Accumulate NIIT Technologies Ltd - Motilal Oswal

NIIT Technologies (NITEC IN; Mkt Cap USD 270m, CMP 210, Accumulate)

Revenue grew by 31%/-7% yoy/qoq & PAT grew by 38%/11% yoy/qoq. Adjusted for BSF hardware purchases the revenue grew by ~24%/5.5% yoy/qoq.

EBIDTA margins (ex-BSF hardware purchase) remained static qoq.

New order bookings decreased to $50mn as compared to $60mn in Q2FY11 and $57mn in Q3FY10 due to slippage of an order booking to January.

BSF hardware purchase has largely got over after Q3FY11. Total hardware purchase for the project is expected to be around Rs.120 crore out of which around Rs.114 crore worth of purchase is over during 9MFY11. The implementation revenue is accruing and will continue to accrue after Q3FY11. The total contract size for BSF contract stands at around Rs.228 crore including hardware.

Total revenue likely to slow down in Q4FY11 and also in FY12 since BSF hardware purchase will get over. Net profit too likely to remain largely static during FY12E because of increase in tax rates.

Source : Equity Bulls

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