Wednesday, January 20, 2010

Stock Idea: NIIT Technologies Ltd.

This IT service company had managed to show a better performance in Q2 itself. By adopting various cost cutting measures then, it managed to tide over the bad times. And now that things are improving and costs remain low, Q3 ended 31st Dec 2009 has been good for NIIT Technologies.
Consolidated revenue YoY wad down 7% but up 2% on a QoQ but keeping a tight leash on the costs, the company showed a smart rise in operating profit, up 14% on YoY and 11% on a QoQ. OPM was up 22% YoY and QoQ. Net profit was up by a whopping 111% YoY and 10% on a QoQ.
The main contributor was the BFSI segment, which like in Q2FY10, maintained its share at 44% of overall revenues. Business from Travel and Transport segment contributed 34% to revenues. Share of revenues from Retail and Distribution was 9%. In Q3, it secured new orders to the tune of US$ 57 million. 4 new clients were added. Revenue from APAC region has gone up significantly and it now stands currently at 15% of the revenue mix. Share of revenue from EMEA during Q3 was 42%; North America contributed 34%, while India contributed 9% of the revenues.
The company has hedge exposure but thankfully, they have been done at non-average rate of 42.50 to a dollar. This is good in the current scenario of rupee appreciation as every time, the rupee becomes stronger, the hedge losses reduce. With the perception that rupee will remain strong, at least till the end of FY10, also with relatively lower exposure to North America, the outlook for the company remains good.
Source: Internet ( by S P Tulsian)

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