Dolat Capital: NIIT Tech’s Results Beat Estimates, V-Shape Recovery In Q2 To Ensure Growth Outperformance
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Dolat Capital Report
NIIT Technologies Ltd. reported revenue decline of 6.8% QoQ in constant currency terms (our estimate 8%), led by sustained traction in non-Travel verticals (up 3.2% QoQ).
Ebit margins stood at 11.6% (down 240 basis points QoQ) well ahead of our estimate of 10.7%. Profit after tax was down 30% QoQ at Rs 799 million (our estimate Rs 934 million) owing to provisioning of Rs 180 million towards receivables.
Added strong total contract value of about $186 million during the quarter implying growth of about 13% on trailing twelve month basis at $760 million.
Deal additions include three significant deals -- one each in banking, financial and insurance sector, travel, airport verticals. Beyond these deals NIIT also signed two additional significant deals in July 2020.
Outlook remains confident as it expects to deliver sequential growth of 7% plus in constant currency terms in Q2 with 150 basis points gains in operating profit margin QoQ.
Sharp recovery in Q2 would help it achieve its annual outlook of mid-single digit growth for FY21 and Ebitda margins (pre-restricted stock unit) of 17.8%.
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