Buy NIIT Tech; target of Rs 330: PINC Research

PINC Research is bullish on NIIT Technologies and has recommended buy rating on the stock with a target of Rs 330 in its May 7, 2012 research report.

“NIIT Technologies, for Q4FY12, USD revenues grew 3.5%QoQ to USD88.4mn in-line with our estimates. INR revenues grew 2.4%QoQ to 4,435mn. EBITDA margin declined 124bpsQoQ to 16.8%. PAT for the quarter declined by 28%QoQ to Rs461mn dragged down by higher forex losses. EPS for Q4FY12 was Rs7.76. For FY2012, INR revenues grew 27.9%YoY to Rs15,765mn. PAT and Diluted EPS for FY12 was Rs1,972mn and Rs33.2 respectively. NIIT Tech had a healthy order book addition of USD92mn during Q4 resulting in order book of USD243mn executable over the next 12 months. The company has declared a final dividend of Rs8/share.”
“America (37% revenue contribution) increased 2.4%QoQ, EMEA (37% revenue contribution) declined 2.8%QoQ, APAC (13% revenue contribution) increased 2.4%QoQ and India (13% revenue contribution) grew 21% QoQ. Transport (39% revenue contribution) drives growth with 5.1%QoQ. While BFS (13% revenue contribution) grew 2.4%QoQ, Insurance (21% revenue contribution) remains weak with 6.5%QoQ decline due to decline in ROOM’s revenue. Managed Services and System Integration & Package Implementation indicate strong momentum with 11%QoQ and 31.7%QoQ growth respectively. While ADM remains flat with 0.8%QoQ, IP assets decline 13.3%QoQ.”
“The company had 355 net additions in billable personnel. Attrition rate softens 40bpsQoQ and 540bpsYoY to 12.1%. Utilisation rate declines marginally by 120bpsQoQ to 79%. We maintain ‘BUY’ recommendation on the stock with a target price of Rs330 based on PER multiple of 8x on 18 months forward earnings,” says PINC Research report.  Institutional holding more than 40% 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

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