October 20, 2016 / 16:50 IST
Religare's research report on NIIT Technologies
NITEC posted in-line Q2FY17 results with revenues of Rs 6.9bn (+3.5% QoQ CC) and EBIT margins at 11.9% (RCMLe: 12.4%). Importantly, fresh order intake was solid at US$ 143mn which provides revenue visibility and should help drive margins. Management expects Q3 to be slower than Q2, but H2 to be better than H1. While higher tax rates primarily drive our FY17/FY18 EPS cuts of 13%/9%, NITEC is cheap at 14% FCF yield and 8x FY18E earnings. We revise our Sep’17 TP down to Rs 530 (from Rs 550) and maintain BUY.
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