NIIT Technologies (BUY) - Quarterly estimates - ICICISecurities

- Expect Q1FY14 USD revenue growth at 1.2% QoQ to USD100.4mn with ~60bps cross currency impact QoQ. GIS revenues are expected to dip QoQ.

- Expect EBITDA margin to decline 190bps QoQ on wage hikes (~250bps impact QoQ) with limited benefit from currency. Realised Re/$ depreciation is just 1.4% QoQ for NIIT Tech as it uses month beginning rate to realise revenues and therefore the benefit of rupee depreciation against US$ in the latter half of Q1FY14 will accrue to NIIT Tech in Q2 and not in Q1.

- New order intake should be healthy in Q1FY14 as well where we expect NIIT Tech to breach the US$100mn order intake again as the company won US$64mn worth of business from Airports Authority of India (AAI) during Q1FY!4.

- Expect PAT to decline just 1.7% QoQ, despite a significant (~9% QoQ) fall in EBITDA, on account of forex gains that NIIT Tech is expected to make to the tune of Rs10mn (as against Rs59mn loss in Q4FY13).

- Key factors to watch: i) Commentary on large-deal pipeline and wins; ii) NIIT Insurance (ROOM) outlook, iii) margin outlook, capex and DSO and iv) ramp-up of recently won large deals.

Source : Equity Bulls

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