Buy NIIT Technologies; target of Rs 360: PLilladher

Prabhudas Lilladher`s research report on NIIT Technologies

"NIIT Technologies (NIIT Tech) reported revenues/margin above PLe/Consensus expectation. Moreover, margins recovered due to improvement in GIS business. Improving revenue outlook in the Travel & Transportation space (IATA revised its growth commentary upwards), ramp-up in government deals and better order intake restores our confidence in their revenue growth & margin profile. We retain our ‘BUY. rating with target price of Rs360." “NIIT Tech reported revenue growth of 4.4 percent QoQ (3.3 percent @cc) to Rs5,372m (PLe: Rs5,281m, Cons: Rs5,362m). EBITDA margins expanded by 65bps to 16.5 percent (PLe: 16 percent, Cons: 16.4 percent), due to the recovery in the GIS business. However, PAT growth for Q4FY13 was flattish QoQ at Rs566m (PLe: Rs5554m, Cons: Rs515m) due to losses in other income (Rs31m, due to revaluation of foreign currency assets & liabilities). Order book for the company has grown by 32 percent QoQ to US$110m. The current order book does not include few of the deal wins that the company had over the last 1.5 months (TCV – AAI: Rs3.44bn, AP govt.: Rs1.89bn). We expect the order book to get stronger in Q1FY14. Moreover, the management remains confident about retaining margins.” “Positive IATA commentary, project ramp-up in government projects and stability in GIS would give revenue growth with stable margin. It is currently trading at 6.3x FY14E earnings estimates with an EPS CAGR of 15 percent (FY13-15E),” says Prabhudas Lilladher research report.    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.

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