NIIT Technologies Ltd. - On the improvement trail - Emkay

Reco: ACCUMULATE
CMP: Rs 389
Target Price: Rs 450

- Dec'13 qtr revenues were tad short on expectations, margins improved by ~120 bps QoQ to 16.3% for the 2nd quarter in a row aided by lower Hardware/India business

- Strong order intake during the quarter (US$ 377 mn) led by the largest renewal TCV deal for the company. DSO improved to 96 days led by business mix improvement

- Company continues to emphasis on targeting better revenue mix (greater share of International business) and thus we see an improving margin trajectory ahead

- Raise FY15E EPS by ~5% to Rs 45. Introduce FY16E EPS at ~Rs 50.2. Valuations remain inexpensive given improvement in financial performance ahead. ACCUMULATE, TP Rs 450.

Source : Equity Bulls

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