NIIT Ltd – Valuation “compellingly attractive” by Centrum

We reiterate Buy on NIIT Ltd with a new TP of Rs67 based on a Sum-of-parts valuation with Sep-16E estimates. We think valuations have again become compellingly attractive with the recent decline in stock price (after 1QFY15 results did not meet the high expectations despite EBITDA being up 29.9% YoY). Even without factoring in a sharp recovery in ILS, we find significant upside is possible for the valuation of the core business. With over 70% of current EV being accounted for by the holding in NIIT Technologies, we think that NIIT Ltd’s high-growth business in Corporate Learning Services is undervalued while its ILS recovery can add further upside to our target price.

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