Buy NIIT Technologies; target of Rs 440: PLilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher`s research report on NIIT Technologies“NIIT Technologies (NIIT Tech) Q2FY15 performance was ahead of PLe/Consensus’ expectation. The company reported order intake of $103m (22.6% YoY), with order executable improving marginally by 1% QoQ to $298m. We expect challenges to persist in near term. We retain our ‘BUY’ rating.” “NIIT Tech reported a revenue growth of 0.7% QoQ to US$97.2m (PLe: US$97.0m, Cons.: US$96.0m) and by 1.9% QoQ in INR terms to Rs5,883m (PLe: Rs5,867m, Cons: Rs5,805m). However, international revenue grew by 5.6% QoQ and India government business declined by 52% QoQ weighing down on RoW revenue. EBITDA margins expanded by 55bps to 14.0% (PLe: 13.6%, Cons.: 13.5%), due to rupee depreciation, lower hardware revenue and productivity gain. EPS declined by 7.6% QoQ to Rs6.6 (PLe: Rs7.5, Cons.: Rs7.8) due to higher depreciation charge (AAOC project live) and lower other income stemming from forex losses. Fresh Order intake for NIIT Tech was $103m (5yr avg.: $109m) driven by four wins in the USA and one in India, leading to a 23% YoY growth. The order executable over the next 12 months grew by 20.2% YoY to $298m. The company bagged 1 large deal ($25mn+) inline expectation to close at least one large deal each quarter. According to the management, there will be acceleration in revenue momentum in Q4FY15 on account of large deal ramp‐ups (currently undergoing transition phase) and new deal ramp‐ups. The management expects momentum to get stronger in FY16.” “The management reiterated their focus on ‘Travel, Transportation & Logistic’ vertical along with an eye on IMS service line. They continue to withdraw from Indian government project and increase their resource allocation for the US market. The clients’ specific issues persist in Q3FY15. But, turnaround in CY15 in growth momentum drives our continued optimism. We expect stock to remain under pressure in the near term. But, we are factoring in improved revenue momentum in H2FY15 along with margin uptick. Retain our “BUY” rating on the stock with a target price of Rs 440,” says Prabhudas Lilladher research report.   

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