NIIT picked up from an early low on Wednesday, rising 2.6% to Rs 143.85, following the company's announcement after trading hours Tuesday that it has acquired an online IT education company .
However, the scrip had to contend with some volatility as it had slipped 1.1% within minutes of commencement of trading to Rs 138.50. It had also reached a high of Rs 144.80 in the mean time.
The scrip clocked high volumes of 622,000 shares on BSE in a little over half-an-hour of trading . Effective from Friday (31 January 2003), trading on NIIT began on the derivatives segment. NIIT is one stock with considerable operator interest.
NIIT has been dogged by a slowdown in the IT education business, a result of the sluggish US economy, over the past couple of years. The scrip hit a 52-week low of Rs 118.55 on 28 October 2002.
NIIT on Tuesday said it has acquired online education company e-Gurucool which offers school tutions over the Internet. NIIT has taken over the content, technology and brand of e-Gurucool. With this acquisition, NIIT has moved rapidly ahead to emerge as a formidable leader in the non-formal education space, it said. It expects to earn Rs 100 crore from this activity by the third year. Commenting on the impact e-Gurucool will have on NIIT, Rajendra S Pawar, chairman NIIT said, NIIT's vast network of centres and pervasive online presence through NetVarsity will be used to offer new educational offerings to a newer segment of students.
NIIT has paid Rs 1 crore to buy the content, technology and brand of e-Gurucool.
At the time of announcing its Q1 ended 31 December 2002 results, NIIT said that the company's strategy in the IT education segment is to launch new products and programmes for existing as well as new segments with a view to consolidate its position in the market. Analysts, however, say NIIT may face tough times in the event of a merger of Aptech with SSI, a much-talked about issue over the last few days.
NIIT has three segments namely - learning solutions, software services and systems integration and product distribution.
For Q1 ended 31 December 2002, NIIT posted a 12% rise in consolidated sales to Rs 162.30 crore (Rs 1.62 billion). However, the loss at the pre-tax level increased due to higher depreciation charges.
Learning solutions posted a 7% rise in sales to Rs 48 crore. However, substantial increase in costs led to an 84% fall in operating profits to Rs 5 million. On the other hand, the software services business recorded a 21% rise in revenues to Rs 100.8 crore (Rs 10.08 billion) compared to the quarter ended 31 December 2001. OP was up 143% to Rs 18.7 crore. However, this represented a 2% fall in sales and a 13% fall in OP on a sequential basis.
BSE Code: 500304
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