NIIT Technologies is turning its corners from the sluggish 2015 financial year where they just reported 9% as their return on equity.

The gross revenues of the business had jumped by 14% compare to last year third quarter, and hardly changed compare to last quarter of this financial year. Operating profits jumped up by 43% compare to last year, and 3% from its last quarter. Profit after tax had jumped up by 54% compare to last year quarter, and 9% from its last quarter. The margins had climbed up by 1% reflecting the management doing a good job and controlling its expenses.

On valuations perspective, we are expecting NIIT Technologies to report its return on equity as 19% for this financial year and continue to report in the range of 17% – 22%. Today NIIT Technologies is trading at 2.24 times to its book value and PE ratio of 12. Last calendar year the stock price had climbed up 58% on its turnaround story and we do not expect such strong growth to continue in next financial year. We think it is still trading at premium price and there is very high probability of stock price to remain where it is or go down rather than going up.

Aziz Dodhiya is the chief investment officer for the Valueoperations funds which operates in the Indian market as an FPI (Foreign Portfolio Investor). We do not offer any personal advice to buy or sell any stocks and the views that are shared by Aziz might not incline to your personal investment strategy and this is the reason we advise to take professional advice before going ahead with our views.