NIIT Tech reported revenues at Rs 4.7 bn (+5.9% QoQ), in line with
estimates however margins at 16% , down ~80 bps QoQ missed expectations
impacted adversely primarily by wage increments. Profits at Rs 576 mn
(+25% QoQ) beat estimates essentially aided by forex gains despite
higher than expected tax rates at 29.8%. Headcount addition was a tad
somber after strong additions in the recent qtrs with co adding only ~82
people in the current qtr. Order wins during the qtr were flat QoQ at
US$ 80 mn with order book executable over 12 months also remaining flat
sequentially at US$ 240 mn.”
“NIIT Tech remains confident of growth from the Travel Segment (40% of
revenues in June’12 qtr, grew by 60%+ in FY12) driven by recent wins
from the segment, however is seeing some delays within both European and
US financial services clients. That said, NIIT Tech has benefited from a
vendor consolidation exercise at an existing Financial Services client
wherein NIIT Tech was able to displace a Tier I competition which should
help growth from the segment through FY13 and FY14.”
“While we moderate our US$ revenue estimates and now build in a 14% US$ revenue growth for FY13 (note that NIIT Tech’s US$ revenue est get impacted adversely much higher than peers because of higher non US$ currency exposure), our FY13/14E earnings are tweaked lower by 4%/0.7% each to Rs 37.5/41 respectively. We continue to retain ACCUMULATE on NIIT Tech with an unchanged TP of Rs 340 on inexpensive valuations at ~7.6x/7x FY13/14E P/E for 20%+ ROE’s and ~3% dividend yield.
SOURCE :EMKEY
Key financials
| (Rs.in Crs.) |
| Year end | Mar 12 | Mar 11 | Mar 10 | Mar 09 | Mar 08 | ||
| Net sales | 827.46 | 729.28 | 493.58 | 502.07 | 444.71 | ||
| Operating profit | 191.71 | 158.40 | 125.78 | 128.47 | 173.69 | ||
| Net profit | 113.13 | 123.25 | 95.09 | 88.50 | 143.10 | ||
| Equity cap pd | 59.63 | 59.25 | 58.79 | 58.73 | 58.70 |
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