NIIT 99/00 net seen rising 43-52%

Arif Sharif

NEW DELHI: Indian computer education and software services firm NIIT Ltd. is

likely to post a 43-52 per cent jump in net profit for the year ended September

30, analysts said on Friday.

But NIIT's projected profit increase pales in comparison with results from

some other firms in India's fancied software sector.

Analysts said the profit growth was expected to stem mainly from its

expanding software development business and, to a smaller extent, from

education.

The firm is scheduled to announce its results on Monday.

"We project a 51.7 per cent net profit increase to Rs 2.17 billion

($46.7 million) on sales of Rs 7.5 billion," said Sanjay Satpathy, an

analyst at Mumbai-based First Global Stockbroking.

He forecast software development revenues to grow 50 per cent and training by

25 per cent.

NIIT posted a net profit of Rs 1.43 billion on sales of Rs 5.84 billion in

1998-99 (October-September).

An analyst at Kotak Securities said he expected earnings from software

development to grow 62 per cent, while education would rise 19 per cent.

The analyst forecast a net profit of Rs 2.15 billion.

Consensus estimates in a Reuters survey of nine brokerages released last week

forecast a 42.8 per cent rise in net profit to Rs 2.04 billion.

The survey found sales were expected to rise 27.9 per cent to Rs 7.43

billion.

The firm's net profit in the nine months ended June 30 grew 49 per cent to Rs

1.33 billion, while sales rose 26.9 per cent to Rs 5.35 billion.

The company has a lot to strive for: some companies in the software sector

are achieving profit growth of over 100 per cent despite indications of a

slowdown in global technology spending.

Sector leader Infosys Technologies Ltd. on Tuesday unveiled a 122 per cent

jump in net profit for the first-half ended September 30, and heavily traded

Satyam Computer Services Ltd. posted a 107 per cent net profit jump for the same

period.

NIIT's shares were Rs 38 down at Rs 1,225.25 in Friday afternoon trade, after

hitting a 2000 low of Rs 1,183 in the morning, following an overall market

decline.

The benchmark Bombay index was down 1.7 per cent at 3,782.09 in the

afternoon, off a 16-month low of 3,714.46 in the morning.

NIIT is 68 per cent off its 2000 peak of Rs 3,800 reached on January 4.

Analysts said they did not expect NIIT's results to move its share price

since current poor market sentiment was a more powerful influence.

Global investment bank Goldman Sachs in a report published last month rated

the firm as a market performer.

(C) Reuters Limited 2000.