NIIT Limited (500304) Earnings Call Transcript & Summary

Just -- I just said that we thank you for your interest in NIIT and for being here with us. We hope that you are staying safe and healthy. In this call, our agenda is to discuss the business performance for the first quarter of the financial year '21, '22. And we would also discuss future direction and opportunities and, of course, be ready to answer all your questions. As usual, we have the whole leadership team available. Sapnesh Lalla, our CEO, would lead this discussion. And then I am available; Sanjay Mal, the CFO; Kapil Saurabh, Head of Investor Relations; and Gaurav Relhan, who's also a finance colleague, would be here to help us with all the answers. I also have Mr. Pawar and Mr. Rajendran on another line, and they would be also very happy to answer questions as and when it becomes necessary. So I just want to make some very brief opening comments and then hand over to Sapnesh to talk a little bit in detail. First, in a very highly volatile and uncertain environment, there were many days in the quarter we were under tremendous constraint because of the resurgence of the pandemic. The team has delivered, in our opinion, exceptional results, both in terms of growth and profitability. The second is the results continue to show a remarkable recovery and acceleration, enabled by the digital transformation that the company has achieved. It's been driven by agile and decisive actions of the leadership team over the last 6 quarters, leveraging the depth and breadth of our experience in learning technologies and strong execution capability that we have demonstrated over the last 4 decades. The results also show that this -- the efficiency that a digital learning model can deliver can help a lot in building a strong profitability base. So though the journey to global leadership is long, but I think each of these milestones are helping us get closer to where we want to be. So with that, I would like to hand over to Sapnesh to give us a brief of this business performance in this quarter. Then we'll open it up for questions and answers.

Thank you. And I would echo your thoughts on the highly volatile and uncertain environment, specifically, the tragedy that marred the beginning of -- and the middle of this past quarter. And more than the performance, it also showed how human we can all be and how fragile as well as resilient all of us can be. So interesting times but an exceptional quarter in those interesting times. So thanks, Vijay, for the kind words. From an overall perspective, again, disclosure, please note that the results of previous year have been restated for like-for-like comparison in accordance with the accounting standards. Let me start with the overall highlights. The revenue stood at INR 3,010 million, up 49% year-on-year and 9% quarter-on-quarter, sequential improvement driven predominantly by the CLG business, which I would cover in just a minute. The EBITDA was at INR 721 million, up 196% year-on-year. EBITDA margins of 24% up 1,188 basis points versus the 12% in Q1 last year. Margin was lower quarter-on-quarter as we started to ramp up investments in NIIT Digital and other IT-based opportunities that we are pursuing globally. That was at INR 514 million, up 78% year-on-year. And the EPS was INR 3.80. Please note that the EPS includes the impact of the buyback and the number of outstanding shares for part of the quarter. NIIT completed the buyback, as you might know, of 9.875 million shares through the tender in May. Coming to the Corporate Learning Group. With industry-leading performance, the Corporate Learning Group recorded a growth of 47% year-on-year in Q1 and continues to drive improvement in performance for... [Technical Difficulty]

Ladies and gentlemen, thank you for patiently waiting. We have the management back on the conference. Over to you, sir.

Sorry. Sorry for the technical difficulties. I was just starting to talk about the Corporate Learning Group. I'll restate some of the things I may have said earlier. The revenue was INR 2,633 million, up 47% year-on-year and 12% quarter-on-quarter. In constant currency terms, the revenue was up 45% year-on-year and 11% on a quarter-on-quarter basis. EBITDA was at INR 772 million, up 148% year-on-year and 14% quarter-on-quarter. EBITDA margin was at 29%, up 1,185 basis points year-on-year and 62 basis points quarter-on-quarter. Strong sequential growth predominantly driven by an expansion in share of wallets of a number of existing customers, accelerated ramp-up of some of the new customers we acquired over the last 4 quarters and strong volumes in the North American real estate business. The company saw significant expansion in 2 existing customers, both large technology majors. The North American real estate market is seeing some normalization now, though I would say that the demand for real estate as the career continues to be higher than it was during pre-COVID times. During the quarter, NIIT added 3 new MTS customers, all in the life sciences space, 1 large pharma major; second, a large medical devices company; and third, a large health care insurer. The MTS tally now stands at 59. The revenue visibility reached INR 298 million at the end of Q1. The margins continue to remain high driven by the growth and improved leverage of fixed costs, better product mix, higher productivity and continued work from home and no travel expenses, as well as the full impact of cost optimizations achieved during the last year. So several of those optimizations have continued. We are seeing target markets for the Corporate Learning Group emerging from the COVID-19 lockdowns. As we pointed out earlier, this is likely to lead to some resumption of costs and investments that we've deferred over the last few quarters as things start opening up. In our Skills & Career business, revenue for the quarter was INR 378 million. This was up 62% year-on-year. This was down marginally quarter-on-quarter due to the impact of seasonality and some of the impact of the second wave of the pandemic, which hit the country starting early April. The StackRoute and TPaaS products continue to see strong recovery given the strong hiring sentiment in the IT segment. We see a multiyear growth cycle in demand for digital talent as businesses increase adoption of digital to service their customers globally. Our pivot to a digital delivery model last year has since been working, and we've been working on ensuring that we can help our learners achieve desired outcomes through our digital platform. We see this business as a strong EdTech platform for digital talent transformation for both individuals as well as corporations and have proven out this model over the last few quarters. As we shared in the previous call, we are accelerating investments and ramping up the consumer business in India. In Q1, we invested in strengthening the management team and expanding the product portfolio as well as made investments to make our digital platform a stronger and stickier platform. We also introduced a number of new products, including programs for 5G cloud technologies, cybersecurity, game development, data sciences and full stack engineering. As a result, the EBITDA was a negative INR 51 million during the quarter. Investments in marketing are being accelerated in Q2 so that we can take full benefit of the season as well as grow the revenue run rate for the second half of the year. Overall, NIIT has achieved significant transformation over the last 6 quarters across both of its businesses. CLG is a top 5 global managed training services player with industry leading growth, margins and return profile. The target market provides multiyear growth potential due to the large spends and low penetration of outsourcing. New business models are leading to disruption, and NIIT is well poised to take advantage from these disruptions. The Skills & Career business is transitioning to an EdTech business, engaged in servicing the rising demand for digital skills by both individuals and corporates. We believe the company has the necessary ingredients for value creation, a differentiated delivery methodology for deep skilling with proven outcomes, a strong brand, innovative business models and a strong balance sheet. We continue to believe that more companies would adopt learning outsourcing post the pandemic, as we have seen in the past. As the economies have come out of recession, they tend to outsource more. And we think that this demand will pick up as the economies and the companies come out of recession. The second, the demand for digital talent or talent that is trained on digital skills will continue to grow globally as most organizations go through the acceleration in digital transformation. From a balance sheet perspective, as I mentioned earlier, NIIT has completed its second buyback during the quarter. Our balance sheet metrics continue to be strong. Excluding the impact of buyback, the net cash position improved quarter-on-quarter by about INR 1,000 million or INR 100 crores. The DSO also improved to 52 days as of June 30 compared to 54 days as of March 31. We are continuing to pursue investment opportunities, both organically and inorganically, given the strength of the balance sheet to drive growth across different dimensions, including, but not limited to, continued expansion of our Corporate business through expansion from a geographic coverage perspective, from expansion with respect to capabilities as well as customer segments. Achieving leadership and digital talent transformation through NIIT Digital and StackRoute are also key agenda points for organic investments. We continue to pursue an inorganic strategy that could help us accelerate our growth path on the dimensions that I mentioned earlier. With that, Vijay, do you want to spend just a minute on the completion of the buyback process over this past quarter?

Yes. So as... [Technical Difficulty]

Ladies and gentlemen, we have the management back. Over to you, sir.

Yes. Once again, apologies for the disconnect. Sapnesh asked me to talk about the buyback process. I think the process has been completed successfully, absolutely on time and schedule. The buyback price was INR 240 per share. The total buyback amount was INR 237 crores. We bought back -- the company bought back 9.875 million shares, which is about 6.97% of equity. And the tendering group was there, and there was a reservation of 15% of buyback amount for small shareholders, which was also oversubscribed. And therefore, accordingly, the allocations were made. So it's been a successful process. I have nothing more to add. With this buyback, I think 68% of the free cash after the divestment has been distributed, and therefore, all future plans as and when they arise, we would be sharing with the shareholders. So I don't have anything more to add in that. Sapnesh, you may want to just open it for Q&A because we have had a couple of interruptions.

Thanks, Vijay. You're right. Let's open it up for Q&A, Margaret, and let's see if we can spend the rest of the time on Q&A.

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

Just a couple of things from my side. First of all, on the Corporate Learning side, this revenue visibility of INR 298 million. Over how many years is this -- are revenues you are looking to accrue? That is one. And secondly, on the margin side. We are now almost 29% margins even in this quarter. And we have indicated that we will increase the spending, et cetera, now going forward. So how should we look at the margins in the Corporate Learning business?

Thanks. Can you say your first question? The visibility, INR 298 million. I think the way to think about visibility is that, that's the visibility that we have for the balance of our contracts -- of the balance contracts with the 59 customers who are active. That's what we have. So it is not the next 3 years or 2 years or 1 year. It is the contract visibility that we have for the balance of the contracts for the 59 customers that you mentioned. So for example, a couple of our large customers -- contracts are coming up for renewal. And if they were to renew for 3 years, we would add 3 years' worth of contract visibility to this number on behalf of those customers. I would also add that our typical contracts tend to be between 3 to 5 years. And -- or I would say, 80% of the contracts are 3 years. The balance 20% would be 5-year contracts. And what -- you had a -- the second question was around margins for the Corporate business. The last time here, we had guided that margins will be upwards of 20%. We have said about 20% plus. I think we are staying with the guidance, but we feel that we may be able to get benefit of operating leverage because we provided for the investments already for the year. So we might get advantage of 150 basis points because of operating leverage, which would start showing up. So I would say we would retain the guidance from the past but add maybe 100, 150 basis points as benefit from operating leverage.

[Operator Instructions] The next question is from the line of Saurabh Shah from AUM Fund Advisors.

Congratulations on great set of numbers.

Thank you.

A question on the Corporate Learning Group. Sir, what places are market growing, either in terms of new requirements like legal compliance, et cetera, or in terms of higher market share because of companies outsourcing their own internal learning to players like yourselves? How fast is the market growing? And how do you see it on a faster-growing basis, which is relevant to your own product offering?

So I think the way to look at the market is by looking at the spend that most corporations do on their employees. The spend has -- had gone down in a significant way during the pandemic, but it's starting -- or it's projected to grow in the mid-single digits a on year-on-year basis. So you have to look at a very macro picture of Corporate Learning spends, they're likely to grow in the mid-single digits. But I think your follow-up question is very interesting, and that's around the propensity for these organizations to outsource. As I've said in the past that, so far, fewer than 25% of Fortune 1000 organizations have outsourced their learning in an appreciable way. So there is a lot of headroom for growth in terms of just penetration. And like I mentioned, even the 25% who have outsourced, they haven't outsourced all of it. So there is significant headroom with respect to those who have outsourced in terms of expanding what they do as well as those who have not outsourced at all. So from an overall perspective, there is very significant headroom. In the past, we've noticed that every time the economy comes out of recession, large organizations take a relook or a rethink of their strategy. And more often than not, they choose to start doing -- start focusing more on what's core to their business and look at outsourcing, what is not necessarily core to their business. I think in the learning outsourcing space, we are at a point where the IT services was about 25, 30 years ago where the penetration was not as high as you see it today. So over the next few years, I expect that the penetration will increase. Also, I think NIIT represents a specialist organization who can bring significantly high amount of value compared to generalist outsourcing organization. And I think like our customers, there will be more who will see NIIT as a specialist who can bring unique value to them, and they will choose to use NIIT as their outsourcing partner.

So just going on a little bit more. I know you will continue to add new capabilities. But based on our current offering, where do you think is the sweet spot in terms of growth? Is it a vertical? Is it a kind of offering, which is webinar or more interactive or more gamified? Where is the sweet spot currently, which is giving you the most growth, for example, a very nice probability of concluding contracts of [indiscernible]?

Yes. I think our biggest capability is to ensure that we are able to deliver against our contracts as a managed service, which really means that when an organization outsources something to us, they can rest assured that they will get equal or better performance compared to what they were achieving. And that's really what creates value. For us, it's very important to ensure that we show up as a reliable value-creating partner. That's really what's important and what's worked really, really well for us. We will, as part of our strategy, continue to add capability so that we can help organizations in the most broadest of sense and -- but I think the most important aspect about NIIT that resonates with all of our customers is the fact that they can reliably get high-quality, high-value day in and day out. And this really came into forefront during the pandemic in spite of the fact that a fairly large number of NIITians were affected by COVID. None of our customers experienced a slowdown, leave aside a shutdown. And I think that goes on to show how reliable our processes are and how our customers can trust NIIT in delivering against what they have outsourced to us.

The last question before I maybe try to come back. Is it possible that to the extent of the largest verticals or areas where the current revenues come from? I know United States and Canada was a big recent focus. But overall, on an annual basis from your pipeline of $300 million, where is the largest kind of exposure?

Some of our larger segments include energy, BFSI, technology and telecom and life sciences.

Okay. So any -- possible to get any split at all? Any -- a very high level split?

I would say, technology and energy -- technology is the top, followed by energy, followed by BFSI, followed by life sciences.

[Operator Instructions] The next question is from the line of Samarth Singh from TPF Capital.

My question was a follow-up on the statement you made, which is only 25% of Fortune 1000 companies currently outsourced. But at the same time, I think the overall market growth is in mid-single digits. So can you explain to me dichotomy on why the market is not growing at a faster rate?

Yes. I think the simplest way of thinking about it is that learning is a discretionary expense. It is an enabler to business growth, but it is one step behind business. And I think your question is really around why is it that IT is growing faster than learning. I'm making a guess that's where you're coming from. I think IT, to a great extent, runs business, whereas learning focuses on enabling business performance. And I think it's seen more as a discretionary expense, whereas IT is seen as a mandatory expense. Now as I've said in the past on such calls that what we tried to do, and I talked a little bit about a segmental focus -- or a sectoral focus, we try to focus on sectors where there is a higher proportion of mandatory training. Sectors which are highly regulated, which include energy, life sciences, BFSI or sectors where there is very high rate of change like technology and telecom.

Okay. And do we have a breakup of the percentage of revenues that fall under regulatory or mandatory in nature?

Greater than 50% of our business comes from organizations or sectors that are highly regulated.

So would it be safe to assume that greater than 50% of our revenues are regulatory in nature?

I won't say that because even the highly regulated organizations have training that is not purely compliant or regulatory driven. And it's very hard for me to tell you how much of it was regulatory versus nonregulatory, but I can say that greater than 50% of our revenues come from organizations that are highly regulated.

And the -- one of the comments in the opening statements was that digital efficiencies have led to improved profitability in the CLG group. And I think in the past conference calls, we've been hesitant to up the stake and say that these efficiencies are here to stay permanently. So I was wondering whether you did discussions with your clients, whether you've come to some conclusion on whether these digital efficiencies are here to stay permanently. And if they are, what part of that benefit will be retained by us and what part of it sort of will flow to your customers?

So I think some of these efficiencies are here to stay. I don't think we will be traveling as much as we used to, to deliver training. Also, I don't think we will deliver as much in-person training as we used to. But some of it will come back. Exactly how much of it will come back, time will tell. But in all our conversations with our customers, we are hearing that some of it will come back, but we are not sure how much. But time will tell. And that's really the reason why we are saying that we think that we can do upwards of 20% compared to the past when we were in the teens. And that's because we feel that some of the efficiencies are here to stay.

And just one last follow-up to that. So we have guided for upwards of 20%. Our quarter 1 margins are 29% for CLG. So does that imply a significant ramp-up in cost in the next 3 quarters?

I think it's a the combination. It's a combination. There are -- really, the way to think about it is there are 3 things at play here. One is that we are ramping up our own investments so that we can fuel growth, and those investments started out as we got into Q1, but they will ramp up as we go through the year. Second, like I said, some of the efficiencies will stay, but some of the expenses will go up with respect to facilities, with respect to travel as things start opening up. And third, like I had pointed out in my opening comments that the real estate market has been at a high over the last couple of quarters, and we think that some of it is starting to level off, and that will have an impact to the margins as well. So these 3 dimensions are at play as we look ahead on margins.

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

Congratulations on a very strong number. My question is pertaining to the development that we have seen in last couple of days on the EdTech sector, what's happening out in China. So of course, it's far-fetched at this point, but is there any way we see this as an opportunity in terms of how we would like to shape up this side of the business? And what are the real plan as we announce and to call it as the [indiscernible]?

So there was a little bit of disturbance on your line, but what I took away from your question was that we saw regulatory changes with respect to education or EdTech business in China. And are we likely to get affected by that? So on that, I think my answer would be direct exposure to China, probably not, because that's not -- the type of businesses that are getting regulated in China are not the ones that we participate in. Second, I think you were trying to draw a parallel to see whether something like that might happen in India or not. And really there, my view is that a lot of what's happening in China is around K-12, supplemental K-12 education, which creates a lot of stress amongst kids. And that's not a business that we are in. So I don't see a direct impact, though time will tell how these policies cross borders.

Right. So actually, the extension to the question was, what is our long-term or midterm kind of a strategy in this business in the Skill or EdTech side what we want to build?

Yes, I think in the simplest of terms, our focus, as I mentioned earlier, is learning outsourcing, which is predominantly conducted in the United States and Europe. And I don't see this move from China affecting that at all. Second, our focus in India is towards early careers, students who are about to graduate from college or who have just graduated from college and joined a corporation. That's really the market that we are focused on. And again, I don't see an impact of this regulatory change in China on what we are doing here in India.

Okay, okay. I was looking from a different context. I'll take that offline. But my another question is from -- in our Corporate Learning business, we've definitely seen a significant uptick in terms of the number of new MTS customers we've been adding. So what -- so this part of the jump from, let's say, 30, 35 customer to 59 out now has been really sharp. So from this point, let's say, we have to go to, let's say, 60 customer to, let's say, 80, 100 customers given the lower penetration on the Fortune customer, then what is the change of strategy required? Is it just like adding more salespeople? Or is there a different capability mix we need to require given that we have a high concentration on 4 sectors? So will that mean that we need to add sort of capability, some diversity of businesses as well? So any color you want to share on that?

Sure. I think you probably answered the question you asked, but let me provide you color on what our strategy is. I think from a growth perspective, there are 3 key dimensions, which we see as dimensions that can accelerate growth. The first one is geography expansion. As I've mentioned earlier in similar calls, we are looking at geographic expansions with respect to Continental Europe and Latin America. Second is capability expansion. There are a number of areas that we have identified. We won't go into what those areas are, but there are a number of areas that we have identified where our customers are open to having conversations with us as long as we have top class capability, and those are areas where we are building capability. I know for a fact that there is significant talent transformation that our customers face because of the acceleration of digital. And there are -- those are some of the areas where we are improving our capabilities. Third is market segments, and I think you alluded to that as well. There are a number of market segments such as professional services, such as aerospace, such as a number of other market segments where we have some penetration, but not a lot. And we would like to invest in business development to gain penetration in those market segments. I would remind you that about 3 years ago, we made an acquisition to get into the life sciences space. And now we have more than 10 customers in the life sciences space. So we are going to pursue both organic and inorganic activities to build on -- build capabilities on these 3 dimensions.

Right, right. And just last, if I can squeeze in. Earlier, you said about some on the profitability outlook. Sorry, I missed your comments. So if you could share in terms of how you expect the profitability in the business, CLS business, panning out over next few quarters or years? Whatever you want to share on that.

For this year, we think that compared to my earlier guidance of 20-plus percent EBITDA profitability, we are saying that there is a likelihood of us getting an additional 100 to 150 basis points of operating leverage. I think the other thing, while you didn't ask that as a question, I also wanted to say that compared to what we had said in the past, we are starting to see visibility of higher revenue growth. And I think we will be in the mid-20s to higher 20s in terms of revenue growth. And I think some of that will also start showing up on the bottom line, like I said, through operating leverage.

The next question is from the line of Saurabh Shah from AUM Fund Advisors.

Sapnesh, just to kind of sense or feel of the next 12 to 18 months. Could you give us a sense of your go-to-market strategy? I know you just mentioned looking at inorganic on the side. But from an organic basis in terms of what kind of people are you hiring, what kind of other sales efforts you are making here. And on internal side what kind of product offerings you are developing either from a vertical standpoint or changing the way you offer the methodology of access, et cetera? Can you just give us a sense of how you are doing that for the next 12 to 18 months, please?

Sure. Like I pointed out, there are really 3 dimensions in which we are looking at. The first one is geographic expansion, both from a business development perspective as well as delivery capability perspective. And the regions where we are interested in expanding our coverage include Continental Europe and Latin America. Those are regions where we have customers today, but there is significant opportunity to add new customers. The second is looking at additional sectors compared to the ones that we already have. There are a set of sectors, which include professional services companies and a number of other sectors where we currently do not have customers, but we know for a fact that there is significant spend that takes place on training. So there is sectoral expansion that we are looking at. And for that, we are bringing on people who have significant experience and specialization with respect to those sectors. The third area is, like I pointed out, answering the previous question where I expect that there is going to be significant talent transformation given the acceleration of digital, and that's an area where we can gain market share or wallet share with our existing customers if we build capabilities. And that's an area where -- so talent transformation. It is -- it has many layers of capability, but we are focused on improving our capability and strengthening our offering from a talent transformation perspective. So those would be the 3 areas over the next 18 months or so where we are likely to make investments, both organic as well as inorganic.

Also, to be a bit more granular, Sapnesh, in terms of, you say, how many people you are hiring given the language challenges, I would think in some of the geographies that you mentioned, how you expect to change that? Any partners, any other kind of structures, any hirings from potential customers? Or how are the other ways you are trying to kind of ensure faster penetration for products that is not really as essential as IT? Some more granularity if you can provide us.

Given the public nature of that call, I would hesitate to do that because not only our well-wishers, but our competitors also listen in on these transcripts. So I would say -- I would stay at the level that I've provided where we had significant investments going on in both business development as well as capability creation so that we can accelerate growth. And that would come not just from a people addition perspective, but people addition with respect to significant expertise, geography as well as capability creation or capability acquisition.

Next question, Sapnesh, was as you kind of explained and build up bigger liabilities for these learnings and other things, do you expect your gross margins to increase? I mean, a very -- what would be the variable component for you to develop new course material, new models, et cetera? Also, we look at that, are there any internal targets for reducing the variable cost on your new product offerings, et cetera?

So just to be clear, we are and have been predominantly a service business. And our gross margins have tended to be service gross margins. Now over time, we have started blending the service with significant intellectual property investments. The first significant one was in our real estate contract in Canada. We are looking at similar IP-related business models, which can create a mechanism of blending product across regions with gross margins so that we get an overall uplift.

Just a last clarification. You mentioned this real estate thing a couple of times. Is that linked to really the growth of the real estate market and the industry? Or this is something which will continue because it's a regulatory environment kind of dictated change beyond the current move period that both the U.S. and Canada are experiencing?

So this is a contract that we entered 3 years ago. 3 years ago, there wasn't a boom in real estate business, but it is to operate contract, which -- if you want to transact in real estate, you have to have a license. And NIIT became the exclusive provider of such education in the state of Ontario in Canada. So -- but as I've mentioned this time as well as in the past conference calls, there has been a significant ramp-up in interest in real estate careers, to some extent, because of the pandemic because it is a viable second career for many people. But also because the real estate market has been red hot over the last couple of quarters. And as you might know, anything that's red hot starts to cool off over time. And -- but from an overall perspective, given the regulatory and license to operate nature of contract, we continue to see -- we should continue to see reasonable demand even if it's off of its peaks that we have noticed in Q4 and Q1.

The next question is from the line of Samarth Singh from TPF Capital.

On the RECO contract, I believe it's a 5 plus 2-year contract. So what happens at the end of the period? Is the IP transfer back to a client? Or is it a rebid or what happens then?

So we normally don't get into discussing terms of our contracts with customers on conference calls. But like you pointed out, it is -- and a lot of it is client confidential, so we can't discuss it. But it is a time-bound contract, which has options for renewals.

Okay. And I'm guessing you can't give the percentage of revenues coming from this. But when we had signed up the contract, you have said that you're expecting to generate $15 million of revenue per year. So are we significantly above that? Or are we around that?

I think -- I mean I can use different words to say something that would mean that these are client confidential numbers, and we can't disclose them.

And just to get an idea of sort of the growth that we've -- the sort of addressable market in CLG. I think about a couple of years back, we were -- you have stated that we were doing -- we were seeing about 50 RFQs every year, out of which we were participating in about 40 of them, and winning 30% of those. Is it the same today? Or has that improved significantly, both in terms of the number of RFQs we see every year and how many we win?

Our win rates have improved significantly. The total number of RFPs or RFQs actually went down during the COVID year, but our win rates have improved significantly. Also, over the last year, 1.5 years, we've seen a lot of referrals where organizations have chosen to work with NIIT without actually going into an RFP process. But as organizations start coming out of COVID-related shutdowns and start focusing on their strategy for noncore work, I expect that the number of opportunities will increase.

Okay. And we had made a statement that I think this was in end of 2018, beginning 2019, that you'd expect to double our revenues every 2 -- every 3 or 4 years up, and that was on a smaller revenue base. So do we still stand by that statement? Or would we temper that down?

Yes. I think we -- in a steady state, from an organic perspective, we think that we can continue to grow at about 20% year-on-year in this Corporate business in steady state. And I think if we were to add inorganic growth possibilities, we should still be able to meet that goal.

Okay. And last question from my side. How different or similar is our Skills & Career business to Simplilearn?

I think it is significantly different, I would say, from a number of dimensions. Like I pointed out earlier on this call, we -- the focus target audience that we have is early careers, which is folks who are either about to graduate from college or were just graduated from college or who have just graduate and got a job. That's really the audience that we focus on as NIIT. On the other hand, Simplilearn focuses on a slightly different audience. They're focused predominantly on working professionals. Second, NIIT focuses on deep skilling, which is programs that go on for a fairly significant amount of time and actually transform somebody's skills such that from not being able to do something, they're actually able to do something. So you would akin NIIT's programs to say if you wanted to teach somebody how to swim. A person who did not know how to swim, we wanted to teach that person how to swim. They would spend time with us, and we would teach them how to swim actually quite well. Compared to that, I think Simplilearn's programs are focused on upgrading a working professional's skills. The person -- so for example, a person knows how to use Oracle 10, and now Oracle 11 has showed up. So you will learn how to use Oracle 11. So these are programs for working professionals to upgrade their skills. NIIT programs tend to be deep skilling programs that transform a person's ability to do a job. Did that help?

Yes, very helpful.

The next question is from the line of Shradha Agrawal from Amsec.

Congratulations on a good quarter.

Thank you.

A couple of questions. How should we look at the revenue growth between CLG? Despite a very strong start, we are still maintaining our guidance of mid- to high-teens growth in CLG. So that would effectively mean that we are talking of a material deceleration in revenue growth starting to pull off. I mean we are also -- you kind of indicated that we had seen volume compression in existing accounts, and some normalization of that spend have started to happen. So given that past, how do we look at revenue growth trajectory on a Q-on-Q basis for us?

Sure. So let me just say or repeat what I just said a minute earlier. We think that the corporate learning businesses, growth forecast or growth guidance, we are upping it from mid- to high teens to low to mid -- I'm sorry, mid- to high 20s. So we are upping the guidance in a significant way for the Corporate business given the strong performance in Q1 as well as some of the visibility that we have to new customer additions and expansions.

I understand. So in terms of -- so are we expecting sequential growth in all the 3 remaining quarters of the year?

We should get marginal sequential growth over the next couple of quarters.

And this is despite volumes in RECO deal coming up?

Say that again. I'm not able to hear you very well.

No, I'm saying this is despite volumes in the RECO deal coming down?

Yes. That's why I said that while we'll see some pull off or some leveling off in terms of volumes in the North America retail business, but because of the new customers and the expansions that we've had, we think that we'll see some marginal improvement in revenue from a quarter-on-quarter perspective.

That's very helpful. And how should we look at the growth trajectory in Skills & Career business?

The Skills & Career business for the year should show robust growth. We expect that the growth will be upwards of 40%.

That's on a low base. But on a sustainable -- more sustainable basis over medium term, how should we build the growth rate in SNC?

I think that business is going to continue to be a high growth business for the near term to midterm given, a, the low base; and b, the investments that we are making.

The 20%-plus, is that the level expectation for SNC to grow in the medium term?

Yes.

Sure. And sir, I think I missed out on the net cash number. Could you help me with that number?

Net cash for this quarter, this past quarter, right?

At the end of 1Q, yes. Yes.

INR 11,719 million.

11,719?

11,719, yes. INR 11,719 million. That's right. And this is post buyback.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you. I think we've had an interesting discussion. Thank you very much for joining us. We apologize for the few interruptions that happened. But I can see that most of the questions were answered well by Sapnesh. If there are any follow-up questions or issues, please do not hesitate to reach out to Kapil Saurabh at Investor Relations, and he will be very happy to connect you with any part of the organization that you would like to get your questions answered from. So as usual, we thank you for being here with us. Your presence means a lot to us. And we always learn more from such interactions, and we look forward to your continued guidance, support and cooperation. Thank you.