If fiscal 2001-02 was the worst in the history of the training industry and
NIIT, fiscal 2002-03 was only slightly better—training revenues continued
their downward march, though some deft moves in the BPO space did stem the slide
some. In the final tally, NIIT showed 3% negative growth (26% negative growth
under the new accounting system*). What the company has had since 1999,
therefore, are two of its strongest years—27% and 25% growth in fiscal 1999-00
and 2000-01, respectively—followed by two of its weakest, in fiscal 2001-02
and 2002-03.
Even as an industry, the IT training space had a rough year, registering 23%
negative growth. For top players like NIIT, 2002-03, at best, was a period of
consolidation; of regaining ground lost in the aftermath of the downturn. As the
industry’s revenues continued to decline, margins were squeezed. To battle
this, NIIT overhauled course offerings and rewrote strategy. With the career
segment hit hard, it offered programs linked with globally-recognized
certifications, perceived to be better for finding employment. The company
witnessed a marked increase in demand for short-term courses, as against
long-term ones.
The compulsion to keep pace with the changing complexion of the IT industry
was felt again—and NIIT experimented with product bouquets and offered courses
specific to the BPO space. And for the second year running, NIIT did its ‘Math,
Physics and Chemistry’ thing—it kept acquiring when it found a fit. It
bought out eGurucool to strengthen focus in the IT-assisted education space, and
tied up with Japan’s CAC Corp to tap into the system re-engineering space in
the Japanese market. Its software business was flat, but in the face of training
being hit again, that was a distant blip. What needed to be fixed first was the
company’s first focus area—it was that kind of year.
*Note: NIIT has changed its accounting methodology
with effect from fiscal 2002-03. The revenue figure of Rs 883 crore for 2002-03—used
in the story and graphic—has been arrived at using the company’s old
accounting norms in order to present a true comparative picture, against
revenues of Rs 907 crore in 2001-02. Under the new accounting method, NIIT
revenues for 2002-03 are Rs 670 crore. The difference comes from the change in
the billing arrangements between the company and its franchisees. Also, the
figure of Rs 418 crore used for training revenues is as per the old accounting
system. Under new accounting norms, training revenues are Rs 207 crore. There’s
no change in export revenues under the new accounting system, and they remain
the same. NIIT and Dataquest will be reporting numbers as per the new accounting
system only from fiscal 2003-04 onward.
