NIIT, interesting bet: Vinay Khattar

Vinay Khattar, Associate Director & Head of Research at Edelweiss Financial Services told CNBC-TV18, "NIIT is a company which is into training on the IT side. That was its previous model and the company had struggled, it had put a lot of money into training in schools, tied up with government and put in a lot of capital expenditure (capex). That lead to lot of issues and a lot of challenges came in. Payments were not made on time, the ability to impart training was impacted and so on and so forth. So, it suffered a lot on multiple front.""Ever since the new management come in about a year or so ago lot of new changes have happened. In the last couple of years what they have done is they have started focussing on vertical specialised training. So, especially in case of oil and gas and BFSI segments they have picked up certain key areas in which they can provide very high end training which is an exclusive domain of just few companies globally. That is a vertical which is seeing significant expansion, you are seeing very good margins and our sense is that vertical can grow rapidly over the next two to four years," he said."On top of it if you have your purer businesses which were your school training businesses and all which are coming under control, losses are coming under control, you are looking at margin expansions happening from there. A lot of course streamlining has happened. So, they had almost 150-160 kind of courses which have been brought down to just about 60-70 courses which they are offering. So, lot of streamlining are happening which is impacting the bottomline," he added."So, our sense is the company could grow very well over coming two-four years. Right now the valuations may look rich but since there is a change and turnaround in the business model this could be a very interesting bet with a two to three year perspective."