NIIT share price surges about 56% in September so far; should you buy? Here's what experts say

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₹1,200 crore by FY27-28. The confidence stems from the belief that the IT sector which is poised to grow strongly has its focus on reskilling as a critical priority and NIIT is well-positioned to absorb the benefits and expand its business into emerging sectors through organic as well as inorganic growth. The company has cash reserves of ₹700 crore, which it has earmarked for potential mergers and acquisitions.

However, at the current price levels, the analyst believes that it would be prudent to be on the sidelines as most of the positives are already priced in and one should await execution from the company side and keep a close eye on the IT sector hiring trends for making a further investment decision. NIIT underwent a demerger from NLSL last quarter. Q1FY24 revenue increased by 4 per cent year-on-year (YoY) aided by contributions from early career segments.

It expects a strong ramp-up in Q2 and aims to achieve a positive EBITDA margin by the end of FY24E. The company is investing in products to equip people with AI (artificial intelligence) skills which will enhance their productivity and have a positive impact on IT jobs. It is also exploring opportunities in supply chain management and new manufacturing services.

Management is aiming to achieve revenue of ₹1200 crore (organically and inorganically) and stabilize EBITDA margins at 15-20 per cent by FY27E-28E. "The stock ramped up recently due to huge trading volumes. I believe the company is poised for growth and investors should stay invested for medium to long term and keep buying on dips depending on the company's performance as targeted," said Vinchhi.