Financial Daily from THE HINDU group of publications
Thursday, Feb 12, 2004
Financial Daily from THE HINDU group of publications Thursday, Feb 12, 2004 |
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Markets
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Stock Markets Info-Tech - Stocks Business restructure seen driving NIIT up Veena Venugopal
Mumbai , Feb. 11 THE stock of NIIT Ltd has been steadily climbing up in the expectation of the business restructure being completed by March. NIIT had announced in October that the software solution business would be spun off as a separate company, to be listed in the stock exchanges. This is being done to attain greater focus and flexibility in both lines of business. The stock has grown by over 53 per cent from September, outperforming the BSE IT Index by more than 6 per cent. It touched a high of Rs 214.90, before closing at Rs. 212.90 today. According to Mr Aman Chowhan, TAIB Securities, the company expected a turnaround last year as campus recruitment of IT professionals had picked up after the slump. But the top line of the company did not improve as students opted for short-term courses and not the high margin GNIIT course. Education is a high leverage business and when demand for the long-term courses picks up, the bottom line will improve dramatically, he said. Education business is slow to respond to economic upturns but the company is on the right track, according to Mr Chetan Shah of Quantum Securities. The stock slipped last week after the company reported an unexpected marginal pre-tax loss of Rs 4.8 crore. Brokers seem to be bullish on the stock. They feel that the restructure is the necessary attempt at setting things right and the stock will steadily creep northwards till the final announcements of the restructure are made. They also speculate that the new structure might result in the software solutions business being acquired by HCL Technologies Ltd.
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