NIIT Ltd

Stock Opportunities
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NIIT Ltd. has all thecharacteristicsof value buy and a stock for the long run. Right now dont feel like going into the details but can have a discussion if others are interested. Will definitely be interested to know the view of others. Brief positives mentioned below:

1). Honest and capable management.

2). Low debt

3). Education sector is a good long term story. NIIT is the best brand in the education sector.

4). Most important of all - Available at very reasonable price - because of problems (short term and temporary in my opinion) in business.

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Kashif

Am an interested party. I was v excited when they sold off their element K business and got rid of the debt. However, I did not anticipate the decline in ILS business which in all probability is due to slowdown in IT sector.

Downside is limited in my opinion from this price as NIIT Tech holding at 40% holding company discount is itself worth Rs 15.

Triggers that can I see are when an uptick in ILS business starts or sale of NIIT Tech stake.

Would appreciate any insights.

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Highlights of the call by Capital Mkt:

The Net Revenues declined by 1% YoY to Rs 260.4 crore for the quarter ended September 2014. Also, EBIDTA margins down by 200 bps (aprox) to 7% and after this EBIDTA was down by 26% YoY to Rs 18.1 crore. However, PAT losses lowered by 82% YoY to Rs 0.5 crore for the same period.

The Strong growth in Corporate Learning helps overcome weakness in Individual Learning and planned ramp down in GSA business during the quarter. The EBITDA impacted by operating leverage in Individual Learning partially compensated through cost management actions during the quarter.

The Net Revenues from Corporate Learning Solutions (CLS) grew by 12% QoQ to Rs 124.8 crore for the quarter ended September 2014. Also, EBIDTA margins were flat at 12% on QoQ basis and accordingly EBIDTA grew by same 12% QoQ to Rs 14.4 crore.The CLS business posted Strong QoQ (10%) and YoY (35%) volume growth during the quarter.The Strong business momentum in CLS is driven by 59% growth in MTS during the quarter. The MTS contributes 88% to CLS revenues vs 74% LY.It added 2 new MTS customers during the quarter.The Order intake from CLS business is of USD 20.7 million (up 50% YoY) for the quarter ended September 2014. The Pending Order Book is of USD 62.3 million (up 17% YoY); and 73% executable over next 12 months. The Revenue Visibility is at USD 164 million going forward.

The Individual Learning Solutions (ILS) Net Revenues grew by 38% QoQ (down by 21% YoY) to Rs 100.4 crore for the quarter ended September 2014. Notably, EBIDTA margins was at 4% (up by 430 bps QoQ) and EBIDTA grew by 1% QoQ to Rs 4.4 crore for the same period.The Student sentiment remains weak in ILS; limited hiring of fresh graduates in IT and Banking during the quarter.

There is 25% growth in RevGNIIT in flagship centers; 25% of enrolments in RevGNIIT for Beyond-IT Streams during the quarter.In ILS business, The Beyond-IT products contribute 27% to revenue mix versus 24% in Q2 FY14.The Overall Enrolments is at 82,571; Beyond-IT enrolments up 23% during the quarter.

The Order Intake from ILS business is of Rs 107.6 crore during the quarter. The Pending Order Book is of Rs 195.3 crore; 72% executable over next 12 months.The Net Revenues from School Learning Solutions (SLS) fell by 19% QoQ (11% YoY) to Rs 31.8 crore for the quarter ended September 2014. The EBIDTA margins fell by 340 bps QoQ to 2% and accordingly EBIDTA fell by sharp 70% QoQ to Rs 0.7 crore for the same period.In SLS, The NGSA Revenue at Rs 18.7 crore contributes 59% to revenue mix during the quarter.The Revenue partially impacted due to completion of one of GSA contract in Q2 covering 1870 Schools.It added 95 new NGSA schools added, with Order intake is of Rs 8.8 crore during the quarter.

The Pending Order Book for SLS is at Rs 395 crore, 26% executable over next 12 months.The Net Revenues from the Skill building Solutions grew by sharp 84% QoQ to Rs 3.5 crore for the quarter ended September 2014. Also, EBIDTA losses were down to Rs 1.3 crore from Rs 2.3 crore in the previous quarter.There will be separate Ministry of Skill Development constituted going forward. Also, The Government plans to form new policy by year end 2014.The Recruitment activity in IT sector slightly up, driven by increased attrition during the quarter.The Hiring of fresh graduates remains weak and continues to impact sentiment towards training during the quarter.

The Business confidence improved but environment remains weak. It expects modest turn around by year end.
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HI,

NIIT seems to have formed cup & handle pattern. it has strong support at Rs-43. CMP - 47.

looks like Target can be - Rs 73 - 93 with 1 year term.

disl: i am just learning tech analysis


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Anybody still tracking this company ? Would like to know their analysis.

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NIIT is fundamentally very weak company. Its ROE, margins are continuously decreasing. Better to avoid it. Risk of permanently losing capital is more.

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I have purchased a good quantity of the stock on close above 41.

Fundamentally- the company has revamped its management at the top level and is trying to turnaround in personal training segment. This is also apparent from the advertisements on TV. This company is the biggest brand in personal training in IT, and is positioned to benefit hugely from the Digital India project of the Indian government.

Further, the value of its holdings in NIIT technologies, provides it with a floor / support @37-38 levels.

For the present, the Bollinger bands on weekly charts are in band expansion phase. The stock is in the initial phase of its uptrend. On Weekly charts, the stock may halt for 1-2 weeks at 48-50. But usually, in such cases the uptrend continues for a few months. Therefore, it is better go hold this stock as long as trend lasts. It is better not to have any short term price targets, let the market take it as high as it wants to take it.

The uptrend is intact as long as the stock stays above 20 day SMA on weekly charts.

Therefore, our job in NIit Ltd is over for now, having got the entry price correctly. Now there is no need to monitor it on day to day basis. Just a weekend glance may be sufficient.

As long as the trend it up, its alright even if the stock stalls for 2-4 weeks. Just monitor it occasionally with help of Bollinger bands.

Those waiting on the sidelines are advised to jump on as soon as possible.

And if the uptrend collapses in the next week or two, you can still have the satisfaction of holding a good company ( market leader with huge potential) at a good price.I

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In my last post, I had written about the beginning of the uptrend in NIIT @ 41 rupees. I had also written about the desirability of monitoring the progress of the stock uptrend through use of Bollinger Bands on weekly charts.

After the announcement of the Skill India programme by the prime minister and also setting of target of training 10 million people by NIIT management, the stock price doubled in a matter of 3 weeks. Thereafter, in August the stock paused for consolidation. But a noteworthy thing has been that even during consolidation NIIT managed to stay above its long term support line

I have now posted the Niit wekly chart with Bollinger bands. It appears that the consolidation of the stock on monthly and weekly charts is now over. In the month of Sept 2015, the rally in NIIT may resume taking the stock higher towards 90…100…

Meanwhile, the purchase of NIIT by some well known value investors and its continued recommendation by Porinju Veliyath has been an icing on the cake for those invested in NIIT LTD.

As long as NIIT ltd stays above the long term support line, it is in an uptrend…in bullish zone. Any price correction in Sept 2015 should be used as an opportunity to buy more of NIIT LTD, as the Skill India Program of Modi govt has a long way to go and NIIT LTD can be the biggest beneficiary of that programme.

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Thanks Mehnazfatima For Your Analysis …Yesterday Md Of NIIT Was On Cnbc & Very Bullish on Their Skill Devlopment Area World Wide & They Are Very Confident Under Leadrship Of Mr Patwardhan Company Will Turn Around…

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CONFERENCE CALL - from Capital Markets

NIIT

Training Budgets allocation from BFSI and Life Science will increase in FY’17 while from Oil & Gas sector are expected to come down

The company held its conference call on 20th Jan’16 and was addressed by Mr. Rahul Patwardhan CEO and other management representatives.
Key Highlights

Q3 traditionally is weakest quarter of a year and hence as per the management, QoQ comparison would not reveal the true picture. On YoY basis, the net sales have grown by 6% to Rs 262.30 crore with Ebidta margin at 6%. While on QoQ basis, net sales are down by 4% with Ebidta margin came down from 9%.

As on Dec’15, around 70% of the company’s total revenues come from international markets and rest from India.

The Corporate Learning Group (CLG) which accounts for 60% of revenues for Dec’15 quarter, grew by 17% YoY. Ebidta margin remained steady at 12% which was guided by the management at the start of the year. The company added 1 new MTS (Managed Training Service) customer and total number of MTS customer’s stands at 27. With this, the revenue visibility stands at US $ 195 M with order intake of US $ 27 M in Dec’15 quarter.

As per the management, the company is seeing richest pipeline of customers in MTS segment, never seen in the past.

The Skills & Career Group (SNC) grew by 3% YoY in Dec’15 quarter and the segment achieved Ebidta margin of 1% vis a vis losses in the past. As per the management, the re-energization of the segment continues as per the plan of the company. Order intake is up by 23% in SNC business on YoY basis. Beyond IT sub-segment of the SNC segment now contributes around 38% of SNC revenues and is growing the fastest.

In School learning group (SLG) business, the revenues were down by 33% on YoY basis to Rs 20.90 crore, which is in line with what management expected as; the company is getting out from government school contracts. The Andhra Pradesh and Tehlengana school contracts got expired and were not renewed by the company.

Net debt stands at Rs 116 crore. Due to lower government collection than expected, debt increased on QoQ and on YoY basis. There were around Rs 140 crore of receivables from government as on Dec’15.

The company is moving well on track of its goals as guided by the management during the start of the year. For FY’17, while a detail planning for budget finalization is going on, more light will be thrown in next quarter only.

On CLG training budgets, management indicated that they are seeing small increases in budget allocation towards training budgets. BFSI and Life Sciences segment pipelines are strong and these sectors outsourcing should increase going forward. However the Energy segment, commodity segment budget are expected to be cut due to current oil and gas sector scenario. However higher outsourcing and higher off shoring expected in many parts of the world particularly US.

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NIIT ltd is now giving good opportunity for long term investors to add more …it has found support at the earlier breakout line @72.75 level…Investors may buy the stock nearer to this line and use this line as a stoploss…the stockis now showing bullish divergence on daily charts.

There is nothing wrong with the fundamentals of the stock, this fall is a technical fall and therefore it provides a good opportunity to buy this stock …playing the game technically.

Disclosure: I had purchased the stock earlier @42 and sold it @ 96…I do not hold it as of now but I am looking to add it to my portfolio in the near future…if possible.

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Incidentally, the main competitor of NIIT ltd …Aptech too is very interstingly poised…Those who missed buying NIIT at the trough (38-42) can seriously consider buying Aptech @ 62…

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Resumption of Uptrend in NIIT ltd

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Disclosure: I have purchased NIIT litd at an average price of around 80.50 in anticipation of a good upmove in the short term.

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CONFERENCE CALL - from Capital Markets

Expects strong momentum to continue in FY’17 as well

The company held its conference call on 10th May’16 and was addressed by Mr. Rahul Patwardhan CEO and other management representatives.

Key Highlights

  • As per the management, after the restructuring exercise initiated in Mar’15, FY16 year went better than what management expected at the start of the year.

  • For FY’16 at consolidated level, the net sales have grown by 5% YoY. However after adjusting the planned ramp down from schools business and other restructuring exercises, on like to like basis, revenues have grown by around 8% in FY’16.

  • Around 35% of total business comes from India, 56% from EU and US combines while the rest of the world including China, Africa and others account for around 8% of total business.

  • The company continues to be an asset light organization and this has resulted in lower depreciation by 21% in FY’16. The company does not intend to invest in any physical assets.

  • The Corporate Learning Group (CLG) which accounts for 56% of revenues for Mar’16 quarter, grew by 18% YoY. Ebidta margin remained steady at 12% which was guided by the management at the start of the year. The company added 4 new MTS (Managed Training Service) customer during Mar’16 quarter and total number of MTS customer’s stands at 27 as compared to 25 at the start of FY’15. With this, the revenue visibility stands at US $ 200 M with order intake of US $ 26 M in Mar’16 quarter and US $ 104 Mn in FY’16 is up by 28% YoY.

  • As per the management, the company is seeing richest pipeline of customers in MTS segment, never seen in the past.

  • Management expects the CLG segment to grow around 15% in FY’17. BFSI and Life Sciences segment pipelines are strong and these sectors outsourcing should increase going forward. However the Energy segment, commodity segment budget are expected to be cut due to current oil and gas sector scenario. However higher outsourcing and higher off shoring expected in many parts of the world particularly US.

  • The Skills & Career Group (SNC) grew by 5% YoY in Mar’16 quarter and the segment reduced the losses to Rs 1.9 crore in Mar’16 quarter. As per the management, the re-energization of the segment continues as per the plan of the company. Order intake is up by 23% in SNC business on YoY basis. Beyond IT sub-segment of the SNC segment, which is largely the banking and management training services is growing in double digit and now contributes around 45% of SNC revenues and is growing the fastest.

  • In School learning group (SLG) business, the revenues were down by 22% YoY in Mar’16 quarter. Despite significant drop in revenues, Ebidta was at 5%. Order intake stood at around Rs 17.10 crore. The company added 122 schools during Mar’16 quarter, taking total number of schools added during the year to 336. Order intake during entire FY’16 stood at Rs 44 crore.

  • Net debt stands at Rs 100 crore as on Mar’16 as compared to Rs 116 crore on Dec’15. The company will continue to reduce its net debt position.

  • Rs 2.2 crore was spend on the investments in digital media and on digital platform network during Mar’16 quarter, while benefits will accrue in the coming year.

  • NIIT Tv now has more than 235K registered users with presence in 161 countries. 76% of the users are from India and rest from across the globe.

  • Going forward management expects the strong momentum to continue in FY’17 as well. Post restructuring and looking at the pipeline of deals and order intake during FY’16, management continues to remain optimistic for FY’17.

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