Educomp is at a 2150 Cr market cap as of today when it quotes at Rs. 224. Is Educomp worth this much?
Let's see. FY11 report says they reach 16 million students through 26000 schools.
Searching for millenuim schools in google would fetch a lot of schools which are coming up with the Educomp model. Subsidiaries like Gateforum and Vidyamandir classes are well respected test prep classes. They claim to be the largest CA coaching in India now.
The best thing according to me is this is just at the starting stage. A very few schools have implemented smart teching methods. Education is regarded very important in India (as in aspiring coutries like China, Indonesia, etc). As India become richer, people would not mind spending on education.
The worst thing is that this is heavy competition industry where low capital and low experience is needed to start a similar business.
Lot of IT raids at Educomp offices have brought the share price less than 200, it has mildly recovered now though.
Shantanu Prakash (and Anjlee Prakash) has been holding neat 50% shares and have not pledged any shares. This gives some confidence in the company.
This company makes 1000 Cr revenue. They show 4 segments - School learning systems (the biggest and almost whole of the profits), K-12, Higher learning solutions and Online & Retail. they are making around 400 Cr profits with around 40% NPMs.
600 Cr debt makes us worry a bit.
In all, integrity of the promoters, debt management and focus on the right areas are important for the company to be a good bet. If what happened till now will last, I would rather believe in the management.
As most of the revenue comes from School learning systems - software, equipment and training - if these can bring in 1000 Cr revenue in this fiscal, with a 40% NPM. I guess it is worth more esp as it can grow heavily.
Let's see. FY11 report says they reach 16 million students through 26000 schools.
The best thing according to me is this is just at the starting stage. A very few schools have implemented smart teching methods. Education is regarded very important in India (as in aspiring coutries like China, Indonesia, etc). As India become richer, people would not mind spending on education.
The worst thing is that this is heavy competition industry where low capital and low experience is needed to start a similar business.
Lot of IT raids at Educomp offices have brought the share price less than 200, it has mildly recovered now though.
Shantanu Prakash (and Anjlee Prakash) has been holding neat 50% shares and have not pledged any shares. This gives some confidence in the company.
This company makes 1000 Cr revenue. They show 4 segments - School learning systems (the biggest and almost whole of the profits), K-12, Higher learning solutions and Online & Retail. they are making around 400 Cr profits with around 40% NPMs.
600 Cr debt makes us worry a bit.
In all, integrity of the promoters, debt management and focus on the right areas are important for the company to be a good bet. If what happened till now will last, I would rather believe in the management.
As most of the revenue comes from School learning systems - software, equipment and training - if these can bring in 1000 Cr revenue in this fiscal, with a 40% NPM. I guess it is worth more esp as it can grow heavily.
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