NIIT Tech (NITEC) reported a poor Q1FY21 performance marked by a 9.8% QoQ USD revenue decline due to weakness in the travel and transportation vertical.

NIITT had exposure to airlines that accounted for ~13% of overall revenues in Q4FY20, which has dropped to 5% in the current quarter. This was the primary reason for the sharp fall in revenues. However, going forward, the company believes airline revenues have bottomed out. It is expected to remain at these levels in the near term. Further, rail, logistics, hospitality and airports in the travel vertical were stable and are expected remain stable. In addition, we expect banking, insurance and healthcare verticals to register improving growth (as seen in this quarter) on the back of large deal wins....

Background: NIIT Technologies is a leading global IT solutions organization. The Company focuses on three key verticals which are Banking and Financial Services (15% of revenues), Insurance (31% of revenues), and Travel/ Transportation (27% of revenues). The company has around 106 active clients across US (46% of revenues), EMEA (40% of revenue) and Row (14% of revenues). The Company added 41 new clients in FY2020 and won 3 large deals in 4QFY20. NIIT Tech derives...

Large deal wins in previous quarters to drive growth in FY21E During the quarter, the company reported robust revenues despite headwinds from the travel sector. NIITT has exposure to airlines that account for ~14% of overall revenues. This is expected to remain under pressure. However, rail and airports in the travel vertical are expected to remain stable. Further, although the company is expected to report a single digit decline in Q1FY21E revenues, we expect revenues to grow in Q2FY21E based on the large deals won in Q4FY20 and Q3FY20 (as indicated by the company). As a...

NIIT Tech (NITEC) reported a strong Q4FY20 with 3% QoQ CC revenue growth and resilient operating margins.

Results inline, Deal Wins supports confident commentary NITEC reported 3% QoQ CC revenue growth (our estm: 2%) largely driven by traction in Insurance (up 6% QoQ) and Others Vertical (up 11% QoQ) that covered up for decline in Travel vertical (-3.8% QoQ). OPM was in-line with our estimates at 14%. PAT stood at ` 1.1Bn below estm due to provisioning related exceptional loss of ` 128mn. It has added $180mn in TCV including 3 large deals (2 in BFSI) during the quarter. Deal TCV on TTM basis is up 16% at $749mn. The 12M...

The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...

Background: NIIT Technologies is a leading global IT solutions organization. The Company focuses on three key verticals which are Banking and Financial Services (16% of revenues), Insurance (30% of revenues), and Travel/ Transportation (29% of revenues). The company has around 100 active clients across US (48% of revenues), EMEA (37% of revenue) and Row (15% of revenues). The Company added 40 new clients in FY2019 and won 6 large deals, spread across US and...

Large deal wins, healthy order book to drive revenues US$ revenues grew 1.7% QoQ to $151.3 million mainly driven by transport vertical partially driven by weakness in banking & financial services (client specific) and digital revenues. Weakness in banking services is likely to see a revival in growth as the company has won a large deals from its challenged client. Further, NIITT has hired three new leaders in top positions (CFO, digital business & global sales), which are expected to drive the momentum. In addition, strong fresh order intake (grew strong 24% QoQ) and robust...

NIIT Tech's (NITEC) Q3FY20 performance was mixed with a miss on operating margins (20bps QoQ to 18.1%) but healthy deal wins.

Sector: IT /Mid-Cap | Earnings Update 2QFY20 Background: NIIT Technologies is a leading global IT solutions organization. The Company focuses on three key verticals which are Banking and Financial Services (16.7% of revenues), Insurance (31.1% of revenues), and Travel/ Transportation (27.8% of revenues). The company has around 95 active clients across US (49% of revenues), EMEA (37% of revenue) and Row (14% of revenues). The Company added 40 new clients in FY2019 and won 6 large deals, spread across US and EMEA....

Large deal wins, healthy order book to drive revenues Wining large deals, hiring senior leaders in sales position, higher commission to sales for wining large deals, scaling the new wins, mining existing clients and strategic acquisition has been the key strategy of the company to drive revenues in the long term. This strategy has led to highest order book for the company in recent quarters and robust organic growth. The strength of the strategy is also visible in the current quarter in which the company reported organic growth of 3.0% QoQ despite headwinds from...

NIIT Tech (NITEC) reported organic revenue growth of 4.1% QoQ CC and EBITDA margins of 18.3% in Q2FY20, marking a better-than-expected operating performance.

KEY HIGHLIGHTS Revenue growth momentum intact Zero-Debt Sound Margins Strong Deal...

In Q1FY20, the company had fresh order intake of USD 175 Mn bringing the order book executable over the next 12 months to USD 395 Mn vs USD 347 Mn in Q1FY19.

Adjusted for GIS divestment, NIIT Tech (NITEC) reported organic revenue growth of 4% QoQ CC and EBITDA margins of 16.9% in Q1FY20, marking a better-than-expected operating performance.

NIIT Technologies came out with stable set of numbers, mostly in line with our estimates except some one-offs. Consolidated revenue for Q1FY20 came at Rs 9,627mn, broadly in line with our estimate of Rs 9,752mn, registering 16.7% YoY growth, while on QoQ basis in Constant Currency terms, revenue growth excluding GIS business was 4%. Reported EBITDA grew 5.3% YoY to Rs 1,385mn, while EBITDA margin contracted by 155bps YoY to 14.4% against 15.9% YoY due to some one-off expenses. Adjusting for one-offs margin stood at 17.1% against our estimate of 16% for the quarter....

23 July 2019 from continuing operations (excluding GIS) stood at 4% QoQ CC (our consecutive quarter of an uptick in deals TCV at USD175m (v/s USD170m in 4QFY19 and USD151m in 1QFY19). EBIT margin shrank 150bp QoQ (+70bp YoY) to 12.8% (100bp miss), largely as wage hikes become fully effective for NITEC in the first quarter. Adj. PAT grew 22% YoY (-8% QoQ) to INR1.0b (in-line). Digital revenue grew 12% QoQ (+46% YoY), accounting for 34% of revenue. In terms of verticals, growth (QoQ CC) was broad-based, with Transportation up 5.9%, Insurance up 6.6%, BFS up 2.8%, and others up 1.5%. BFS was relatively soft due to spending cuts in one of the top-5 clients in the Capital Markets segment. NITEC has not lost any wallet share within the client. There are no other client-specific issues within the top-20 customers as of now.

We believe NIIT Tech's strong growth momentum to continue in the future given its strong deal momentum and order book. As of Q4FY19, its order book stands at $390 Mn, executable over the period of next 12 months with $170 Mn as fresh order intake during Q4FY19.

Sector: IT /Mid-Cap | Earnings Update 4QFY19 Background: NIIT Technologies', a leading global IT solutions organization, revenue share by service mix in 4QFY19: Application Development & Maintenance (70%), System integration & Package implementation (4%), Managed service (17%), IP assets (5%) & BPO (4%). Revenue share amongst vertical: BFSI (44%), Transportation (27%), Manufacturing, Others (29%). Revenue share by geography mix: America (49%), EMEA (33%), and ROW (18%). Company has total headcount of 10,263; Active clients: 90. Utilization was at 79.3%. Revenues share from top 5 clients: (29%), top 10: (41%). DSO came in at 62. Revenue Mix offshore (34%) and On-site (66%).Client...