Motilal Oswal - Coforge (COFORGE) MOSL: NIIT TECHNOLOGIES (Neutral)-Upbeat on broad-based traction

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Motilal Oswal

MOSL: NIIT TECHNOLOGIES (Neutral)-Upbeat on broad-based traction

NIIT Technologies: Upbeat on broad-based traction

(NITEC IN, Mkt Cap USD1.0b, CMP INR1198, TP INR1350, 13% Upside, Neutral)

All-round beat…: 2QFY19 CC revenue growth of 7.6% QoQ exceeded our estimate of +5%. Dollar revenue was up 14.1% YoY to USD131m. EBITDA margin expanded 220bp QoQ to 18% – 100bp beat led by better SGA productivity (17% v/s est. of 18.4%). PAT growth of 30% QoQ (to INR1.12b), too, exceeded our estimate of +12%, mainly led by operating beat.
…on broad-based traction: In USD terms, while BFS was flattish QoQ, other verticals grew in the range of 6-10% QoQ. Geographically, North America grew 3.7% QoQ, while EMEA did much better with 12.4% QoQ growth. Digital grew by 12% QoQ (+38% YoY), now forming 28% of overall revenue.
Deal wins, order book suggest continued traction: NITEC’s order intake grew for the fifth straight quarter to USD160m, with LTM book-to-bill at 1.19. This lends visibility for healthy growth. Also, its 12-month executable order book stands at USD363m. The ratio of next 12-month revenue to current quarter order book stands at ~1.55x for recent actuals, which, if extrapolated, implies 14% USD revenue growth in the next four quarters. Thus, revenue growth of mid-to-high teens appears doable, given the traction in deals. NITEC expects to continue signing at least two large deals every quarter.

19/10/2018 14 EN

Underlying

Coforge

NIIT Technologies Ltd is an India-based Information technology (IT) solutions company. The Company is engaged in application development and maintenance, managed services, cloud computing and business process outsourcing to organizations in several sectors such as banking and financial services, insurance, travel and transportation and logistics, manufacturing and distribution and government. The Company is combined with capabilities in data and analytics, automation, cloud and digital, is enabling to drive business transformation. The Company offers Tron intelligent automation, digital process transformation, application services, business process services, cyber security, among others. It serves industries such as travel and transportation, insurance, banking and financial services and enterprise services.

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INE591G01017 National Stock Exchange of India India

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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MOSL: NIIT TECHNOLOGIES (Neutral)-Upbeat on broad-based traction

Coforge Ltd: 2 directors

MOSL : COFORGE: Strong growth outlook factored in the valuation

Coforge’s Copasys Automated Compliance Audit and Quality Assurance Platform Receives US Patent

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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