Result Update: NIIT Technologies Ltd - ACCUMULATE - TP Rs.798 - Kotak

NIITT revenue grew by 1.7% QoQ in USD Terms to USD 116.7mn (USD 115.2mn adj for forex gains) and was above our estimates of USD 114mn, despite seasonal weakness and ramp down of Morris. EBIDTA margins at 17.1% and was above our estimate of 16.6%,this was a function of growth in Digital and NITL .Management guided for strong revenue growth in 4Q as well as margin expansion, aided by strong deal momentum. NIIT Tech continues to win USD100mn+ deal during the quarter, 12 month executable order increasing to USD 329mn after having stagnated at USD320mn. Growth was seen across verticals except Manufacturing which was impacted due to customer specific issues. Contribution from Digital segment increased to 25% of overall business, having grown by 11% sequentially. With continues outperformance and optimistic outlook for 4Q and beyond we upgrade to ACCUMULATE (REDUCE earlier). Our target price of Rs.798 (earlier Rs.620) discounts FY20 earnings by 13x. Our FY18/FY19 & FY20 earnings stand at Rs.44.7/Rs.52.2 & Rs.61.4 per share respectively

Shares of NIIT TECHNOLOGIES LTD. was last trading in BSE at Rs.915.3 as compared to the previous close of Rs. 861.7. The total number of shares traded during the day was 363854 in over 12352 trades.

The stock hit an intraday high of Rs. 927.4 and intraday low of 849.25. The net turnover during the day was Rs. 326323910.

Source : Equity Bulls

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