Buy NIIT Technologies; target of Rs 332: Nirmal Bang

Nirmal Bang is bullish on NIIT Technologies and has recommended buy rating on the stock with a target of Rs 332 in its January 2013 research report.

“NIIT Technologies (NIIT Tech) reported a net profit of Rs.56 crore in Q3FY’13 compared to Rs.43.1 crore during Q2FY’13. Net Sales for the quarter stood at Rs.514.4 crore, registering an increase of 2.8 per cent q-o-q. Order intake during the quarter stood at USD 82 million taking the total executable order book to USD240+ million over the next 12 months.”

“Operating margins for the quarter stood at 15.8 per cent. The reasons for the weakness in margins were the JV with Morris, among others. Some short-term issues impacted the margins. There was also marginal decline in the GIS and NITL business. The company had secured a large contract in Morris. Both these are transitionary and should come back on growth trajectory in the beginning of the next financial year. The company secured fresh orders worth USD83 million during the quarter. The company added four new clients during the quarter. This includes USD10 million plus client. New orders executable over the next 12 months stand at USD242 million. The company has won a large contract in India which includes computerisation of the stamps department.” 

“We expect the company to post net sales of Rs.2012.3 crore for FY’13E. The net profit for FY’13E is expected to be Rs.204 crore, translating into an EPS of Rs.34.3. We expect the company to post net sales of Rs.2210 crore and PAT of Rs.234 crore for FY’14E, translating into an EPS of Rs.39. We value the company at 8.5x FY’14E EPS of Rs.39 to arrive at a price target of Rs.332 over the next 9 months,” says Nirmal Bang research report.

Non-Institutions holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment