STRONG BUY NIIT

It was an extremely volatile triple witching day. Strong global cues and continued short covering helped the markets tide over expiry jitters. Nifty closed at 4,316 up 63 points, while the Sensex shut shop at 14,422 up 202 points.

Harit Shah of Angel Broking is positive on NIIT.

Here's how Harit Shah views the stock:

On NIIT:

NIIT is the largest IT training company in the country. They have grown at a very rapid rate alongwith the IT industry for the past 2-3 years and they have tracked that industry with a lag. So, that business is growing at 25-30%.

Going forward, they are also taking a lot of new strategic initiatives to get into other sectors, such as financial services and management training. It is in a nascent stage but they have the potential to grow at about 100% over the next two-three years.

They have also managed to renew their focus on the government schools business. In this particular sector, the penetrations levels are very low. There are players like Educomp also operating this particular space but NIIT can grow at 25-30% because of their renewed focus. They had a bit of a problem in FY07 but since then the government had become more transparent in terms of awarding of the tenders and paying back the dues on time. So that particular business is also timed for good growth.

The company can grow at about more than 30% earnings CAGR over the next couple of years. On that basis, we do have a target of about Rs 123 on that stock.