Accumulate NIIT Technologies; buy Oberoi Realty: Emkay

Emkay's research report on NIIT Technologies and Oberoi Realty

NIIT Technologies
Soft quarter, inexpensive valuations help keep the faith

• NIIT Tech reported a 0.9 percent QoQ INR terms revenue growth (flat in constant currency terms) with margins declining by ~200 bps sequentially to 14.4 percent impacted by wage hikes
• Profits at Rs 532 mn (-6 percent QoQ) lower than est on a/c of operational miss and higher than expected taxes. Order intake decent aided by recent wins in Public Services space
• DSO up 16 days QoQ to 98 days on a/c of India business execution. Management indicates improvement in margins ahead
• Moderate our FY14/15E EPS by 4/1 percent to Rs 40/41. Retain ACCUMULATE, TP unchanged at Rs 325 albeit an improvement in margins needs to preclude stock upsides

Oberoi Realty
Cut in estimates, Upgrade in Rating

• Sales booking was a huge miss in Q1FY14, down 42 percent on like-to-like comparison. Mgmt. underplays the same. We cut our sales booking estimates for FY14 citing slowdown
• Launch of new phase at Goregaon (E) and Mulund (post MoEF clearance) planned in H2FY14. Oasis launch is planned post hotel operator tie-up in Q2. In all ~3msf launches in FY14
• Cash balance was down by Rs 2bn QoQ mainly due to –ve OCF of Rs 1.2bn.  Collections from residential projects stood at Rs 1.2bn vs. Rs 2.3bn QoQ
• We cut TP by 20 percent to Rs 270, upgrading the rating to Buy due to recent steep correction. At CMP, the stock is factoring a 20 percent correction in RE prices which is not foreseeable.

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.

Read More