NITEC’s Q1FY18 CC revenue growth of 1.4% q-o-q, excluding one-time revenue gains in Q4, was largely in line with our estimate of +1.3%. RuleTek acquisition contributed ~0.5% QoQ CC (one-month impact), adjusted for which, the performance was marginally below our estimate. EBITDA margin shrunk 200bp q-o-q to 15.6%, in line with our estimate of 15.8%, but with better quality, higher GPM offset by higher SGA. Net income for the quarter increased 64% y-o-y to Rs 513m, below our estimate of Rs 587m, due to tax on dividend income from foreign subsidiaries. BFSI grew 1.7% q-o-q CC, while Manufacturing & Others grew 4.3% q-o-q CC. Transportation, however, was a drag -0.8% q-o-q CC. Total order intake during the quarter was $ 110m, in the narrow band of recent quarters. Digital revenues constitute ~21% of the business. Despite ~$2m impact from client ramp-down in Q2, NITEC expects its revenue growth to accelerate, with the push coming from Digital segments and improvement in NITL. Even EBITDA margin should start inching from 15.6% and exit the year at ~18%, led by business mix and improvement in GIS for the remainder of the year. Following the positive commentary and stabilising segments, our earnings estimates are up by ~3% for FY18/FY19. We expect revenue CAGR of 7.2% and earnings CAGR of 13% over FY17-19. The company’s investments in tuck-in Digital capabilities can potentially drive better growth, going forward. We continue to watch out for more definitive signs of the same. The stock trades at 11x FY19E earnings. Expansion of valuation multiple will be a function of improved revenue growth. Our price target of `540 discounts FY19E earnings by 11x.