NIIT 1999-00 net up 56.9%

By : |October 16, 2000 0

MUMBAI: Indian computer education and software firm NIIT unveiled a 56.9 per
cent rise in net profit for 1999-2000 (October-September) on Monday, beating
market expectations.

The company’s stocks are likely to be boosted by the results, analysts said.
NIIT said net profit rose to Rs 2.24 billion ($48.33 million) for the year ended
September 30 from Rs 1.43 billion in the year-ago period, while net sales rose
to Rs 7.50 billion from Rs 5.81 billion. The firm said its board of directors
had recommended a dividend of Rs 4.25 for the year.

Analysts had expected the firm to post a net profit growth of 43-52 per cent.
A Reuters poll of nine brokerages released two weeks ago had forecast a 42.8 per
cent rise in the firm’s net profit to Rs 2.04 billion.

The fourth quarter net profit rose to Rs 908.2 million, up 70.65 per cent
over the previous year’s Rs 532.2 million. Net sales rose to Rs 2.15 billion
compared to Rs 1.60 billion.

"Profits in the last quarter are better than expected. There could be
two reasons for this, a ramp-up in NIIT’s software business or cost-cutting and
margin expansion," said Birla Sun Life Securities analyst Amit Khurana.

But sales growth was a little low, he said.

Sandeep Dhingra, analyst with Chase JF said he expected the stock to rise on
the results.

"I would expect that software which was an area of concern, has done a
little better than anticipated," he said.

The stock was Rs 97.35 ($2.10) higher at Rs 1,307.50 on a volume of nearly
100,000 shares. The 30-share Bombay index was 2.46 per cent higher at 3,831.03.

NIIT’s profit growth is lower than some of its industry peers though the firm
is strictly not a software services and solutions firm. Education still accounts
for nearly 50 per cent of its worldwide revenues.

Last week, software firms Infosys Technologies and Satyam Computer Services
Ltd. reported net profit growth of 122 per cent and 107 per cent respectively
for the first half ended September 30, 2000.

NIIT shares ended Friday at Rs 1,210.15 on the Bombay exchange, down Rs 53.10
from its previous close.

(C) Reuters Limited 2000.

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