Hold NIIT Technologies; target of Rs 520: ICICI Direct

ICICI Direct's research report on NIIT Technologies

NTL’s US$ revenues increased 7.4% QoQ to $110.3 million above our expectation of $107.7 million owing to robust growth in US and GIS business. Growth was broad-based driven by insurance and BFS verticals while among geography, Rest of world and US led. The management expects good traction in BFSI, going ahead, while it anticipates softness in travel & transportation business owing to certain client specific issues.

Outlook

However, sustenance of an improving margin trajectory is to be watched out for. Hence, we now expect its rupee revenue, PAT to grow at a CAGR of 7.4%, 9.9% respectively, in FY17-19E. We roll over valuation to FY19E and value NTL at Rs 520/share (at 10x its FY19E EPS).