NIIT Learning: Smallcap stock in recovery phase, up 35% in a month; more upside ahead?

From a 52-week low of Rs 304.10 apiece on November 6, shares of NIIT Learning Systems Ltd (NIIT MTS) has climbed 35 per cent in just over a month. One can buy this stock in the range of Rs 412-Rs 408, with a stop loss kept at Rs 390, for targets of Rs 432 and Rs 452, respectively, Systematix Shares and Stocks (India) Limited said today. 

NIIT Learning offers managed learning and strategic consulting services. Systematix said NIIT Learning Systems Ltd, is exhibiting a robust bullish structure, highlighted by a strong bullish candle on the daily chart. The stock has delivered a clean breakout above the neckline of an eight-month Inverted Head-and-Shoulders formation around the Rs 400 zone, backed by a decisive surge in volume, validating the pattern’s reliability and indicating a potential trend acceleration. 

"The price action continues to respect a well-defined higher-top–higher-bottom sequence, while the alignment of key moving averages confirms sustained strength across short-, medium-, and long- term timeframes," Systematix said.  On Thursday, the scrip was trading at Rs 411.55 apiece, down 0.20 per cent.

On the weekly chart, NIIT Learning has already registered 11.85 per cent gain, underscoring strong multi-timeframe confluence, Systematix said calling the risk–reward setup 'attractive'. 

Systematix said the stock offers a favourable buying opportunity in the Rs 412–Rs 408 accumulation zone, with a protective stop loss at Rs 390 and near-term upside targets of Rs 432 and Rs 452.

For the September quarter, the company reported a net profit of Rs 47 crore and sales of Rs 475.70 crore. Ebitda for the quarter came in at Rs 96.60 crore, with Ebitda margin coming in at 20.30 per cent. NIIT MTS added 3 new global Managed Training Services (MTS) clients during the quarter. Additionally, the company maintained its track record of 100% renewals, with 3 contract renewals during this quarter. Further, the company expanded scope of work with 1 large client. The MTS client tally at the end of the quarter stood at 104, bringing revenue visibility to $409 million.