore from ₹22.34 crore. Net profit consequently declined to ₹37.31 crore from ₹46.96 crore. Against Q1 FY27, other income fell to ₹5.84 crore from ₹16.56 crore and the exceptional charge rose to ₹3.36 crore from ₹1.12 crore.

How did the first half of FY27 go?

For H1 FY27, NIIT Learning Systems reported revenue of ₹1,093.66 crore, up 18.0% from ₹927.07 crore in H1 FY26. Total income rose 17.7% to ₹1,116.06 crore from ₹948.47 crore, and profit before tax fell 9.3% to ₹129.10 crore from ₹142.32 crore.

What do the balance sheet and cash flow show?

Total assets were ₹3,061.57 crore at 30 September 2026, compared with ₹3,060.40 crore at 31 March 2026. Total equity was ₹1,630.38 crore, compared with ₹1,542.89 crore, while borrowings were ₹239.97 crore against ₹267.39 crore. Cash was ₹360.03 crore, compared with ₹394.31 crore, and trade receivables were ₹441.12 crore against ₹377.76 crore.

Cash flow from operations in H1 FY27 was ₹87.53 crore, compared with ₹108.60 crore in H1 FY26. Investing cash flow was negative ₹42.01 crore against negative ₹262.30 crore, while financing cash flow was negative ₹83.29 crore against positive ₹96.07 crore. Capital expenditure was ₹28.53 crore in H1 FY27, compared with ₹18.81 crore in H1 FY26.

How has NIIT Learning Systems done over the last 8 quarters?

Revenue rose year on year in each of the last eight quarters. It reached a peak of ₹565.08 crore in Q1 FY27 before falling to ₹528.58 crore in Q2 FY27. Net profit peaked at ₹77.11 crore in Q4 FY26 and fell to ₹37.31 crore in the latest quarter, while EBITDA margin declined from a peak of 21.9% in Q3 FY25 to 15.0% in Q2 FY27.

What else did the company announce?

The board approved the consolidated and standalone unaudited results for the quarter and half year ended 30 September 2026, together with limited review reports carrying an unmodified opinion from the statutory auditors. It also approved the proposed appointment of Price Waterhouse Chartered Accountants LLP for five consecutive years, subject to shareholder approval and applicable statutory and regulatory requirements.

NIIT (USA), Inc., a wholly owned overseas subsidiary, completed the acquisition of 100% membership interest in Bluewater Learning, LLC. The cash consideration is up to $17.6 million, including earnout payments over the next five years based on Bluewater’s performance. Bluewater’s estimated turnover for the twelve months ended 30 September 2026 was $8.5 million.

What did the auditors point out?

The auditors’ limited review reports included an emphasis of matter. In the consolidated report, S. R. Batliboi & Associates LLP drew attention to the restatement of comparative Goodwill and Other financial assets in accordance with Ind AS 103, and to the restatement of comparative unbilled revenue previously shown under Other financial assets instead of Trade receivables. The opinion was not modified on these matters.

The standalone report also contained an emphasis of matter concerning the restatement of comparative unbilled revenue previously disclosed under Other financial assets rather than Trade receivables. The auditors stated that their opinion was not modified in this matter. The filing did not identify a going-concern qualification or a qualified opinion.

What did NIIT Learning Systems' management say?

Management maintained FY27 guidance for high-single-digit constant-currency revenue growth, with potential to reach double-digit growth including Bluewater, and an approximately 18% full-year EBITDA margin. The company expects contracts won in Q2 to ramp during H2, with most of the acceleration visible in Q4, and said post-integration margin is expected to move toward 20% as acquired businesses become accretive.

CEO Sapnesh Lalla said: “Revenue and margin fell short of the guidance we gave you in July, and we are not satisfied with that.” Management also said client learning and development budgets remained tight, discretionary and project spending was being cut first, and restructuring and headcount pressure were delaying client spending. H2 and Q4 contract ramps may be delayed by macro conditions and client decision pace.

Management reported revenue visibility of $510 million, up 25% year on year, and said a five-year managed-learning win could become the company’s largest client. It also said Bluewater consideration was up to $17.6 million, including earnouts over five years, and that Bluewater was likely to become margin-accretive over the next four to six quarters.

How did NIIT Learning Systems shares react?

After the filing, the stock fell 8.0% within 5 minutes, 5.6% after 15 minutes and 7.0% after 30 minutes from the price at which the results appeared. On the reaction day, it fell 16.1% from the previous close of ₹188.36, while the Education sector median moved down 1.1%. The stock therefore underperformed the sector by 15.0 percentage points on the reaction day.

By the next trading day’s close, the stock was down 8.4% from its pre-results close, while the sector median was up 0.7%, giving an excess sector move of negative 9.1 percentage points. Earlier results-day reactions were positive 1.2% on 23 July 2026, negative 8.3% on 12 May 2026 and positive 0.7% on 28 January 2026.

How did other Education companies do?

Six other Education companies had filed for the quarter by 4 November 2026. Their median revenue growth was negative 2.8%; four peers grew more slowly than NIIT Learning Systems and two peers grew faster than the company. Of the six peers, three reported higher profit.