NIIT Technologies share price jumps 15% on healthy March quarter earnings, declares interim dividend

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Updated: May 6, 2020 12:41:10 PM

NIIT Technologies share price surged 15% on the stock market after the company posted a strong January-March quarter result on Tuesday.

 

sensex and nifty performance April, stock market top gainers in April, investors wealth rose by 16 lakh crore rs in April during lockdown, RIL, Maruti, HCL, hero motocorp, sunpharma, HDFC, ICICI BankDeal pipeline for NIIT Technologies looks robust in the first quarter as well with many negotiations in advanced stages.

NIIT Technologies’ share price surged 15% on the stock market after the company posted a strong January-March quarter result on Tuesday. NIIT Technologies posted a strong 15.5% EBITDA growth on-year basis and a 12% revenue growth in the same time period. Revenue billing loss on account of supply side issues driven by the coronavirus pandemic in the March quarter was negligible as the company made a seamless transition to work from home. Deal pipeline for NIIT Technologies looks robust in the first quarter as well with many negotiations in advanced stages. The stock was trading at Rs 1.367 per share.

“NIIT Technologies signed 41 new logos in FY20 with total new logos signed over the past 8 quarters also being very strong at 81,” noted ICICI Securities as the brokerage upgraded the scrip to an ADD rating from Reduce and upped the target price to Rs 1,800 apiece. “Overall order intake was $180mn reflecting a book-to-bill ratio of 1.16x with contribution from USA and Europe being $81mn and $52mn respectively.” NIIT’s executable order book of 12 months saw a 20% surge on-year basis to touch $468 million.

 The vertical where NIIT Technologies showed signs of weakness was the Airlines segment. “NITEC has seen project cancellations within the Airlines sub-segment in Q4FY20 itself and expects cancellations to worsen in the segment in Q1FY21. Airlines represented 46% of Travel, Transportation & Hospitality revenues in Q4FY20, which in turn represented 27% of overall revenues,” ICICI Securities noted. The brokerage said that NIIT was not expecting to see any change in deal ramp from any other verticals especially the banking and financial services and insurance sector. 

NIIT Technologies is expecting to ramp up its revenues in the second quarter of this fiscal aided by the 7 mega deals the company signed in the last two quarters. As revenue growth is expected to be positive this fiscal, valuations are now more reasonable at 14.5x FY22E EPS. NIIT Technologies has also announced a third interim dividend of Rs 11 per equity share. The record date for the dividend will be May 15. Domestic equity markets were on a volatile path yet again on wednesday. S&P BSE Sensex was up 1.22% at 31,837 points , while the 50-stock Nifty was up 111 points at 9,300 level. 

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