Hold NIIT Technologies; target of Rs 400: Emkay

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Emkay's report on NIIT Technologies

NIIT Tech's Mar’15 quarter revenues at Rs 6,112mn (up 2.7% QoQ and 3.9% YoY) were ahead of our estimate of Rs 5,836mn

EBITDA at Rs 997mn (+%15.7 QoQ, +11.9 %YoY) was aided by operating margin improvement up 180 bps QoQ Vs our estimates of ~60bps decline. EBITDA margin improvement was largely on account of 165bps improvement in gross margin and ~25bps decline in SG&A expenses on sequential basis

Company reported net loss of Rs175mn as it took charge for one time dispute settlement cost of Rs800mn. Company announced dividend of Rs9 per share (payout ~47%) and won orders worth US$89mn taking total order book to US$ 295 mn (+1.7% YoY)

"We believe that strong operating performance in Mar’15 quarter to lead to positive price momentum for NIIT Tech in near term. We will revisit our earnings estimates post company’s Analyst Meet this week. We have HOLD recommendation with TP of Rs 400", says Emkay Global Financial Services research report.

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