*Result Update* *(**January 15, 2014)*
*Result Update* *NIIT Technologies Ltd.* *Reco: **ACCUMULATE* *CMP: Rs **389* *Target Price: Rs **450* *On the improvement trail* · Dec’13 qtr revenues were tad short on expectations, margins improved by ~120 bps QoQ to 16.3% for the 2nd quarter in a row aided by lower Hardware/India business · Strong order intake during the quarter (US$ 377 mn) led by the largest renewal TCV deal for the company. DSO improved to 96 days led by business mix improvement · Company continues to emphasis on targeting better revenue mix (greater share of International business) and thus we see an improving margin trajectory ahead · Raise FY15E EPS by ~5% to Rs 45. Introduce FY16E EPS at ~Rs 50.2. Valuations remain inexpensive given improvement in financial performance ahead. ACCUMULATE, TP Rs 450 *Recommendation History* *Recent Research Reports* NIIT Technologies Ltd.: Soft performance, inexpensive valuations<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=gML%2fFGf72NQ%3d&fName=%2fFriPPoLxfLZ2EAWoN3ekgD4rAgYaiCoEarEM79JnOxR42lzAEFyytx9m%2b4yl7fC;%2fFriPPoLxfLZ2EAWoN3ekgD4rAgYaiCoEarEM79JnOwBNm6N%2fiUwTLdwNPbUv7Dz;%2fFriPPoLxfLZ2EAWoN3ekgD4rAgYaiCo2n5P9S1pcilP5MH5bBEBrw%3d%3d;> IT Services; US Immigration Bill risks on radar<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=OpXPPQG6U7w%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54qT4bw38KudS7B54TeIVr%2fBSI7QlPWICp;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54qT4bw38KudRrh6ds%2bcWapLH6qeCvAeD1;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54qT4bw38KudSKRp559kB2Zw%3d%3d;> NIIT Technologies Ltd.: Soft quarter, inexpensive valuations help keep the faith<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=xQymAnPcdGk%3d&fName=%2fFriPPoLxfKpnit8CoyHiFRh0znAc6nVZaSkItuKCtxnJ4VidZXnnNA7jZt6DXNM;%2fFriPPoLxfKpnit8CoyHiFRh0znAc6nVZaSkItuKCtyp%2bXcWfKGoE8V4xSVkGcXi;%2fFriPPoLxfKpnit8CoyHiFRh0znAc6nVIGSa%2bsTrvj3zfFI7GhXapw%3d%3d;> IT Services; Continental Europe: Doors opening up<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=MoIATfSuam4%3d&fName=l1iUqIq16D3q%2bAnoS74EJLucm3hasCkbHATw1NBWqbpFwwfd%2bd%2f9UQ%3d%3d;l1iUqIq16D3q%2bAnoS74EJLucm3hasCkbEhp2owlNRWu%2fQrtc9HOHaQ%3d%3d;l1iUqIq16D3q%2bAnoS74EJCV9ysqD8C21YwMzxqfweWc%3d;> NIIT Technologies Ltd.: Inline performance, retain ACCUMULATE <http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=%2fnzumlvGs%2fQ%3d&fName=%2fFriPPoLxfJEmrs3PTIX0CIX7dtpUbfh4dc43EWWDEjZR9EpJwSj63GV7Q%2bQX5TK;%2fFriPPoLxfJEmrs3PTIX0CIX7dtpUbfh4dc43EWWDEgbSJasmku31tc%2bGjPSdzOK;%2fFriPPoLxfJEmrs3PTIX0CIX7dtpUbfhCSjluPcVkTJslHhSVcvBkg%3d%3d;> IT Services; In the pink of health<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=FUP3RAMkpYA%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54S7ilKpWKxTOC2rk5MZkTHDGV6XgF%2fmba;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54S7ilKpWKxTNrBu4iVqE67KxCgSOgqzOt;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54X4GUYQ40%2bDpy1ZciRjf3tQ%3d%3d;> NIIT Technologies Ltd.: Inline show, retain +ive view on inexpensive valuations<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=fexXD0M8TSE%3d&fName=%2fFriPPoLxfJb1zqr3LNF6lTGgYEYZJy9RoVRUoQ07DIkkfB8hUB8j%2bRbyfbfSpOu;%2fFriPPoLxfJb1zqr3LNF6lTGgYEYZJy9RoVRUoQ07DLtDVEVv3N1BVjX2H928ieh;%2fFriPPoLxfJb1zqr3LNF6lTGgYEYZJy9RgxWYFS8%2biLAjNh7hFcG3Q%3d%3d;> IT Services; Realigning EPS est to revised currency assumptions<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=cS78TMgrnEY%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54JFJff%2fs0djxwBwehl2vJFYypeZxwl9Mp;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54JFJff%2fs0djzhslkY8ZmzMtK7IiYhgfnv;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54JFJff%2fs0djwcsBmZ5VS0Vg%3d%3d;> NIIT Technologies Ltd.: Inline op performance, PAT miss on forex losses<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=Kj%2bwNRWTYK0%3d&fName=%2fFriPPoLxfIfFGd750JwteThmDLh9GYJA9xjBwSGHXH9I4gzBmrRAQ%3d%3d;> IT Services; US Immigration Bill: Requires tweak to business model<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=SMf5Yr1CxU8%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54MiGlycBBDIBn34cPbvOtYDtICunHn1uV;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54MiGlycBBDIAXd6BrwC4DGe3GePgIiHbZ;3F30kqZQrKpJMFdT66cfDlaX2jUy3D54MiGlycBBDICZC6Z6%2bLTTnA%3d%3d;> NIIT Technologies Ltd.: Inline revenues, profit beat driven by forex gains<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=HoQmRe3zvt0%3d&fName=%2fFriPPoLxfJLzop3wm1VzRpQISXyBMbqHtihZdTu1ZruiCg44mSM1zJW1NrKXddu;> IT Services; Sound Strategy<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=tEUGK3MZjPw%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54oFv0lAQ%2f6HzvrE2j7w5%2fiQ%3d%3d;> NIIT Technologies Ltd.: Inline results, retain ACCUMULATE<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=Dyy%2fArHt3gc%3d&fName=%2fFriPPoLxfJLzop3wm1Vzd%2feW05OeLrPI2R8DZFiCH%2bZ%2fYuXjFdueG8YJjPNeE65;> IT Services Sector Update; Earnings upgrades led by lower currency assumptions<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=anAkWLQMiAw%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D544hvbfzh7kEWttoEDsUp0Kw%3d%3d;> NIIT Technologies Ltd.: NIIT Technologies Initiating Coverage; Value beckons, Initiate with ACCUMULATE; Target: Rs250<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=PC2sYi6FIXs%3d&fName=%2fFriPPoLxfJLzop3wm1VzaqW4hAV4MSFWz7X%2fyqd3WppK0nBsWuBvlC73yjbkJ3k;> IT Services Sector Update; Trimming estimates for Tier II coverage<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=5xGhtTfnpgY%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54PB%2bGM0HPdBnRMrfa6E%2fl3w%3d%3d;> IT Services Sector Update; Cutting estimates to factor in worsening macro<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=SjzhGn4khRE%3d&fName=3F30kqZQrKpJMFdT66cfDlaX2jUy3D54MTj4%2fisaPr01LyeOUKaepg%3d%3d;> NIIT Technologies Ltd.: On the improvement trail<http://research.emkayglobal.com/ResearchDownload.aspx?Cid=RTzaoVF%2bg7U%3d&typ=APSSeVhmQ%2b8%3d&Pid=BA%2fjYnogfZI%3d&fName=%2fFriPPoLxfKLHRvUf2dtO1snwMCwsXWrweu6ZEL3rT5P9Zhjblms2sLpLdqCzwZP;%2fFriPPoLxfKLHRvUf2dtO1snwMCwsXWrweu6ZEL3rT6tpLgBn%2bNr4bFIbGSLjFsC;%2fFriPPoLxfKLHRvUf2dtO1snwMCwsXWrU0KzPZ5rgPuyz8VULe4obQ%3d%3d;> *Click here to read report:* *Result Update <http://emkayglobal.com/downloads/researchreports/NIITTechQ3FY14ResultUpdate.pdf>* Thanks & Regards, Emkay Equity Advisory | *Emkay Global Financial Services Ltd.* | www.emkayglobal.com 7th Floor, The Ruby, Senapati Bapat Marg, Dadar (W), Mumbai– 400 028| Board No.: +91-22-66121212 | Fax : +91 22-6612 1299 -- CA. 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