This profitable Edtech company stock delivered 4X returns in 2 years!
NIIT Ltd is engaged in the business of providing outsourced corporate learning and development services. We can consider NIIT as an Edtech for corporates.
In the last two years, NIIT Ltd, an S&P BSE Small-Cap firm, has provided multibagger returns to its shareholders. On July 13, 2020, the shares of NIIT Ltd were trading at Rs 94. Two years later, on July 13, 2022, the stock increased to Rs 405 in value.
NIIT Ltd is engaged in the business of providing outsourced corporate learning and development services. NITT Ltd has two business segments: corporate learning and skills and career. The company also operated a school business, which it closed in FY 2019-20 due to a lack of profitability.
The company's financials have grown significantly since that time. The company saw a compounded sales growth of 17 per cent, going from Rs 865 crore to Rs 1377 crore. Net profit increased from Rs 86 crore to Rs 226 crore during the same period.
The company’s client base also showcased an increase from 8 clients in 2011 to 58 clients in 2022. Some of the company’s clients include Shell, SAP, DELL, Bank of America, and Unilever.
In terms of the industry, global corporate training spending is estimated to be USD 370 billion (Rs 29,45,940 crore). Only 250 of the Fortune 1000 companies outsource their training. Hence, the corporate training outsourcing industry has enormous growth potential.
Corporate training outsourcing enables businesses to turn their fixed cost payroll of a sizable staff of in-house trainers into variable costs. As a result, businesses can keep flexibility regarding the number of in-house trainers during both expansionary and contractionary phases of the business cycle.
The company's rapid growth is expected to continue in the future. However, in the short term, one should be cautious about the potential eurozone slowdown, as Europe accounts for the majority of NIIT Ltd.'s revenue.
On July 13, at 3:20 pm, the shares of NIIT Ltd are trading at Rs 404.8.