Shares of a small-cap IT company rallied 20 percent on Tuesday to hit an intraday high of ₹ 140.75 apiece on the National Stock Exchange (NSE). Its shares were locked in a 20 percent upper circuit.
In the past five days, the company’s share price has risen by nearly 70 percent from ₹ 83.00 to ₹140.75. Experts believe that the share price reacted sharply to the positive commentary given by Rajendra Singh Pawar, the chairman and co-founder of NIIT Ltd.
NIIT is an information technology services company that is engaged in providing skills and talent development solutions to individuals, enterprises and institutions.
NIIT’s management has set an ambitious target of achieving revenues of Rs 1,200 crore by FY27-28, according to a report by CNBC TV-18. To give perspective, the company reported revenue of ₹ 341.25 crores in FY23 and 250.62 crores in FY22.
Pawar highlighted the company’s strategic shift towards exploring new sectors to address evolving skill needs in the job market.
“We don’t see a very big uptake in new jobs in the near term. But we see the need for change in skills. We are looking for the horizon for new sectors that are emerging in this country right now,” he said.
He explained that the company is looking at newer sectors to make new offerings as India is poised for growth on multiple dimensions and that work is in progress.
NIIT commands a market capitalization of ₹ 1,577 crores and is a small-cap company. It has a low return on equity of 1.79 percent and an ideal debt-to-equity ratio of 25.46. Its shares were trading at a price-to-earnings ratio (P/E) of 33.76, which is higher than the industry P/E of 25.46, indicating that the stock might be overvalued as compared to its peers.
As per its latest shareholding pattern, retail investors hold a 35.13 percent stake in it, followed by its promoters with 34.84 percent, foreign institutions with 21.09 percent and mutual funds with 8.70 percent.
Written by Simran Bafna
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