Buy NIIT Learning Systems; target of Rs 550: Sharekhan

Sharekhan's research report on NIIT Learning Systems

Reported revenue stood at Rs. 419 crore, up 5%q-o-q / 7% y-o-y in CC, missing our estimate of Rs. 410 crore. EBITDA margins fell ~15 bps q-o-q/115 bps y-o-y to 21.9% and was below our estimates of 22.9%. Revenue visibility improved to $391 million versus $368 million in Q2FY25. Management reiterated its revenue growth guidance of over 7% in CC terms and EBITDA margin at the higher end of 22-24% for FY25.

Outlook

We maintain BUY with a revised PT of Rs. 550 (valued at 22x its FY27E EPS). At CMP, the stock trades at 25x/22.5x/18.6x its FY25/26/27E EPS.