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NIIT Technologies Ltd ....management conference call update




IndiaNivesh Securities Pvt Ltd


17 Mar 2013





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 Concall Update NIIT Technologies Ltd ....management conference call update | We initiated coverage on NIIT Technologies Ltd on 20th June 2012. After our initiation stock touched 52 week high of Rs.325, yielded a return of 12%; however did not reach our TP of Rs.345. Despite the strong fundamentals, in-line quarterly performance and steady fresh order intake stock price had seen a significant correction in recent past. Hence, to get the understanding on business dynamics and future prospects, we organised conference call with management. Valuation & Outlook: At the CMP of Rs.278, the stock is trading at 7.5x FY13E and 6.5x FY14E earnings estimates, which is at 36%/38% discount relative to 10.0x/9.0x – mid cap IT companies average. We like the company’s current quarter performance aided by sizeable fresh order intake and strong 12M executable order book. In addition, company is also seeing a good traction in winning large size deals (in Travel & Transport and Government). However, the key trigger for re-rating would be margin and revenue performance. We believe strong traction in key verticals and demand recovery in GIS and ROOM could lead to margin expansion from here on. We maintain our BUY rating with the target price of Rs.345 (valuing at 8.2x FY14E) on NIIT Tech.

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