NIIT up on institutional support

NEW DELHI: Shares of computer education and software firm NIIT Ltd. were up

over two per cent in a sideways market on Wednesday on what dealers said was

institutional buying of the stock at lower levels.

At 10:55 a.m. (0525 GMT), NIIT was quoted 2.42 per cent or Rs 36.95 higher at

Rs 1,562, while the 30-stock benchmark Bombay index was 0.78 per cent up at

3,856.58 points.

"There is institutional support on NIIT as it is seen as a defensive

technology stock with a limited downside," said Vijay Bhatia, vice

president institutional sales at Motilal Oswal Securities.

"The share has retraced from the Rs 1,900 levels and is at a price where

a lot of foreign fund buying had happened earlier."

An analyst with a foreign brokerage who declined to be identified, said:

"The current tech sell-off has left NIIT largely unaffected as the

price-earnings ratio for the stock was low compared to others. The defensive

nature of the revenue stream is also preventing a fall."

NIIT has a PE ratio of 27 compared with a PE of 82 for Infosys and 113 for

Wipro. "I see the stock appreciating to Rs 2,000 in a year's time,"

the analyst said.

Software training and education contributed 51 per cent of NIIT's 1999-00

(October-September) revenues of Rs 7.50 billion. The firm has set a target of

adding 1,000 new training centers over the next year in addition to the existing

2,000.

At Rs 1,562, NIIT is 59 per cent below its calendar high of Rs 3,800 struck

on January 4 but is 32 per cent above its low of Rs 1,183 touched on October 13.

(C) Reuters Limited 2000.