NIIT, Aptech surge over 10% on heavy volumes, hit multi-year highs

Shares of information technology (IT) training services companies NIIT and Aptech rallied more than 10 per cent on the BSE in intra-day trade on Tuesday, in an otherwise range-bound market, on the back of heavy volumes. These stocks were trading at their multi-year high levels on the bourses.

Among the individual stocks, NIIT rose 17 per cent to hit an over 13-year high of Rs 295.50 on the BSE in intra-day trade on Tuesday. In the past three days, the scrip has rallied 49 per cent after the company reported a healthy set of March quarter (Q4FY21) numbers. The stock was trading at its highest level since August 2007. The trading volumes on the counter jumped five-fold with a combined 12.33 million shares having changed hands on the NSE and BSE till 12:29 pm. In comparison, the S&P BSE Sensex was down 0.20 per cent at 52,222 points at the same time.
 

In Q4FY21, NIIT’s revenues increased 9 per cent quarter-on-quarter (QoQ), up 30 per cent year-on-year (YoY), to Rs 275.5 crore. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin improved from 18.4 per cent in Q3FY21 to 24.9 per cent in Q4FY21 on account of 570 bps QoQ improvement in corporate learning group (CLG) and profits in the skills & careers group (SNC). Profit after tax increased 11.3 per cent QoQ to 51.3 crore.

The company recorded an exceptionally strong quarter of revenue growth and profitability owing to sustained business development, digital transformation and optimised business operations. The management said the corporate business continues to accelerate. The investment in the digital transformation of the business has created new opportunities for growth and improvement in profitability, it added.

Commenting on the impact of the Covid-19 pandemic on the business, NIIT said the company has been able to arrest the impact partially due to agile and decisive actions including acceleration of the transition to digital. Given the increase in adoption of digital learning, the company has achieved revenue and EBITDA levels higher than last year, it added.

Meanwhile, shares of Aptech surged 14 per cent to Rs 273 on the back of a six-fold jump in trading volumes. A combined 4.8 million shares have changed hands on the NSE and BSE so far. The stock of Rakesh Jhunjhunwala and family-owned company has rallied 29 per cent in the past three trading days. It was trading at its highest level since June 2018.

“The ‘Digital Pivot’ implemented by the company mitigated the pandemic’s impact to a great extent and the cost rationalisation initiatives ensured a profitable performance during FY2020-21. These measures would continue to help the company to mitigate the impact from the closure of centres for in-classroom training sessions,” Aptech said in a 2020-21 annual report.

The company further added that the consistent trend of QoQ increase in enrolments seen over FY2020-21 may be at risk due to the second wave seen across the country in the months of March and April 2021. But the expected stabilisation of the Covid case numbers in a couple of months and the restricted use of lockdown as a control measure means the economic impact may be much lesser than last year.

This combined with the upturn in economic activity may translate into a better operating environment and outlook for the company in the coming financial year though the downside risks remain, the company said.