2026-07-11 22:10:26
Latest Post
NTPC board approves investment in Lara Super Thermal Power Project
Fabtech Cleanrooms Ltd - Business Update for June 2026
Hariom Power and Energy Pvt Ltd commissions 5 MW AC Solar PV Power Project
The Monarch Surveyors and Engineering Consultants Ltd receives order worth Rs. 2.61 crore
Veerhealth Care Limited receives order worth Rs. 1.11 crore
Research
Buy NIIT Technologies - Dolat Capital
Posted On : 2013-03-12 05:37:33( TIMEZONE : IST )
Deal momentum picking up: NIIT Tech is witnessing incremental traction for large deals across geographies and verticals. Travel & Transportation seems most robust among all and banking weakest of all. Insurance/reinsurance business is reviving with incremental acceptance of its latest offering – ipf3 (average license ticket size if over USD 10mn), and may see reversal in trend by Q1FY14.
GIS pains coming off: The biggest margin dragger for NIIT Tech has been the GIS business that went into losses in Q3 (-7% operating margin). Q4 has traditionally been the best quarter for the segment and would see strong revenues and margin recovery, as it has concluded the cost overrun project during the quarter. The recovery in GIS would also support margin gains gradually in Q4FY13 and Q1FY14.
Solace in Visibility: NIIT Tech has been able to steadily add new order intakes quarter after quarter (USD 712mn over last 7 quarters) giving strong visibility comfort. It is close to conclude two large deals in current quarter which would help it maintain the USD 100mn+ quarterly order intake run rate. Currently, it has total 12M executable order book of about USD 242mn. We expect 18%+ growth in topline/ PAT for FY13-FY15E.
Profitability likely to go up: NIIT Tech has witnessed 70bps OPM decline in 9MFY13 on account of weak GIS profitability, decline in NITL revenues and certain onetime transition cost on Morris deal. We believe OPM trend would pick up as GIS overrun concludes, NITL revenues get better and cost items normalizes. We have built in 60bps gains in OPM at 14% over Q4FY13-Q4FY15.
Valuation: NIIT Tech has been one of the best performing mid cap companies in FY12 both on financial as well as stock returns but is still available at attractive valuations of 6x on its FY15E earnings of ` 48 per share. We remain positive on the stock in view of sustained improvement on operating metrics and strong business visibility amidst uncertainty with a TP of ` 385 valued at 8x of its FY15E earnings.
