NIIT Learning System Q2 Review - Big Miss, Leads To Guidance Cut To Half, On Deal Pushout: Dolat Capital

Dolat Capital Report

NIIT Learning Systems Ltd. reported revenue de-growth of 2.4% QoQ in Rs terms (our estimate: +2.5%), due to lower volumes from large customers Consulting-Professional Services. Ebitda margin declined 156 basis points QoQ at 22% (our estimate: 23.3%), the miss was primarily due to investments in ramping up new contracts.

Management downgraded its organic revenue growth guidance to 7%+ in CC from 12%-14% CC growth earlier and retained Ebitda outlook in 22-24% range.

Factoring in subdued Q2 performance, we revise our FY25E/FY26E EPS estimates by 4.1%/6.5%. Given an optimistic long term outlook, we maintain our ‘Accumulate’ rating with target price of Rs 530 per share (valued at 22 times of FY27E earnings).

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