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NEW DELHI: Indian computer education and software services firm NIIT Ltd is
likely to post 33-48 per cent growth in net profit for the third quarter ended
June 30, analysts said.
The rise is expected to mainly come from its growing software development
business and to a smaller extent from education.
"We project a 33 per cent net profit increase to Rs 808 million ($18
million) on sales of Rs 1.87 billion," said ABN Amro Asia Equities (India)
Ltd analyst Supratim Basu.
Basu forecast the company’s software development revenues will grow by 35
per cent and training revenues by 20 per cent.
NIIT posted a net profit of Rs 609.80 million and sales of Rs 1.51 billion in
the three months to June 30, 1999.
An analyst at a European brokerage, who declined to be identified, said
earnings from software development were expected to grow by 50 per cent and from
education by 25-27 per cent.
The analyst forecast NIIT's third-quarter profits at Rs 844 million, a 38 per
cent year-on-year increase for the quarter.
An analyst at another foreign brokerage estimated net profit at Rs 900
million. NIIT is scheduled to announce its third-quarter results on Friday. In
April, it had announced an 84 per cent surge in net profit in the quarter ended
March 31 to Rs 367.7 million and a 20 per cent increase in net sales to Rs 2.10
billion.
But NIIT has over the years grown more slowly compared to some other firms in
India's fancied software sector.
Sector leader Infosys Technologies Ltd. and the heavily traded Satyam
Computer Services Ltd. unveiled on Tuesday net profit jumps of 100 per cent and
95 per cent, respectively, in their first quarters ended June 30.
NIIT's shares were up Rs 5.90 at Rs 2,204.95 in Wednesday afternoon deals on
the Bombay exchange.
The shares are up 50 per cent from their calendar 2000 low of Rs 1,469.40 hit
on April 6, but are down 42 per cent from their peak of Rs 3,800 touched on
January 4.
Analysts said NIIT's results have already been priced in but they expected
the stock to rise as the firm increases the lucrative software services
component of its total business in the future.
NIIT said in April that it was raising the share of software solutions, which
offers attractive profit margins, compared to education in its overall
portfolio.
(C) Reuters Limited 2000.