NIIT Technologies
BSE SENSEX
27,530
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val. (INR m)
Free float (%)
S&P CNX
8,520
NITEC IN
61.2
25.2/ 0.4
632 / 388
5/-26/-18
143
69.3
17 October 2016
2QFY17 Results Update | Sector: Technology
CMP: INR411
TP: INR450 (+9%)
Neutral
Strong all-round performance…
…but weak outlook for 3Q is concerning
Financials & Valuations (INR b)
2016 2017E
Y/E Mar
26.8
28.1
Net Sales
4.7
4.6
EBITDA
2.8
2.7
NP
45.7
38.4
EPS (INR)
143.7 -16.1
EPS Gr. (%)
259.8 282.9
BV/Sh. (INR)
19.0
14.2
RoE (%)
18.6
15.6
RoCE (%)
Payout (%)
21.9
28.7
Div. Yield
2.4
2.7
2018E
30.8
5.2
3.1
50.1
30.6
319.9
16.6
15.6
21.9
2.7
Estimate change
TP change
Rating change
Quarterly Performance (IFRS)
Rebound in revenue growth…:
NIIT Technologies’ (NITEC) revenues grew 3.5%
QoQ to USD103m (our estimate: -0.8% QoQ), largely led by strong growth in
the Insurance (8% QoQ) and Travel (6.5% QoQ) verticals. Digital too performed
strongly (+9% QoQ) in the quarter, now accounting for 19% of total revenues.
…but weak outlook for 3Q:
The third quarter is expected to be weak due to
seasonality and spending cuts by a major US customer. However, we could see
the trend improving again from 4Q, led by a pick-up in new deal wins.
Following strong EBITDA margin increase of 90bp QoQ to 16.2% in 2QFY17 (our
estimate: -50bp), NITEC maintained its end-FY17 margin outlook at 17.5%.
Executable order book soft despite significant deal wins:
Deal wins in 2Q
stood at USD143m (v/s USD101m in 1QFY17). LTM deal wins rose 30% YoY, but
executable order book grew only 3% YoY to USD309m. The Morris deal was
renewed in 1HFY17 with TCV of USD85m, lower than current run-rate of
~USD100m due to expectations of weak discretionary spend by Morris.
Minor estimate changes as outlook remains tepid:
Despite pick-up in deal
wins, NITEC has failed to see material difference in its executable order book.
Cyclical and client-specific issues continue to plague overall performance,
resulting in yet another bleak year in terms of growth. We cut our revenue
estimates marginally by 0.6%/1% for FY17/18E. Also, subsequent margin
pressure in 3Q, lower yields on other income and higher ETR lead to further
EPS cuts of 5.9%/2.7% for FY17/18E. We revise our target multiple to 9x (in line
with historic average) to factor continued inconsistency in deal wins, and tepid
growth in executable order book.
Neutral.
(INR Million)
3Q
103
-0.9
6,787
14.0
37.3
19.1
18.2
14.2
52
20.9
48.0
741
8.5
53.7
12.1
9,517
78.7
13.6
41.0
43.0
4Q
1Q
102
99
-1.2 -2.5
6,847 6,692
12.0
4.4
37.1 35.3
18.7 20.0
18.4 15.3
14.2 10.9
39
71
18.2 10.3
39.0 46.0
790 720
6.6 -8.9
-548.9 22.7
12.9
5.1
9,476 9,022
79.0 79.8
13.6 13.4
39.0 39.0
46.0 46.0
FY17
2Q
103
4.2
6,913
2.0
35.3
19.0
16.2
12.0
27
24.2
54.0
596
-17.2
-12.7
9.7
8,868
81.0
FY16
3QE
102
-1.0
7,176
5.7
36.7
20.0
16.7
12.7
107
24.5
54.0
714
19.8
-3.6
11.6
9,028
77.5
FY17E
4QE
105 406
412
2.5
8.6
1.4
7,312 26,824 28,506
6.8 338.9 344.6
36.7 37.0
36.6
19.3 19.5
19.4
17.4 17.6
17.3
13.4 13.5
13.2
65 183
234
24.5 21.8
21.4
54.0 170.0 208.0
735 2,801 2,578
2.9 145.9
-8.0
-6.9
12.0 45.8
42.0
9,228 9,476 9,318
78.0 79.2
79.1
40.0
38.5
Est.
2QFY17
98
-0.8
6,688
-1.3
34.8
20.0
14.8
10.5
27
22.0
46.0
524
-27.2
-23.3
8.5
9,072
78.0
Var.
(%/bp)
5.4
498bp
3.4
328bp
45bp
-98bp
9.7
151bp
0.0
9.8
13.7
998bp
1056bp
-2.2
300bp
Y/E March
FY16
(Consolidated)
1Q
2Q
Revenue (USD m) *
98
104
QoQ (%)
5.9
6.2
Revenue (INR m)
6,411 6,779
YoY (%)
11.0
15.2
GPM (%)
36.4
37.2
SGA (%)
20.1
19.6
EBITDA Margin (%)
16.3
17.6
EBIT Margin (%)
12.0
13.7
Other income
79
13
ETR (%)
25.9
22.9
Minority Interest
40.0
43.0
PAT
587
683
QoQ (%)
-433.5
16.4
YoY (%)
35.6
70.8
EPS (INR)
9.6
11.2
Headcount
9,228 9,592
Util excl. trainees (%)
79.5
79.7
Attrition (%)
14.3
13.7
Offshore rev. (%)
39.0
41.0
Fixed Price (%)
42.0
41.0
E: MOSL Estimates; * Ex. forex & bought outs
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530
Sagar Lele
(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531

NIIT Technologies
2QFY17: Better than expected
NITEC’s 2QFY17 revenue was INR6,913 m, up 3.3% QoQ, above our estimate of
INR6,688m (decline of 0.1% QoQ). Revenue growth was 3.5% QoQ in CC terms.
Revenue growth was strong in both BFSI (3.4% QoQ) and Transport (6% QoQ),
which together constitute to 74% of total revenue.
Digital revenue grew by 9% QoQ and now constitutes to 19% of total revenue.
Exhibit 1: All-round revenue growth in 2Q
Revenue - ex-hardware (INR m)
6.5
3.9
1.2
-0.9
5,606
5,827
5,896
-0.4
5,872
6,251
6,749
0.4
6,773
1.1
6,847
-2.3
6,692
6,913
8.0
3.3
QoQ growth
Source: MOSL, Company
Revenue growth in BFSI was led by scaling of Insurance accounts in the US, and
completion of transition of new accounts in EMEA.
Growth in Travel & Transportation was due to scaling up of top accounts, which
were subdued over the last few quarters.
Exhibit 2: Growth driven by Insurance and Transportation
Verticals
BFS
Insurance
Transportation
Mfg / Med & Others
Contr to
Rev. (%)
19
23
33
25
Gr –
QoQ (%)
-1.9
8.0
6.5
-0.7
Contr to
incr. rev (%)
-11
53
63
-5
4 Qtr
CQGR (%)
4.9
2.8
-2.3
-0.5
Source: MOSL, Company
ADM revenues saw strong growth on account of the scaling up of Insurance and
Travel & Transportation accounts, and 9% QoQ growth in Digital.
Exhibit 3: ADM growth led by Digital and Insurance/Transportation
Practice
ADM
IP Assets
Managed Services
SI & PI
BPO
Contr to
Rev. (%)
68
7
17
3
5
Gr -
QoQ (%)
6.4
3.3
-2.4
3.3
3.3
Contr to
incr. rev (%)
99
5
-10
2
4
4 Qtr
CQGR (%)
1.2
-5.6
2.0
-6.5
0.5
Source: Company, MOSL
The focus geographies of Americas and EMEA saw robust growth on account of
traction in the verticals of BFSI and Travel & Transportation. RoW declined
because of a further decline in revenue in Government contracts in India.
17 October 2016
2

NIIT Technologies
Exhibit 4: RoW further declined because of Government business
Geographies
Americas
EMEA
RoW
Contr to
Rev. (%)
49
34
18
Gr -
QoQ (%)
5.5
9.8
-7.0
Contr to
incr. rev (%)
175
209
-94
4 Qtr
CQGR (%)
2.1
-0.2
-0.9
Source: Company, MOSL
Profitability: Strong margin performance
EBITDA margin expanded by 90bp QoQ to 16.2%, against our expectation of
50bp decline to 14.8%. Margins were higher because of a revival of revenue
growth, and reduction in SG&A.
SG&A declined by 1.6% QoQ to INR1,315m in 2Q, providing 100bp benefit on
EBITDA margins.
Exhibit 5: Wage hike, seasonality and revenue decline impact margins
EBITDA Margin (%)
20.1
19.5
19.4
19.6
19.3
19.6
19.1
18.7
SGA (%)
20.0
19.0
Source: MOSL, Company
PAT during the quarter grew by 90% QoQ to INR596m. The previous quarter
however included an exceptional item of INR361m in relation to amounts
outstanding with respect to a government contract that has been put on hold
for resolution of issues. Excluding this, PAT declined by 11.6% QoQ, led by lower
Other Income and higher taxes.
Exhibit 6: Strong deal signings, but no sustainable uptick
Fresh order intake (USD m)
124
109
123
89
97
80
143
119
101
103
Source: MOSL, Company
17 October 2016
3

NIIT Technologies
Exhibit 7: Executable order book up 3% YoY to USD309m
Executable order book (USD m)
295
298
296
295
300
300
301
301
307
309
Source: MOSL, Company
Takeaways from management comments
Strong traction in Insurance and Travel:
Revenue growth during the quarter
was led by both Insurance and Travel. While BFS continues to face pressures
because of macroeconomic uncertainty and regulatory challenges, Insurance
(outside of UK) has been robust. Travel for NITEC was strong on account of
revival in spending by top customers. Growth in Digital remained strong at 9%
QoQ, and it now constitutes to 19% of total revenue.
Soft 3Q ahead:
However, 3Q is expected to see softness on account of [1] Lesser
number of working days, and [2] Impact of spending cuts by a major customer in
the US. However, a bounce-back is anticipated in 4Q because of the new deal
signings, which is likely to lead to a better 2H, compared to 1H.
Margin guidance maintained:
Despite the expected weakness in 3Q, NITEC
maintained its margin guidance of exiting the year at 17.5% EBITDA margins.
This improvement would be led by revival of revenue growth, optimized costs,
improved operational efficiency and the impact of a bettering revenue mix.
Management changes:
Post Sudhir Chaturvedi, COO’s exit, responsibilities have
been distributed between the various business heads and the CEO. The
company isn’t looking to induct another COO, and the role has hence been
dissolved. During the quarter, Graham Clark, who was heading the Digital
services business also departed. This position however would be filled in going
forward.
Change in estimates
Performance in 2Q was strong, with a beat on both revenue growth and
margins. However, the trajectory isn’t expected to be linear and upwards. 3Q is
expected to be weak on account of seasonality and curtailed spending by one of
NITEC’s major customers in the US. This would lead to a blip in trend, but yet
result in a better 2H, compared to 1H. To account for this, we have cut our
revenue estimates by 0.6/1.0% in FY17/18E, and we now expect USD revenue
growth of 0.9/7.3% respectively.
The company is starting the year at an EBITDA margin of 15.3%. Although
margins are expected to hit 17.5% in 4Q, 3Q would see some pressure because
of the absence of revenue growth. We expect FY17 margins of 16.4% (-80bp
YoY). This however has the potential to continue expanding into FY18 given the
better revenue mix, and revival of revenue growth.
4
17 October 2016

NIIT Technologies
We have cut our EPS estimates by 5.9/2.7% for FY17/18E to factor in lower yield
on other income, and higher ETR – which is a function of NITEC’s old facility is
SEZ moving out of 100% tax subsidy to 50% on completion of five years.
Exhibit 8: Change in estimates
Revised
FY16
INR/USD
USD Revenue - m
YoY (%)
EBITDA Margin
EPS - INR
65.3
406
8.6%
17.6%
45.8
FY17E
67.6
409
0.9%
16.4%
38.4
FY18E
70.0
439
7.3%
17.0%
50.1
FY16
65.3
406
8.6%
17.6%
45.8
Earlier
FY17E
67.6
412
1.4%
17.3%
40.8
FY18E
70.0
444
7.9%
16.6%
51.5
FY16
0.0%
0.0%
0bp
0bp
0.0%
Change
FY17E
0.0%
-0.6%
-54bp
-87bp
-5.9%
FY18E
0.0%
-1.0%
-58bp
39bp
-2.7%
Source: Company, MOSL
17 October 2016
5

NIIT Technologies
Valuation and view
On track in focus areas:
NITEC’s biggest thrust in FY16 has been on reducing the
footprint in Government business and trying to expand revenue share from
International business. Business from Government segment was down to an
insignificant 4% FY16 (and is now at less than 1%). While organic growth in
International geographies was very strong in 1HFY16, the second half saw some
stagnation on account of deal closures, and delay in ramp ups. These issues have
again surfaced, and dampened the outlook for 3QFY17. However, fresh order
intake continues to be dominated by the US and EMEA leading to substantiation
of being on track.
Change in quality quotient:
NITEC’s EBITDA margin has expanded 308bp in FY16 to 17.6% - including a
round of wage hikes. This has been a function of lower government business
and driving operational efficiencies.
Revenue contribution from Digital has started looking reasonable, at 19% -
after the acquisition of Incessant (5% contribution to revenues). And has
been growing well above company average each quarter.
Introduction of Advantage Suite an year ago has helped revive growth in its
Insurance subsidiary NITL, which adds revenues into its owned IP / platforms
category.
Reduction in Government business is not only helping improvement in
margins, but also in DSOs – down from 89 days in 2QFY16 to 73 in 2QFY17.
Revenue growth pick-up around the corner, but sustenance questionable:
We
see three areas that hold strong potential to drive revenue growth for NITEC:
Travel segment, which will benefit from the low oil prices regime
Insurance segment with the acceptance of its new products around policy
admin and risk aggregation (with one credible reference in place)
Digital segment with contribution from Incessant.
However, on account of ramp downs in top accounts and delays in ramp up of
new deals, revenue growth has been soft for three out of the last four quarters.
Although momentum is expected to revive 4Q onwards, uncertainty around
Brexit and its impact on NITEC’s presence in the Insurance vertical in the UK
bring some ambiguity around the sustenance of such momentum.
And there are other issues yet to be ironed out:
The quarterly order intake has remained subdued and inconsistent for
multiple quarters. In 2QFY17, it managed to bag deals worth USD143m,
after several quarters of inconsistent and lumpy deal wins.
This has partly also been responsible for the stagnant executable order book
of ~USD300m, which has largely remained range-bound for eight quarters
now. Without sustenance of the pick-up in order intake, growth recovery is
likely to elude.
We expect NITEC to grow its USD revenues at a CAGR of 4% and earnings at a CAGR
of 4.7% over FY16-18E. NITEC currently trades at 10.7/8.2x FY17/18E. Our target
price of INR450 discounts FY18 EPS by 9x (compared to 10x earlier), factoring the
missing consistency in deal wins, on-going lumpiness in revenue growth, and
consequent lower-than-industry growth rate.
17 October 2016
6

NIIT Technologies
Key triggers
Boost to travel vertical (40% of revenues) from low energy prices
Improved commentary around NITL
Sustained uptick in fresh order intake
Key risks
Continued customer-specific issues
Slowdown of IMS growth amid stiff competition and pricing pressure
Difficulty in maintenance of margins in the absence of revenue growth
Exhibit 2: NITEC 1-year forward PB chart
21.7
6.0
4.0
8.7
7.4
2.3
8.9
2.0
0.5
0.0
1.7
1.4
1.4
PB (x)
Median(x)
Peak(x)
Min(x)
Exhibit 1: NITEC 1 year forward PE chart
25
20
15
10
5
0
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
Avg(x)
5.5
17 October 2016
7

NIIT Technologies
Story in charts
Exhibit 9: Focused on growing select verticals – BFSI and
Travel
Exhibit 10: Steady decline in hardware revenues
Hardware revenues (INR m)
25
19
BFS
Insurance
23
33
Transport
Manufacturing,
Medical and Others
170
56
57
240
160
30
14
0
0
0
Source: Company, MOSL
Source: Company, MOSL
Exhibit 11: Fresh order intake inconsistent
Fresh order intake (USD m)
124
103
109
123
89
97
80
119
101
143
Exhibit 12: Executable order book steady at around USD300m
Executable order book (USD m)
295
298
296
295
300
300
301
301
307
309
Source: Company, MOSL
Source: Company, MOSL
Exhibit 13: EBITDA margins improved significantly in FY16…
EBITDA Margin (%)
20.1
19.5 19.4 19.6 19.3
19.6
19.1
18.7
SGA (%)
20.0
19.0
Exhibit 14: …Utilization has been a key lever so far
Utilization (%)
80.3
78.6
78.4
77.3
77.3
78.0
78.8
79.0
81.0
79.7
79.5
79.0
79.8
78.7
Source: Company, MOSL
Source: Company, MOSL
17 October 2016
8

NIIT Technologies
Operating metrics
Exhibit 15: Operating metrics
Operating metrics
Revenue Mix Geo-wise (%)
Americas
EMEA
RoW
Revenue mix Vertical-wise (%)
BFS
Insurance
Transportation
Mfg / Med / Others
Practice Split (%)
Application Development & Management
IP Assets
Managed Services
SI & PI**
Business Process Outsourcing
Non Linear BPO
Revenue Mix (%)
Offshore
Onsite
Effort Mix (%)
Offshore
Onsite
Top Clients contribution (%)
Top - 5
Top -10
Fresh order Intake - USD m
USA
EMEA
ROW
Deals signed - USD m
Executable Order Book (NTM) - USD m
Employee Metrics
Billable Personnel
Sales and Marketing
Others
Total
Utilization
Attrition
4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
4QFY16
1QFY17
2QFY17
45
38
17
44
36
20
44
38
18
44
35
21
44
35
21
45
35
20
46
35
19
46
34
20
45
33
22
48
32
20
49
34
18
17
18
37
28
16
18
39
27
16
17
42
25
16
17
40
27
15
18
38
29
16
20
37
27
16
21
37
26
17
21
36
26
19
21
32
28
20
22
32
26
19
23
33
25
64
9
12
9
3
3
62
9
16
7
3
3
63
9
18
4
3
3
60
9
18
7
3
3
59
9
18
9
2
3
63
8
16
8
5
66
9
16
4
5
67
8
16
4
5
65
8
18
4
5
66
7
18
3
5
68
7
17
3
5
35
65
37
63
35
65
37
63
38
62
39
61
41
59
41
59
39
61
39
61
39
61
76
24
76
24
77
23
76
24
77
23
78
22
79
21
79
21
78
22
77
23
76
24
35
47
34
48
34
47
34
47
34
46
35
46
32
43
33
45
31
43
32
45
32
46
89
30
25
144
290
34
27
63
124
295
46
21
36
103
298
61
25
23
109
296
39
29
21
89
295
43
31
23
97
300
29
34
17
80
300
50
55
18
123
301
30
61
28
119
301
42
30
29
101
307
85
45
13
143
309
7,631
192
467
8,290
77.3
14.4
7,608
186
488
8,282
78.0
15.4
7,601
191
496
8,288
78.6
15.8
7,387
186
486
8,059
78.8
15.8
7,822
202
470
8,494
79.0
15.8
8,517
204
507
9,228
79.5
14.3
8,853
212
527
9,592
79.7
13.7
8,784
199
534
9,517
78.7
13.6
8,743
199
534
9,476
79.0
13.6
8,275
204
543
9,022
79.8
13.6
8,109
217
542
8,868
81.0
12.9
Source: Company, MOSL
17 October 2016
9

NIIT Technologies
Exhibit 16: Operating metrics
QoQ Growth Rates
Revenue Mix Geo-wise (%)
Americas
EMEA
RoW
Revenue mix Vertical-wise (%)
BFS
Insurance
Transportation
Mfg / Med / Others
Practice Split (%)
Application Development & Management
IP Assets
Managed Services
SI & PI**
Business Process Outsourcing
Top Clients contribution (%)
Top - 5
Top -10
Top 6-10
Net Adds - Employees
Onsite
Offshore
Total
Annualized Rev / employee - USD
Change in Productivity
Cash and Cash Equiv. (INR m)
Hedge amount (m)
USD
GBP
EUR
Average rates
USD
GBP
EUR
4QFY141QFY152QFY153QFY154QFY151QFY162QFY16
2.5
0.2
-5.4
-4.0
-7.0
15.5
1.9
7.5
-8.3
1.2
-6.8
18.1
2.7
2.7
2.7
7.3
4.9
-0.1
8.1
5.7
0.5
3QFY16
0.1
-2.7
5.4
4QFY16
-1.3
-2.1
11.0
1QFY17
4.3
-5.2
-11.1
2QFY17
5.5
9.8
-7.0
0.2
0.2
-2.4
3.9
-7.6
-1.9
3.5
-5.4
1.9
-3.8
9.7
-5.7
1.2
1.2
-3.6
9.3
-3.7
8.7
-2.5
10.3
11.9
16.5
2.1
-2.3
5.7
11.0
5.7
1.8
6.4
0.1
-2.6
0.1
12.8
0.9
-10.3
8.6
2.9
2.4
-2.3
-9.2
-1.9
8.0
6.5
-0.7
-2.8
12.7
-7.5
28.8
0.2
-4.9
-1.9
30.9
-23.7
-1.9
3.5
1.9
14.6
-41.8
1.9
-3.6
1.2
1.2
77.1
1.2
1.0 12.0
2.7
-6.8
2.7
-6.8
32.0
-6.8
-31.6 162.2
10.8
19.0
5.7
-47.1
5.7
1.6
-11.0
0.1
0.1
0.1
-2.1
0.9
13.5
0.9
0.9
-0.8
-14.5
-2.3
-26.7
-2.3
6.4
3.3
-2.4
3.3
3.3
-5.2
-3.9
0.2
-4.7
0.2
14.5
1.9
-0.3
-5.4
1.2
1.2
1.2
2.7
0.5
-5.2
8.0
4.9
-3.8
-3.3
-1.2
5.7
3.2
4.8
9.2
-5.2
-3.6
0.9
0.9
2.3
5.9
3.3
5.6
11.2
-23
153
130
-7
-1
-8
-49
55
6
-4
-225
-229
-5
440
435
72
662
734
-11
375
364
31
-106
-75
43,208
-0.1
3118
31
-72
-41
42,895
-0.7
4241
11
-465
-454
43,784
2.1
4363
12
-166
-154
46,575
6.0
4603
44,692 45,036 45,703 46,440 43,340 42,351 42,816
-1.4
0.8
1.5
1.6
-6.7
-2.5
1.1
2874
1951
2638
3358
3375
2264
2950
45.8
11.3
4.5
51.1
11.3
4.5
51.2
11.3
4.5
51.5 51.76 58.5 58.5
11.3 11.3 13.05 13.05
4.5
4.5
4.5
4.5
58.5
13.1
4.5
68.4
104.6
76.1
67.5
13.1
4.5
69.8
104.7
77.3
65.5
13.1
4.5
70.4
103.9
78.7
65.5
13.1
4.5
70.6
100.1
79.4
64.9 65.4 65.3 65.3 65.6 66.4 67.46
105.2 108.1 108.8 107.5 104.6 103.5 103.9
87.6 89.7 87.3 87.3 82.8 79.3 77.05
Source: Company, MOSL
17 October 2016
10

NIIT Technologies
Financials and Valuations
Key assumption
INR/USD Rate
Revenues (USD m)
Offshore Revenue (%)
Total Headcount
Net Addition
Blended Utilization (%)
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2011
46
244
42
5,806
1,330
83
2011
12,323
34.9
2,404
19.5
315
2,089
0
89
0
2,178
323
14.8
33
1,822
1,822
44.3
2011
593
6,885
7,478
110
-143
7,488
5,814
3,920
1,894
1,437
0
6,665
0
2,871
1,637
2,157
2,508
2,508
0
4,157
7,488
2012
48.3
322
37.7
7,362
1,556
80.2
2012
15,764
27.9
2,682
17.0
364
2,318
0
282
0
2,600
637
24.5
-8
1,971
1,971
8.2
2012
596
8,505
9,101
506
-207
9,523
8,515
4,284
4,231
2
0
8,822
0
3,492
2,871
2,459
3,533
3,533
0
5,289
9,522
2013
54.2
358
37.5
8,158
796
78.8
2013
20,213
28.2
3,296
16.3
567
2,729
0
207
0
2,936
751
25.6
52
2,133
2,133
8.2
2013
602
10,339
10,941
92
-122
11,084
9,234
4,851
4,383
277
0
10,606
0
4,538
3,325
2,743
4,182
4,182
0
6,424
11,084
2014
61.5
354
35.5
8,290
132
78.3
2014
23,050
14.0
3,516
15.3
619
2,897
0
288
0
3,185
749
23.5
75
2,361
2,361
10.7
2014
607
12,632
13,239
89
-223
13,294
10,004
5,470
4,534
1,286
0
11,971
0
5,643
2,874
3,454
4,497
4,497
0
7,474
13,294
2015
61.2
374
36.7
8,494
204
78.6
2015
23,724
2.9
3,456
14.6
916
2,540
0
19
-800
1,759
541
30.8
79
1,139
1,939
-17.9
2015
610
12,964
13,574
84
-386
13,461
11,965
6,386
5,579
1,203
0
12,600
0
6,060
3,375
3,165
5,921
5,921
0
6,679
13,461
2016
65.3
406
40.0
9,476
982
79.2
2016
26,824
13.1
4,733
17.6
1,101
3,632
0
183
-13
3,802
831
21.9
170
2,801
2,814
45.1
2016
612
15,296
15,908
102
-259
16,396
15,692
7,487
8,205
167
0
13,861
0
5,901
4,241
3,719
5,837
5,837
0
8,024
16,396
2017E
67.6
409
38.5
9,228
-248
79.1
2017E
28,093
4.7
4,615
16.4
1,163
3,452
2018E
70.0
439
38.3
9,928
700
78.5
2018E
30,837
9.8
5,239
17.0
1,246
3,994
Income Statement
(INR Million)
0
271
-361
3,362
795
23.7
208
2,359
2,720
-3.4
2017E
0
371
0
4,365
1,069
24.5
216
3,080
3,080
13.2
2018E
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
E: MOSL Estimates
(INR Million)
614
19,039
19,653
114
-347
20,112
18,068
9,895
8,173
232
0
17,113
0
6,512
6,678
3,923
5,406
5,406
0
11,707
20,112
614
16,771
17,385
114
-347
17,838
16,668
8,649
8,018
232
0
14,549
0
6,010
4,802
3,738
4,962
4,962
0
9,587
17,838
17 October 2016
11

NIIT Technologies
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
E: MOSL Estimates
2011
30.7
36.0
126.1
7.5
24.4
2012
33.2
39.3
153.2
8.0
24.1
2013
35.5
44.9
182.0
8.5
24.0
2014
38.8
49.0
217.8
9.0
23.2
2015
18.8
33.9
223.7
9.5
50.6
21.9
12.1
6.3
0.9
1.8
2.3
27.4
26.0
0.0
70
0
0
0.0
2011
2,404
0
-1,619
-323
-69
393
-505
-112
0
0
-505
393
-107
0
-431
-145
-257
1,895
1,638
23.8
20.2
0.0
74
0
0
0.0
2012
2,682
0
102
-637
-56
2,091
-1,267
824
0
0
-1,267
288
396
0
-274
410
1,234
1,637
2,871
21.3
19.4
0.0
73
0
0
0.0
2013
3,296
0
-681
-751
33
1,897
-994
903
0
0
-994
355
-414
0
-391
-450
453
2,871
3,324
19.5
17.9
0.0
81
0
0
0.0
2014
3,516
0
-1,501
-749
-176
1,090
-1,779
-689
0
0
-1,779
593
-3
0
-352
238
-451
3,325
2,874
8.5
14.6
0.0
90
0
0
0.0
2015
3,456
0
1,296
-541
-1,042
3,169
-1,878
1,291
0
0
-1,878
-129
-5
0
-656
-790
501
2,874
3,375
2016
45.7
63.7
259.8
10.0
21.9
9.0
6.5
4.6
0.8
1.6
2.4
19.0
18.6
0.0
81
0
0
0.0
2016
4,733
0
-479
-831
-56
3,367
-2,691
676
0
0
-2,691
705
18
0
-533
190
866
3,375
4,241
2017E
38.4
57.3
282.9
11.0
28.7
10.7
7.2
4.6
0.8
1.5
2.7
14.2
15.6
0.0
77
0
0
0.0
2017E
4,615
0
-1,002
-795
-657
2,160
-1,041
1,119
0
0
-1,041
-50
12
0
-520
-558
561
4,241
4,802
2018E
50.1
70.4
319.9
11.0
21.9
8.2
5.8
3.7
0.6
1.3
2.7
16.6
15.6
0.0
74
0
0
0.0
2018E
5,239
0
-244
-1,069
-216
3,710
-1,400
2,310
0
0
-1,400
-15
0
0
-419
-434
1,876
4,802
6,678
Cash Flow Statement
(INR Million)
17 October 2016
12

NIIT Technologies
Corporate profile
NIIT Technologies is a leading IT solutions
organization with over 8,000 professionals serving
customers in North America, Europe, Middle East,
Asia and Australia. Company offers comprehensive
end-to-end software solutions and services in
Application Development and Management,
Managed Services, Cloud Computing and Business
Process Outsourcing to organizations in the banking
& financial services, insurance, travel &
transportation, manufacturing & distribution, and
government sectors.
Company description
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Sep-16
Promoter
DII
FII
Others
30.7
21.5
29.6
18.1
Jun-16
30.8
20.2
32.7
16.3
Sep-15
30.8
21.1
32.0
16.0
Source: Capitaline
Exhibit 3: Top holders
Holder Name
HDFC Trustee Company Ltd - A/C HDFC Mid -
Capopportunities Fund
DSP Blackrock Micro Cap Fund
Brandes
Investment
Trust-Brandes
International Small Cap Equity Fund
Fidelity Puritan Trust-Fidelity Low-Priced
Stock Fund
Fidelity
Management
And
Research
Company A/C Fidelity Advisor Series I
Fidelity Advisor Small Cap Fu
% Holding
6.3
3.5
3.1
3.1
2.7
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Rajendra S Pawar
Arvind Thakur
Lalit Kumar Sharma
Designation
Chairman & Managing Director
Joint Managing Director & CEO
Company Secretary
Exhibit 5: Directors
Name
Amit Sharma*
Arvind Thakur
Ashwani Puri*
Holly Jane Morris*
Name
Rajendra S Pawar
Surendra Singh*
Vijay K Thadani
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Price Waterhouse
Ranjeet Pandey & Associates
Type
Statutory
Secretarial Audit
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
38.4
50.1
Consensus
forecast
43.8
51.0
Variation
(%)
-12.2
-1.8
Source: Bloomberg
Source: Capitaline
17 October 2016
13

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subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the
Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
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Kadambari Balachandran
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17 October 2016
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