Dolat Capital Market has given Buy recommendation for NIIT with a target price of Rs. 220 in its research report issued on Feb 05, 2021
Dolat Capital Market’s research report on NIIT
NIIT reported strong results with 15.8% QoQ growth in INR revenue (DE: 2.0%) led by stellar sequential growth 12% in CLS (added 3 new MTS client, 1 renewal) and 45.1% in S&C (improved International volumes). EBIT Margin further improved by 380bps to 13.3% (DE 10.4%) on improved utilization, better product mix in CLS Biz (EBITDA: 23%, up 253bps QoQ), positive operating leverage in SNC Biz (EBITDA: -8.1% against LQ -22%). Loss from Schools stood at Rs 47mn (up 16.3% QoQ). Outlook for CLS Biz (86% of Rev) remains positive as it added 3 new clients (one each in ENU, Telecomm, Life Science) driving up its Revenue visibility by 4.2% QoQ to $270mn. NIIT expects steady improvement in SNC Biz as domestic hiring improves (both in Banking and IT).
NIIT has displayed spectacular transformation by moving its delivery to Digital mode that ensured revenue stability, better realisations and helped it take a structural leap on OPM. We Maintain our Buy rating with TP of Rs 220, valued at 15x FY23E.