NIIT Limited (500304) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the NIIT Limited annual results conference call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vijay Thadani, Managing Director and Vice Chairman of NIIT Limited. Thank you, and over to you, sir.

Thank you, Margaret. Good afternoon, ladies and gentlemen. Our apologies for being a few minutes behind since many of us are distributed and getting everybody together on the same call is what our endeavor was. But first of all, thank you very much for your continued interest and supportive stance in NIIT. And of course, for giving us your time by joining the call today. We, first of all, hope that during these difficult times, all of you and your families, are staying safe and healthy. Today, we are here to discuss in this call, the performance for -- of NIIT Limited in the financial year which ended in March 2020, the performance of which -- the financials of which were discussed in Board meeting of today, and the Board just finalized the results, which is what we are here to share with you. We will also be talking about the special circumstances that the company has been through in quarter 4 and more than the circumstances which have, of course, affected just about everybody in this world. I think the responses which NIIT has given and is giving is perhaps would be of a greater interest to all of you. I just want to point out that every time this organization in the last 38 years that I'm associated with the organization. Every time this organization has gone through difficulty, the tenacity of the organization gets tested. And each time, NIITians and all our customers join us in handling this situation to the advantage of everyone. This time, a very agile response to the pandemic and then some very decisive strategic actions are the hallmark of how we have gone ahead and managed the first part of this exercise towards the end of the year. And then in continuing with the implementation of those during this year, how we see the future is something that we'll all discuss today. I have with me the Chairman of NIIT, Mr. RS Pawar. I have Sapnesh Lalla, who is the Chief Executive Officer, who's the captain of the ship as we would like to say, and who is steering the ship through the stormy water. I also have P. Rajendran, who's the joint Managing Director and a very stable anchor to the ship. I have the CFO, Mr. Amit Roy. I have Investor Relations, Mr. Kapil Saurabh; and all the senior leadership of NIIT available to you and available to us in this call to answer questions. I would now request Sapnesh to make his opening remarks and give you a brief summary of what all has happened in -- during the year and more specifically in quarter 4, how we have handled that, and then I will come back to you and talk about the divestment proceeds, which is definitely divestment of NTL stakes that we had done last year, the proceeds of that and how we are going forward with those projects and work. And he will also talk to you about certain bold decisions that he and his team have taken. So with that, over to you, Sapnesh. And after that, we'll open it up for Q&A, and all of us will join in that. Thank you.

Thanks, Vijay, and thanks, everyone, for joining this call. I'm hoping all of you are safe and healthy. Please note that, as always, the analysis here is on a year-on-year basis. Also, in accordance with accounting standards, AS 105, the net result, revenue minus expenses of discontinued operations as well as asset held for sale is reported as a separate line below operating results. This includes the net results of the Schools business housed in our wholly owned subsidiary, MindChampion Learning Systems Limited, which has been classified as an asset held for sale. Also, the results of previous quarters for our Schools business as well as -- have been put under this line item as well as the results of previous quarters have been restated such that you can see a like-for-like comparison. This past quarter has been highlighted by the impact that COVID has had on our operations as well as any -- as well as our global way of life. The spread of the coronavirus has caused an unprecedented health and economic crisis across the globe. Starting in Q4, governments globally have implemented some of -- some form of lockdown and placed various restrictions on businesses. These restrictions and requirements of social distancing have impacted businesses worldwide, and ours is no exception. These restrictions have impacted NIIT's businesses across various geographies. The company had to suspend operations of education centers in China, starting the third week of January. Similarly, in India and the rest of the world, including Africa, Indonesia and others, which were restricted from doing business for 3 to 4 weeks in March. The Corporate business across U.S., Europe as well as India saw significant cancellations or deferrals of planned in-person instructor-led training events starting early March. We also started seeing demand side impact for some key categories of our customers, such as customers who run IT services companies as well as in the BFSI segment in India due to massive slowdown in hiring. Our response, I think, can be characterized as an agile and -- a response that was agile and that was decisive in key strategic actions. Our response was punctuated by care for NIITians safety as well as safety of our customers. Our business continuity so that we could continue to service our customers when they needed us most. It was punctuated with new products and offerings, which we came out with at rapid rate, such that we could help our customers in this time of crisis. It was punctuated with our desire to conserve cash as well as control costs so that we can get on to the other side of this crisis stronger. It was also punctuated by NIIT making some key strategic choices to digitally transform its Career Education business in India as well as do portfolio rationalization. Some of the key highlights of our response include the cancellation of our global confluence event, which is a Flagship Annual Customer Conference, a day before the event was scheduled in early March. We enabled our workforce to shift to our work-from-home protocol globally such that all NIITians could be safe and away from the pandemic at their homes while supporting our customers on a 24/7 basis. We prioritize support for our customers and ensuring continuity of operations and ensuring that while all NIITians work from home our service delivery model transform to a model that could provide these services while all NIITians work from home. Our teams have worked with focus and determination to launch new and innovative offerings for our customers as well as going after new customer segments, not just to keep our lights on, but also to take advantage of the opportunity that has been created by this crisis. We took steps to conserve cash which is visible in our strong collections as well as in the improvement of our days of sales outstanding. Actions for cost rationalization, while work started in Q4, but we will see the results from these actions or the impact from these actions as we get into Q1. We also took strong and decisive actions for portfolio and cost rationalization. Our portfolio rationalization steps include acceleration of digital transformation of NIIT, more specifically, its Career Education business and its Skills & Careers business in India as well as the decision to divest its Schools business. The estimated first level impact of COVID-19 on revenues and EBITDA during Q4 is approximately INR 350 million in EBITDA and over INR 200 million in -- I'm sorry, INR 350 million in revenue and over INR 200 million in EBITDA. In the Corporate business, a number of our customers' businesses, specifically in the Oil and Gas segment and in the Aviation segment have been impacted. The situation is evolving, and it remains dynamic. Since there is no prior playbook, customers are also figuring out how to respond to a situation like this. Our instructor-driven learning business is the largest area of spend across our Corporate customers, and a majority of that was suspended due to the coronavirus situation. The IT programs had to come to a stop given the need for social distancing. We were able to convert a fair number of these instructor-led training programs to digital programs, but we were not able to convert all of them, and therefore, had to deal with those that were canceled or deferred. The Q4 and financial year 2020 performance for our Corporate business. First, let me take you through the financial year 2020 performance for the year as a whole. The Corporate business, while had a subdued start to the year after a strong FY '19 due to temporary impact on training volumes from 3 of our key customers due to M&A and strategic transactions. The company started accelerating growth on a quarter-on-quarter basis for the first 3 quarters and saw its business expand quite rapidly during the first 3 quarters. However, in Q4, because of the coronavirus impact, NIIT ended up or NIIT's Corporate business ended up with a growth rate of 9% on a year-on-year basis compared to a range of 10% to 15% as we had earlier guided. For the full year, the revenue, like I mentioned, was up 9% year-on-year at INR 6,913 million. The EBITDA margin was down 87 basis points at 13%. Q4. As I mentioned earlier, we entered Q4 with strong momentum, especially strong deal momentum. And during Q4, we recorded -- in spite of the coronavirus impact, we recorded a revenue of INR 1,754 million and saw a growth of 10% on a year-on-year basis. The growth also stood at 10% year-on-year on constant currency basis. The EBITDA margin declined to 8% versus the run rate margin of 15% that we had come to expect. This was due to the sharp and sudden reduction in volumes versus plan in March. While there is variability in the costs of the Corporate business, the sudden and deep impact pushed us into a corner, and we could not realize all cost reductions that we might have because a couple of those costs were already committed. We have since been able to take action on costs, and we will be able to see some of those -- that impact in our Q1. While the numbers tell a story of impact of COVID-19, there are some positives that are not visible in the numbers. As I mentioned earlier, the team showed agility and decisive decision-making in its response to the virus -- coronavirus situation. The business continues to attract global companies as new customers. During this year, the customer tally crossed 50, while it has taken us 5 years to cross 10 and 6 more to reach -- to cross 50, this year, we are now at 54. We added 5 new contracts in this past quarter, taking the total addition for 2020 to 14. The customer tally is now, as I mentioned earlier, at 54. In quarter 4, we acquired an EdTech company, 2 technology companies, a major airline as well as a large global retailer as our customers. Needless to say, each of these organizations is in the top 5 of their categories. This is the highest number of customer -- new customers that the Corporate business has ever had. In all, like I mentioned earlier, we acquired 14 new customers in the year FY '20. And this, I believe, is a key endorsement on the strong value proposition that our Corporate business brings to its customers. We also participated in a couple of large deals this past year. We transitioned 2 large contracts, and they are starting to reach run rate potential -- or they started to reach run rate potential this past year. Our contract with the Real Estate Council of Ontario initiated business operations in September of last year. As you may be aware, NIIT had proactively invested disproportionately on ensuring that this program was a digital-first program. While the corona pandemic hit, NIIT also invested and made sure that the aspects of that program such as assessments as well as simulations which were earlier physical or in-person aspects have also now been transitioned to a digital model. And so now all aspirants for real estate jobs in the Province of Ontario in Canada are able to achieve certification and education without having to leave their houses. NIIT also launched a number of new offerings during this quarter. Some of these offerings have already started showing results and achieving customer success. These included digital assessment services, virtual selling skills and rapid portfolio virtualization. As I look at the future for the Corporate business, Q1 is likely to see the full impact of the restrictions that were imposed because of the coronavirus situation. Even as restrictions are starting to get relaxed, the start of education delivery, especially in-person education, will take some more time to restart. Businesses are also seeing slowdown, so we would see some pressure due to the same as well. We expect further reductions in revenue on a quarter-on-quarter basis, although we may still end up with growth in Q1. Due to the ramp-up, specifically of deals that we have won in the last quarter and the deal velocity that we are already seeing in Q1. Our margins are also likely to be -- to follow the direction of Q4 but might improve marginally as the cost reduction measures start to take foundation. While there is still a lot of certainty -- uncertainty, we remain optimistic and expect some recovery in the second half of the year. Our deal wins have continued, including the deals from new customers in segments that the Corporate business may not have originally targeted. We're likely to see also an increase in outsourcing-related conversations as the pressure of cost starts to take a foothold at our customers or at our prospective customers. Given that our focus on training, market positioning as well as the strong balance sheet, we expect to emerge stronger at the other side of this crisis. We believe that over the next few months, we will see a push for greater outsourcing. And I think based on our positioning as well as the strength of the value proposition, we will be ready to take advantage of that situation and opportunity. Our Skills & Careers business is what I'm going to talk about next. The Skills & Careers business faced direct impact of the shutdown of education centers, both in India as well as in China. The impact in China started in January, where universities, where NIIT provides IT education to students, were shutdown and the students were sent home. NIIT rapidly switched its education delivery model to a digital alternative such that our existing students could continue to take advantage of high-quality education that NIIT had promised. COVID-19 has compressed the adoption cycle for digital businesses across industries. The same is happening to learning as well. As you are aware, NIIT has been a pioneer in the use of technology to improve learning efficiency as well as its effectiveness. Given the increased adoption of online education, NIIT has decided to transition its Career Education business to a predominant digital form such that our students have greater accessibility to high-quality education, while they are at the convenience of their homes. We will use our education centers to provide special services that our students might need as they are going through their education process, while the bulk of the education gets delivered from NIIT's digital platform, NIIT digital. Now with NIIT digital live, NIIT is not only able to deliver high-quality education to our students, but also enroll new students in its programs from the comfort of their homes and start offering them high-quality education programs, all digitally. While we do that, the students who prefer a face-to-face learning experience can also go to NIIT education centers as they may deem fit. Given that hiring has been impacted, enrollments for courses with a direct line of sight to jobs or for new hire training have been impacted as well in the IT sector, given that IT companies have announced plans to honor the offers at all campuses and other offers made prior to the lockdown, there may be opportunity in the second half of the year for the demand to get back up. Demand for deep skilling and hiring of skilled professionals just in place is likely to remain important, especially in the area of digital skills where NIIT's StackRoute business has made significant forays. In terms of the Q4 and FY '20 performance of the Skills & Careers business, FY '20 the revenue was down 15% year-on-year at INR 1,979 million. EBITDA turned negative due to the impact of coronavirus in Q4. For the full year, the EBITDA was negative INR 35 million as compared to positive INR 65 million for the first 9 months. In Q4, the revenue was down 41% year-on-year at INR 358 million. And given the operating leverage, EBITDA declined to a negative INR 100 million. Restrictions across geographies, including India and China, as I've mentioned earlier, resulted in 3 to 10 weeks of impact on our Skills & Careers business. However, the investment in NIIT digital enabled us to recover some of the lost ground and set ourselves up for a better future. As indicated earlier, we expected -- while we expected the business to be down year-on-year in Q4 due to rationalization of some of our products done over the past few quarters, there was an additional 30% impact due to COVID-related restrictions in Q4. Overall, for FY '20, NIIT's revenue stood at INR 8,892 million, and it was up 3% on a year-on-year basis. The EBITDA stood at INR 852 million. The depreciation was higher primarily due to the impact of IND AS 116, resulting into reclassification of lease rentals as well as the amortization of content for our Canada contract. The profit after tax for the year was INR 13,275 million, and the full year had positive impact of NIIT's -- sale of NIIT's investment in NIIT technologies, which was completed in Q1 of FY '20. In terms of Q4, NIIT revenue stood at INR 2,112 million, down 4% year-on-year and the EBITDA stood at INR 31 million. As I had mentioned when I started, the net results below the operating results was minus 65 -- INR 66 million. This was the net of discontinued operations as well as the net of our Schools business, which is set up as asset held for sale. From a balance sheet perspective, our DSO improved to 51 -- 57 days as compared to 67 days at the end of FY '19, showing the improved collection and cash situation in FY '20. I would now hand over to Vijay to take us through the holding and -- divestment of holding and its proceeds and the utilization of those proceeds from NIIT Technologies.

Thanks, Sapnesh. I'll keep it very short because we need some time for answering your questions. So I just wanted to say that net cash available from the transaction after providing for transaction-related costs, transaction tax or tax on transaction, debt repayment and keeping a prudent reserve for indemnity was INR 1,442.6 crores. We had agreed that part of -- we had agreed -- our Board had pointed to the direction that we would like to share a good part of it with our shareholders as a reward. And therefore, in that direction, we have been -- just wanted to give you an update on that. So in addition to the reward, we were also to look at investments in growth capital, of which now there are 2 substantial opportunities available, as you can see, and also keep a prudent reserve for any adversities which was the way, the funds were to be applied. We, so far -- we, first of all, started by paying INR 5 per share as dividend, a final dividend on for FY '19, which was INR 103 crores, approximately, including taxes. We paid then an interim dividend of INR 8 per share in February 2020, which led to an outflow of nearly INR 137 crores. We also completed a buyback of 26.8 million shares, comprising 16% of the equity at about INR 413-odd crores. And finally -- so at the end of this, we had utilized approximately 45% of the free cash available from the transaction as having shared with our shareholders. After the interim dividend in February, despite very adverse conditions at this time which the whole world is going through, where companies are conserving cash and cash-rich companies are coming up with rights issues to shore-up more funds, we felt that as we have maintained a tradition right from the time that we went public, barring 4 years when we just did not have the adequate profits at all when we discontinued payment of dividend, that we should maintain a steady flow of annual dividend as long as we have the cash in our balance sheet for that purpose. So keeping in line that theme and that value, the Board approved this morning and recommended to the shareholders a dividend of INR 2 per share, which along with INR 8 interim dividend given so far for the year makes it INR 10 per share as the total dividend for the year. This would involve a payout of INR 283 million. And with this, NIIT would have utilized 47% of the cash available -- free cash available from the proceeds. Sapnesh already talked to you about some decisive actions that the team recommended and the Board has approved to fund these -- the specific one being related to divestment in schools because we felt that a strategic buyer would be able -- who's focused on just the Schools business would perhaps be able to give the deserved attention that it needs at this point of time to take advantage of opportunities ahead. It has a rich heritage, and it would be a great asset to anybody who can add them to their armor. So with that, I would stop here and open the floor for questions.

[Operator Instructions] The first question is from the line of Ashish Aggarwal from Principal Mutual Funds.

Sir, I have actually 2 or 3 questions. First of all, on the Corporate Learning business. So we spoke about Q1 being -- will have the full brunt, but still, we will grow in Q1. So we are referring to on a year-on-year basis, am I right on that?

That is correct.

And on the margin front, when we said that we have taken some cost rationalization impact benefit -- efforts, so that should improve our margins on a Q-on-Q basis?

Marginally, yes.

Okay. And also on the deal front, right? So we -- I think we have signed 3 or 4 deals. Any of these deals were material enough, which could have -- I just wanted to understand this thing where we said that we expect some stability in the second half. Where is this confidence in second half coming from on the Corporate Learning business?

Sure. I think that's a very good question. As I mentioned earlier, we saw a very strong deal momentum as we were exiting our third quarter last year. And that caused us to win 5 new deals in Q4, and we've seen a significant deal flow in our first quarter as well because of the strong pipeline that we had. I think while the performance of these deals given the corona situation may not be at potential right out of the gate. But still, the fact that we have 5 new contracts already from Q4 and some in the pipeline and some already closed in Q1, we feel that these contracts will start becoming material from a revenue production perspective as we get into the second half. The second thing I would say is that by the time we reach second half, I feel that the cost side of the coronavirus impact for -- specifically for our customers will start precipitating conversations around outsourcing. And I think we are well positioned to be one of the key contenders as these conversations start maturing.

And also, sir, on the disinvestment of our Schools business. So how close or how far are we in doing that, the disinvestment?

I think what we have articulated here is our intent, and that's the reason why we have done the action. As soon as we have something material to report, we will come back to you.

And lastly, sir, what would be the free cash flow in Q4 and for the full year?

We will...

Yes. So from a free cash flow point of view, cash from operations was INR 410 million.

INR 410 million.

Sorry?

Cash flow from operations was INR 410 million for the full year and INR 26 million in quarter 4. And the CapEx for the year was INR 65 crores.

Okay. Got it. Okay. But with this INR 65 crores of CapEx, where was it spend? Because it look very high?

A large proportion of this was for the Canada project, both for content and platforms and NIIT digital. Most of that is done. There is a little bit or a tail remaining towards that.

And what would be the CapEx now going into '21 and '22?

I would like to just add to what Kapil said. Last year, we -- when we divested in NIIT Technologies, we used to have use a shared service center for SAP, our ERP system operations. So at that time, when the companies had and demerged, that this was continuing since that time. So we had to invest in our own resources on the ERP system, and that's what also contributed quite substantially. So the software licenses as well as the investments in ERP system as we separated the 2 parts would be the 2 contributors.

Yes. So Ashish, this is Raj. We've been pointing out that once we get past some of the investments that we are doing, the run rate investments will come down. We are investing, I would like to point out on NIIT Digital, because that's a big area of focus that we have undertaken and actively conversion and transition to NIIT Digital is the big focus area for this year.

Any other questions Mr. Aggarwal?

No I just wanted to understand this CapEx on NIIT Digital?

Again, it will be in the platform development as well as...

Predominantly in platform and product development.

Yes.

Any quantification of that number?

Not at this time. But as we start looking at the next couple of quarters, we will come back to you with better quantification.

[Operator Instructions] The next question is from the line of Shradha Agrawal from Asian Markets Securities. We would request you to please unmute yourself from your handset and ask your question.

Yes, can you -- hello?

Yes. We can hear you now. We can hear you now.

And Sapnesh, you did indicate that you have undertaken some cost controls and the effect of that would start getting reflected from first quarter marginally and probably in second half. So what are these initiatives which we have undertaken? And supposedly, if we were to get to a flattish kind of a run rate if not growth in first quarter, then what kind of leverage can we have on the margin strength because of these cost cutting initiatives?

See I think as you might expect, given that we are a services company, a predominant number of -- predominant amount of our cost is around people-related expenses. In addition, we have costs -- significant costs with respect to leasing of facilities, travel and transportation, marketing and so on and so forth. At this point in time, we are looking at cost reduction measures across all these dimensions, which would include people-related costs, both our own as well as the variable resources that we use the leasing of facilities to a fair extent, the acceleration into NIIT Digital will release costs from facilities as well as increased work from home will reduce the lower on facilities as well as the virus-related reduction in travel, both business as well as for face-to-face classes and as well as transportation-related costs. So we're looking at a number of these costs and taking significant actions to reduce these costs so that in spite of the fact that revenue is going to see a decline. We had to show an improvement in our profits, even though marginal.

Right. And on the Schools business [Audio Gap] I mean what kind of investors are you really approaching for the stakes there?

I think there are investors or organizations who are both in the business as well as those who want to get into the business, given the digital opportunity that this business has potential for. So there are a number of organizations that we are looking at and as soon as we have something material to share, we will come back to you.

Right. And on the -- last bit on the Skills & Careers business. Can you throw some directional sense on how should we look at the StackRoute and TPaaS initiatives in this portfolio?

For the year, both StackRoute and the TPaaS portfolios grew together, while their growth was muted for the fourth quarter, but for the year, both initiatives grew and as I was mentioning, we are going to enter a phase of uncertain hiring where organizations are going to switch to a just-in-time hiring model rather than hiring -- during the hiring season and then creating a significant bench. And I think for that TPaaS model is very well positioned. In addition to that, more and more organizations are going to become digital or become significantly more digital than they currently are. And given that StackRoute, focuses on education that enables people to become digital product engineers or full stack product engineers positions us well to take advantage of that. So both of those initiatives, I think will start seeing improvement as we go down the year.

But in the current quarter, did we see some deferments or cancellations of any earlier lined up programs in StackRoute from any large Tier 1 IT company?

We did see given a fair amount of StackRoute education is also face-to-face. We did see some cancellations in the month of March, a fair bit because no one was able to come to class. We were able to move some of that to digital, but not all. And so we did see a significant amount of reduction in our business as of March. We have now transitioned that business completely to digital. So 100% of what we are doing is digital. But of course, the volumes are not as high as we had earlier. But I expect that this situation also is accelerating adoption of new behaviors. And my expectation is that over the next few months, we will see stronger adoption of the digital or remote immersive methods of education.

The next question is from the line of Anurag Jain, an Individual Investor.

Am I audible?

Yes.

I have 2, 3 questions all related to your marketing and advertising expenses. First question is basically, you have a somewhat nomenclature for -- instead of advertising and sales promotion, you call it marketing and advertising. So does it include the cost for -- staff cost for marketing staff and travel costs related to marketing? Why is this nomenclature a bit different? And if you could throw some light on what all it includes? And then the second question related to the same thing is basically, marketing and advertising expenses were INR 27 crores last year financial FY '19. And in the 5-year period from FY '14 to FY '19, you have spent INR 184 crores on marketing and advertising. And this is a significant number considering that in those same 5 years, the profit before tax cumulative basis was INR 375 crores. So this marketing and advertising expenses were almost like 57% of your profit before tax. So if you could throw some light on where this marketing and advertising expenses on what businesses does it cover, what geographies does it cover, and what sort of customer segments these marketing and investment -- marketing and advertising expenses are targeting? Because this is a significant amount that you have spent in last year as well as over last 5 years. This is it, is all.

Okay. We would have to get you the exact details quite independently, but let me give you the way we do our accounting. And that's in -- that's very consistent with the way the GAAP works, the U.S. GAAP works and the Indian GAAP works. So we have 4 -- our expenses are divided in 4 categories: one, our variable expenses. These are expenses which vary with revenue. And therefore, given that you've started the balance sheet, I'm sure you would have thought those are known as variable costs. The second are direct costs. And direct costs are typically direct people, direct premises, direct travel, direct telecom. So these are direct expenses, which are required for fulfillment of projects. Then what is popularly known as SG&A in international terms, the S part of SG&A is sales and marketing expenses. These are sales and marketing people across the world as well as the sales and marketing agencies as well as any digital advertising, which we may be doing as well as any corporate communication activity that we might be doing. Our sales -- our advertising costs, I don't think are anywhere near, because the number that you are talking about. At one time, when our domestic business used to be INR 450 crores to INR 500 crores, at that time, our total cost of acquisition of a customer used to be south of 15%. In current times, with the strained times, it may have increased to 20% to 25%. But on a global basis, all our sales and marketing costs are south of 15%. And I have to sit with you to understand where you are getting your numbers from and then maybe we could get back to you.

No, no. I'm saying that cumulative 5-year marketing and advertising expenses is INR 184 crores and this is 67% of profit before tax. You guys are comparing it to revenue, I'm comparing it to the profit before tax. So this is a significant number considering the profitability because the profit before tax is INR 375 crores. So this is -- this amount is almost 67% of your profit before tax. I'm not comparing it to the revenue. You are comparing to the revenue. So that's the difference.

Right. Right. No, right. Maybe we can work or we can speak to you offline and explain to you because over the cumulative 5 years, we would have recorded a revenue of close to 400 -- INR 4,000-plus crores. And if that INR 100 crores and INR 200 crores that you are referring to or INR 300 crores, you are referring to would come to 6% to 7% of that. Typically, sales and marketing expenses are calibrated as a percentage of revenue. Your profit is dependent on a large number of other things and sales and marketing is not one of the -- is one of those, but not the only one. But we'll be very happy to spend time with you. Thank you so much for taking so much interest. I will have Kapil Saurabh -- I think we have your contact details. I'll have Kapil Saurabh talk to you, then whatever clarification we'll give to you, we would also make them available to the rest of the investors on our website, which is our standard practice.

The next question is from the line of [ Neha Jain from SKS Capital ].

Just one question. I missed your guidance for the utilization of the cash. Could you kindly repeat that?

You didn't miss anything cause we didn't give any. I just mentioned the utilization of -- I did talk about a dividend that the Board has recommended to the shareholders of INR 2 per share right now. And I also talked about the INR 8 interim dividend, which we had approved, which you are already aware of in February, and therefore, the total makes it INR 10. I also talked about how we utilized the proceeds of INR 2,020-odd crores, which we have got after divestment, which after expenses and other commitments was left to INR 1,400 crores, of which INR 650-odd crores were already shared with the investors, with our shareholders. And with this dividend, now a total of 47% of those proceeds would have been shared. The balance amount at this point of time is being kept: number one, to handle the uncertainties of the next, I would say, 18 months now, which at onetime appeared like 2 or 3 quarters phenomenon just to see how the situation evolves so that if we need to get encashed, which is one reason. The other is, it is at this time that you get large number of attractive opportunities very good assets become available at very attractive prices. We would like to be ready to take advantage of such opportunities. And the third part is the growth capital, which, in this case, is NIIT Digital and the Corporate Learning Group's initiatives for growth, which are the originally defined applications of these funds. We will continue to be looking for opportunities in a staggered manner as situation stabilizes to share more of this proceeds with our shareholders.

The next question is from the line of Rahul Jain from Dolat Capital.

Just wanted to clarify, does your commentary for positive growth in Q1 on a Y-o-Y basis so early captures even the demand price is falling for the company or is it more about the recovery on the supply side sector? If yes, does that -- should it imply that we should only grow in all subsequent quarters as the new deal ramps?

Thanks for your question. Like I pointed out, we've had strong deal velocity. We closed 5 new opportunities in Q4. And during that year -- during this past year, we've acquired 14 new customers in our Corporate business. While because of the coronavirus situation, each of these deals will take a little bit longer to reach potential. But the fact is that we have 14 new customers, and they will start spending money with us. That's one of the reasons why we feel that in spite of the current situation, where from an each customer perspective, we might have contraction in terms of demand. But given that we added 14 new customers in this past year, we'll see some uplift in demand, and that's really how I felt that we will be able to provide a slim growth in our first quarter.

Okay. And so when we say that we are putting this business on block for the strategic investor, does the impact on our financial would be -- what should be the impact? So revenue -- is it completely for this division should be out from the books? And what about the capital employed? And will the potential sale also involve people transfer and how much?

So first of all...

Maybe I -- if you don't mind, I will interrupt you folks for a minute. I'm noticing there is intense interest in -- and I think Sapnesh's original brief also went a little long, so I am -- with everybody's permission, extending the -- our conference call by another -- by 15 minutes to now go until 16:45 or thereabouts. So Sapnesh continue with the response.

If -- and maybe I misunderstood your question, but let me just articulate my understanding of your question. I think you said that we are looking at putting our Corporate business as an asset held for sale. I don't think that's true, and that's the furthest thing from truth. We are looking at putting our -- or we have both our Schools business as an asset held for sale. And our traction...

Sorry. Sorry to bother. But actually, I mentioned still -- sorry, Schools business in place if I talked the other way. So I'm referring to the Schools business.

Okay. So yes, we are -- so it is our intent to look at a strategic buyer or an investor in the Schools business. And for that reason, we have put the school -- classified the Schools business as an asset held for sale. And as we have something material to share with you, we will come back. What you asked for our questions related to how a deal could pan out, and we will discuss those once we have something to share with you.

I just want to clarify one more thing in this discussion. If you see the past history of the organization, typically, any divestment of any -- or investment in anything typically is never done on -- in our system till a transaction fructifies. In the current case, there might have been discussions and minutes in which some discussions like this would have been held. And therefore, it was felt that under Ind AS accounting standard, it will be prudent to disclose that so that shareholders have kept abreast of developments such as this one. So as and when a suitable deal fructifies definitely, the organization will share the development. But as of now, at this point of time, especially in the lockdown period, there is nothing at this time under discussion.

Yes. Understood. I mean the simple question was, does this involve some assets as part of the transactions or is it just the existing contracts, which gets transferred? And with the asset, does it involve human, I mean be in transfer also? And it's fine if you would not like to comment at this point.

Yes. Again, the questions you are asking would become very specific, and I would much rather respond to those when we have something to share.

The next question is from the line of [ Ramesh Shetty ], an individual investor.

Sir, I just want to ask one question regarding our Skills business. As compared with now present situation of the entire Skills and Services business, do we think that our franchisee model business is not viable anymore as it used to be in the initial stages of the business? And in a few quarters or a few years, we can see at the end of franchisee model of our business?

I think that's a very intriguing thought. From our perspective, I think it's important for every business to move with times and modernize itself and offer services that are convenient, effective and impactful. For its customers, our customers are preferring to get a fair part of their education online. Our partners are with us in this decision. They are continuing to differentiate themselves with offering a blended mode of education, where a student has the option to seek a fair bit of their education online but are also provided specific student services at our education center. So I don't think it's right to assume that the business model is not viable. However, the times are changing. The behaviors are changing and NIIT needs to adopt itself to the changing behavior and create business models that are relevant for today and tomorrow. And I think that's really what we are trying to do here.

Yes, sir, my second question is regarding Corporate Learning Services. As we have acquired Eagle Productivity and we had a major say in Pharma business. Are you seeing any uptick in pharma-related activities as far as Corporate Learning is concerned?

Indeed, we are. We are seeing significant growth in Pharma or Life Sciences business. Life Sciences this year is a very substantial vertical for us, and it's a growing vertical. As you might imagine, Life Sciences is also an industry segment that is doing well in this current time. Among the few industry segments that is not as deeply impacted as some of the other segments are. So we are seeing growth in that segment. We are also starting to see this segment look at learning, outsourcing or managed training services as a method of improving the efficiency and effectiveness of their L&D organization. So we are seeing significant traction in the Life Sciences space.

The next question is from the line of [ Jay Daniel from Entropy Advisors ].

Yes, sir, I didn't catch on to this. What is your total cash on hand as on date?

INR 1,208.8 crores.

INR 1,208 crores and this -- there are no encumbrances. This is net of debt?

This is the -- is this the net cash or...

No, this is gross cash.

This is gross cash. Net cash would be very...

INR 1,150 crores approximately.

INR 1,150-odd crores. I can give you that number.

Okay. Any major receivables that are pending? I mean from the Schools side or any...

Well, we have a tale of past -- a small tale of past receivables. We are very hopeful that this year, we will not have to do too much follow-up because government has gone out on a limb and said that they will settle all their dues. So we are hoping that, that will happen very, very soon. After that, there will be no -- hardly any government receivables left. We've been very tight on giving credit. And that may have also contributed a little bit to our quarter 4 revenues, but we were wanting to be sure that we give credit to only those who can, who we are sure would be able to pay back -- pay us on time, knowing that everybody will be under some challenge or the other. Our receivable days, if you see our DSO days, have actually come down on a quarter-on-quarter basis. Our cash from operations has improved despite a performance, which is very, very, very muted. The third thing, which I do want to say is that if in the days sales outstanding, if you see overdue receivables they will be a single-digit number of days.

Low single digit number.

Yes, low single-digit number of days, which means most of them are the year-end or the quarter end deals which would have by now got cleared or will get cleared very shortly. So I think we are much stronger than in the previous lockdowns, where we had strong -- big exposures to receivables. I do remember the 2002-'03 and toward 2008-'09, when the government receivables were a big overhang on us. But this time, I think we are in a very, very good situation.

The exact amount of net cash is INR 1,144.7 million.

INR 1,144.7 crores.

INR 1,144 crores?

INR 1,144.7 crores.

INR 1,144.7 crores. Okay. And what is your TPaaS revenue as on date? I mean what is the run rate?

TPaaS.

Yes. We report StackRoute and TPaaS together. They comprise about 40% of our Skills & Careers business for the year.

They comprise 40% of Skills & Careers. Okay. And in your Skills & Careers, what part of it comes from corporate customers?

About 1/3 or a little less comes from corporate customers or B2B engagement. There is quite a bit of overlap between the way we are teaching learners and acquiring learners and who is paying for it, and there is a mix. So sometimes it's not very cut and right, but that's approximately, if you have to take a shot at it, that's about 30%, 33%.

33%, 30% or 33%. Okay. And in your Skills and -- how much have you invested in NIIT Digital till date? I mean for example, last year, how much did you invest?

So we've not been reporting initiative-wise breakup for investments. I think we'd like to keep it that way because some of -- because then it starts to get into a domain where customer-specific data starts to be revealed. So we won't like to enter into that. If there is something big to be called out, then we have been calling that out.

Okay. But will there be something big in the current year?

Look, it is a meaningful amount. It's not going to be disproportionately high. It's -- as we said, we expect on a full year basis, the run rate of CapEx to come down. It will be within that rate.

Sir, and in the Schools division, what kind of multiples are these businesses normally getting sold in the...

Look, we can look at past multiples. They will have -- I think they'll have to be rediscovered. There is obviously an impact because of COVID on the existing business. But at the same time, there are new opportunities and sometimes value is in the eyes of the beholder. So we'll have to look at where we are and the conversations we have. As Sapnesh pointed out, we will report the details when we have something specific and confirmed to be reported.

Margaret, if there are more questions, maybe we can take one more and then -- or otherwise, we will stop this discussion right now because we are shoot -- overshooting the second time line also.

Sir, we don't have anyone in queue. Would you like to add any closing comments?

Okay. So first of all, thank you very much for your continued interest as well as being with us at this difficult time. I wanted to add 1 more time. The whole NIIT is very proud of the agile response, which the team had to the current crisis as well as some of the very decisive actions which have got taken, much -- many of those we discussed in the last 60 minutes. I do want to say that what the results do not show, what they show is that our performance was very muted. What the results do not show is that it could have been much worse because imagine that 4 out of 13 weeks, if I was to average out the time that China was closed, the time India was closed, the time the rest of the world was closed, 4 out of 13 weeks of a quarter gets wiped out, then the impact would have been much, much more severe. I think it is because of some agile responses that we were able to save nearly 50% or more of that impact. I wish it was more, the team also wishes it was more but I'm sure that their teams did put their best foot forward. Having said that, if last quarter, it was 1 month, then this quarter, it is all the 3 months as the things stand. But we are better prepared and you could perhaps sense the optimism in the team that, at least in some parts of the businesses where we have more mature and longer-lasting customers, who are less prone to these things and have some proactive responses will respond to these things much better. And therefore, the teams combined with our actions as well as our stable set of customers are confident of containing the damage very, very strongly in the coming quarter, after which, we hope things will continue to improve quarter-on-quarter. So with these words, I want to thank you for joining us. We would continue to remain available to you for any questions you may have or any clarifications that you require on any of the subjects. We would like to be in dialogue with you. We would like to receive your suggestions as well. And please feel free to contact Kapil Saurabh, as the single point of contact, but both Sapnesh and myself and in addition to us, the rest of the management team is available to you. So thank you once again for joining the NIIT Annual Results Call.

Thank you. On behalf of NIIT Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.