INSUBCONTINENT EXCLUSIVE:
Elara Capital has a buy call on NIIT Technologies with a target price of Rs 1,410.
The current market price of NIIT Technologies is Rs
1,134.20.
Time period given by brokerage is one year when NIIT Technologies price can reach defined target
Investment rationale by brokeragePlaying David- beats bigger peers in $ 10mn+ client adds: NIIT Technologies (NITEC IN) added two $10mn+
clients over 2QFY16-2QFY19, outpacing larger peers, Mphasis and Hexaware
This has been possible because of May 2015 acquisition of business process management implementation specialist, Incessant Technologies (Not
However, it has not been reflected fully in revenue growth where NIIT Tech falls squarely in middle of peer group reporting a 1.8 per cent
CQGR over 2QFY16-2QFY19 (we estimate organic growth at 1.7 per cent) compared to 3.2 per cent for LTI and 2.6 per cent each for Mindtree and
clients: Over 1QFY18-2QFY19, NIIT Tech has added most $ 1mn+ clients among peers barring LTI (which added one more than NIIT Tech at 17),
NIIT Tech matches bigger peers like Hexaware in scaling clients in $ 5mn+ tiers over 1QFY16-2QFY19, proving its ability to cross-sell and
We see foundation for a long runway of growth and think it can be strengthened by a named logo hunting strategy to add new Fortune-100
clients with sufficiently large IT spending to help NIIT Tech move to $1bn+ territory.
