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Accumulate NIIT, target of Rs 55: Angel Broking

Posted on: June 1st, 2009 and is filed under Brokerage Recommendations.

Angel Broking has upgraded its rating on NIIT from neutral to accumulate with a target price of Rs 55 in its May 29, 2009 research report.

“Going ahead, we expect NIIT to clock CAGRs of 11.4% and 14% in Top-line and Bottom-line, respectively over FY2009-11E. The current turmoil in the global economy and slowdown in the domestic economy are likely to impact NIIT’s business in FY2010, with the ILS-IT, ILS-FMT and CLS Businesses in particular all expected to witness an adverse impact, even as the SLS Business’ resilience to the slowdown is likely to enable it to grow at a good pace. We have factored in an economic recovery in FY2011 and expect the ILT-IT Business to bounce back to higher levels of growth from that fiscal.”

“In terms of segment-wise estimates, we expect the ILS-IT Business to grow at a 17.7% CAGR over the mentioned period, SLS at a 25.6% CAGR and CLS at a 4.1% CAGR, while ILS-FMT is expected to clock a 5% compounded de-growth over the period. At current levels, the stock is trading at 9.3x FY2011E EPS. Given the expected recovery in the Indian as well as global economy in FY2011, we believe NIIT is well-positioned to leverage the recovery to its advantage. We thus upgrade the stock to ‘Accumulate’ from ‘Neutral’, with a target price of Rs 55,” says Angel’s research report.

source: MOneycontrol

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