NIIT Learning Systems: Navigating Growth with AI and Strategic Acquisitions in Q2 FY26

NIIT Learning Systems Limited, a prominent player in managed learning services, has reported a robust performance for the second quarter of Fiscal Year 2026 (Q2 FY26), demonstrating resilience and strategic foresight amidst a volatile global economic landscape. The company's consolidated revenue surged to INR 475.7 crore, marking an impressive 20% year-on-year growth and a 5% sequential increase. In constant currency terms, revenue grew by 15% year-on-year and 3% quarter-on-quarter. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at INR 96.6 crore, reflecting a 3% year-on-year and 2% quarter-on-quarter rise, with an EBITDA margin of 20%. Profit After Tax (PAT) for the quarter was INR 47 crore.

Strategic Expansion and Sectoral Performance

The quarter's performance was significantly bolstered by strategic initiatives, most notably the acquisition of a 100% stake in the MST Group in Germany in July 2025. This acquisition immediately added seven new Managed Training Services (MTS) clients, expanding NIIT's client tally to 104 and strengthening its presence in the DACH region and the industrial vertical. The integration of MST is expected to enhance NIIT's capabilities in new geographies and verticals, leveraging MST's local agility with NIIT's global scale and AI-enabled solutions.

Sector-wise, the revenue mix for Q2 FY26 showcased a diversified portfolio. Technology & Telecom (split into two segments on the chart) collectively contributed a significant portion, alongside strong showings from Life Sciences and Healthcare, and Energy & Commodities. The company noted continued growth in technology and telecom, driven by new client additions and ramping up. In life sciences, NIIT has gained significant traction, serving a substantial number of top pharma companies.

The AI-First Advantage and Future Outlook

A significant highlight of the quarter was the growing contribution of AI-enabled revenues, which now account for approximately 10% of the total revenue. NIIT has positioned itself as a leader in AI for learning, with its AI-first offerings driving faster time to proficiency and predictable outcomes at scale. Management anticipates rapid growth in this segment, viewing it as a multi-year growth opportunity. The company is making disproportionate investments in AI, consulting, advisory services, sales, and marketing to capitalize on this trend.

Despite the positive momentum, the company acknowledges ongoing global economic volatility, which continues to prolong decision cycles for large initiatives and increase scrutiny on discretionary budgets. However, NIIT views this uncertainty as an opportunity, as cost pressures often drive clients towards outsourcing. The company's ability to expand wallet share with existing clients and its strong delivery excellence remain key growth drivers.

For Q3 FY26, NIIT expects constant currency growth to be between 2% to 3% quarter-on-quarter. The full-year FY26 constant currency growth guidance is maintained at 12.5% to 13% year-on-year, with organic growth projected at over 10%. Full-year and Q3 EBITDA margins are expected to be in the 20% to 21% range. The company's balance sheet remains strong, with Days Sales Outstanding (DSOs) at 66 days and net cash at INR 591.7 crore, reflecting disciplined financial management.

Sustained Growth Through Innovation and Discipline

NIIT Learning Systems Limited's Q2 FY26 performance underscores its strategic clarity and disciplined execution. By integrating key acquisitions like MST Group and aggressively pursuing an AI-first strategy, the company is not only navigating current market challenges but also positioning itself for sustained long-term growth. The focus on enhancing client value through AI-enabled solutions and expanding its global footprint highlights a forward-looking approach, reinforcing investor confidence in its trajectory.