Prabhudas Lilladher's research report on NIIT Technologies
NITEC posted strong USD revenues growth of +2.3% QoQ (+12.2% YoY) to $154.8mn higher than our estimates (Ple: USD149.1.mn, Cons: USD 150mn). EBIT margin remained flat at 14% (+13bps QoQ) (Ple: 13.5%, Cons: 13.7%). Revenue & margin performance was better than we estimated. Strongest Commentary among the peers- management expects single digit decline in Q1, growth in Q2 & YoY growth in FY21E. Constant currency revenue growth despite COVID crisis.
Outlook
We upgrade NIIT Tech to Buy from HOLD on account strong commentary, better deal wins despite COVID crisis. Stock trades at attractive valuation of 12.4X earnings which is 20%/12% discount to peers MTCL/LTI. We value now NIIT Tech at 14x (earlier:12X) to arrive at a TP of Rs.1340 (earlier: Rs.1029).
Note: The earlier version of the report from Prabhudas Lilladher had an error. Prabhudas Lilladher has issued a correction which has been updated in the copy.
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