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Ventura Securities
NIIT (Buy)
Target: ₹243
CMP: ₹132.35
Over the past decade NIIT Ltd. (NIIT) has established itself as a reliable and trusted partner for the training services needs of global corporations. These training services are provided under the Corporate Learning Segment (CLS) vertical and contribute nearly 88 per cent to the overall revenues of NIIT.
Apart from CLS, the company has a Skills & Careers group (SNC) vertical which delivers a diverse range of learning and talent development programs to individuals and corporate learners.
Post COVID, there has been an acceleration towards online learning/training services. This has resulted in a boom in outsourcing of these training needs. NIIT Ltd by virtue of its being a well-entrenched player is expected to be the biggest beneficiary of this outsourcing opportunity. We expect revenues from this segment to grow at a 15.7 per cent CAGR to ₹1,071 crore for the period FY20-23.
The company has identified digital learning for professionals as a new growth driver. While the operating model is all set for take-off, we remain circumspect of the success of this venture given that it is still in its early days. Successful execution would lead to a significant re-rating and remain an upside risk to our estimates.
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