Recent Price Movement and Market Context
On the day in question, NIIT Ltd’s stock price fell by 3.95%, underperforming the IT - Education sector which itself declined by 2.92%. The stock touched an intraday low of Rs.81.25, representing a 4.84% drop within the session. This marks the third consecutive day of losses for the stock, which has delivered a cumulative return of -10.79% over this short period. Notably, NIIT’s share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.
In comparison, the Sensex index also experienced a decline, falling 527.06 points or 0.8% to close at 82,908.25. Despite this, the Sensex remains within 3.92% of its 52-week high of 86,159.02, highlighting a divergence between the broader market’s relative strength and NIIT’s weakening position.
Long-Term Performance and Valuation Concerns
Over the past year, NIIT Ltd’s stock has depreciated by 52.92%, a stark contrast to the Sensex’s positive return of 7.12% during the same period. The stock’s 52-week high was Rs.178.60, underscoring the magnitude of the decline. This underperformance extends beyond the last year, with the stock lagging the BSE500 index over the last three years, one year, and three months.
NIIT’s current Mojo Score stands at 17.0, categorised as a Strong Sell, an upgrade from its previous Sell rating as of 16 Jun 2025. The company’s Market Cap Grade is rated at 3, indicating a relatively modest market capitalisation compared to peers. The downgrade in Mojo Grade reflects deteriorating fundamentals and valuation concerns.
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Financial Performance Highlights
NIIT Ltd has reported negative results for the last three consecutive quarters, reflecting ongoing pressures on profitability. The Profit Before Tax excluding Other Income (PBT LESS OI) for the most recent quarter stood at Rs. -8.60 crore, a decline of 47.51% compared to the previous period. Similarly, the Profit After Tax (PAT) for the quarter was Rs. 2.16 crore, down by 83.3%, signalling a sharp contraction in net earnings.
The company’s net sales have contracted at an annualised rate of -15.74% over the past five years, while operating profit has deteriorated by -214.66% during the same timeframe. These figures highlight a sustained decline in core business performance and profitability.
Liquidity and Efficiency Metrics
NIIT’s Debtors Turnover Ratio for the half-year period is notably low at 0.64 times, indicating slower collection cycles and potential challenges in managing receivables efficiently. Despite this, the company maintains a low average Debt to Equity ratio of 0.0, suggesting minimal reliance on debt financing and a conservative capital structure.
Risk and Valuation Considerations
The stock is currently trading at valuations considered risky relative to its historical averages. Over the past year, while the stock price has fallen by 52.92%, the company’s profits have declined by 24.4%, indicating that the market has priced in a significant portion of the earnings deterioration. This valuation gap reflects investor caution amid the company’s financial trajectory.
Institutional Holdings
Institutional investors hold a substantial 22.97% stake in NIIT Ltd, a factor that may influence the stock’s trading dynamics. These investors typically possess greater resources and analytical capabilities to assess company fundamentals compared to retail participants.
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Sector and Broader Market Comparison
The IT - Education sector, to which NIIT belongs, has also experienced a decline of 2.92% on the day, reflecting sector-wide pressures. However, NIIT’s underperformance relative to its sector peers is notable, with the stock falling 1.6% more than the sector average on the same day. This divergence underscores company-specific factors contributing to the stock’s weakness.
Summary of Key Metrics
To summarise, NIIT Ltd’s stock has reached a new 52-week low of Rs.81.25, down from its 52-week high of Rs.178.60. The stock’s recent three-day losing streak has resulted in a cumulative decline of 10.79%. Financially, the company has reported negative quarterly results consecutively, with significant declines in PBT and PAT. The long-term sales and operating profit trends remain negative, while liquidity metrics such as the Debtors Turnover Ratio are below par. Despite a low debt profile, the stock’s valuation is considered risky relative to historical norms. Institutional holdings remain relatively high at 22.97%, indicating continued interest from larger investors.
These factors collectively explain the stock’s current position at a 52-week low and its classification as a Strong Sell by MarketsMOJO, reflecting the challenges faced by NIIT Ltd in recent periods.
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