NIIT has forecasted 40% of revenue contribution from e-commerce by FY02. This was revealed in a leading financial daily.
NIIT commenced operations in 1981, as an infotech (IT) training company to become the ninth largest (in terms of revenues) computer-training institute in the world. It is India's leading IT trainer with 45% market share, training approximately 100,000 students every year. It plans to move up the IT value-chain by developing software products. Currently the company has a presence in 30 countries and operates through 18 fully owned subsidiaries.
Currently, e-commerce contributes 15% of the NIIT's revenues. The company offers on-line multimedia education courses, which forms the main source of e-commerce revenues.
Earlier, in a strategic move, NIIT had decided to move up the IT ladder and focus on product development. Currently, developing e-commerce applications is high on the company's agenda. For the future, the company has forecasted a steady stream of revenues from development of e-commerce infrastructure for other companies.
Last month, NIIT became one of ten companies in the world to bag the SEI-CMM Level 5 accreditation. This will boost the company's image in international markets and it will find it easier to compete with global software majors in bagging projects. However, given the fact that the company has little experience in developing e-commerce applications, competing with other international companies will be a difficult task.
NIIT has earmarked US$ 100 m for entering into joint ventures and/or acquiring companies in global markets. To build up expertise in e-commerce, it may acquire/tie-up with a company with specialisation in e-commerce applications. This will also enable the company to market its products more effectively in international markets.
Analysts have mixed feelings about the company. A section opine that the company's valuations are too high, and have recommended a 'HOLD'. Another section are of the view that given the company's potential, its valuations could get better and have flagged it as a 'LONG TERM BUY'.
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