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The Outperformers (91-100)

These companies have been ranked based on their stock's excess return over the Sensex for a five-year period

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Published 2 years ago on Sep 10, 2019 11 minutes Read

HDFC bankIn Outlook Business’ third edition of The Outperformers, these are the companies that have managed to beat the market over a five-year period, creating significant value for their shareholders.

NIIT Technologies

With a geographically diverse profile, NIIT Technologies features among the top 20 Indian software exporters. The tech company’s revenue rose from Rs.23 billion in FY14 to Rs.37 billion in FY19, while its bottomline outpaced its topline growth rate — from Rs.2 billion in FY14 to Rs.4.22 billion in FY19. 

Over the past five years, acquisitions have helped the company strengthen its position in existing verticals or have supported foray into new ones, besides expanding the client base and reducing client concentration. 

It has created a strong standing for itself in the BFSI vertical, which contributes 44% to its revenue. Transportation sector contributes 27% while manufacturing and others make up 29%.

For a year now, NIIT Tech has been following a four-fold growth strategy. It includes: scaling & growing US business, carving out infrastructure management services (IMS) as a separate unit for large deal wins, maintaining leadership position in travel & transport vertical and more emphasis on digital business. It has an orderbook worth $390 million, which is executable over the next 12 months. The company also added 11 new customers (six in the US and five in rest of the world) in the last fiscal. 

Amongst the risks the company faces, the primary one is that it is a medium-scale Tier-II player in the Indian software industry. NIIT has a scale disadvantage vis-à-vis that of larger players in the industry. Analysts value the stock at P/E of 16.0x FY21 EPS. 

HDFC Bank

With a sharp focus on retail lending, private lender HDFC Bank has managed to register strong results over the last five years. Interest earned has zoomed at 5-year CAGR of 19% to Rs.989.72 billion and at the same time the net NPA has remained marginal, increasing from 0.27% in FY15 to 0.39 in FY19. A stable l

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