MT Educare Ltd

MT Educare Ltd
Education
FV – Rs 10; 52wks H/L – 199.9/100.5; TTQ – 8478; CMP (June 7, 2016) – Rs 180.4,

Market Cap – Rs 718 Crs

Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

 
Equity Capital
Net worth
Long Term
Debt
Total
Sales		 PAT
BV
(Rs)
EPS (Rs)
P/E
Industry
P/E
P/BV
Promoter’s
Stake
Beta
Consolidated 39.82 149 – 287 32.34 37 8.12 22.22 25.93 4.88 42.78 1.18
Standalone 39.82 146 – 244 29.22 37 7.34 24.58 25.93 4.88 42.78 1.18


Valuation Parameters EV 707 EBITDA 58

  1. EV/EBITDA: 12.19
  2. EV/Share: Rs 178
  3. EV/Sale: 2.46
  4. Market Cap/ Sale: 2.5
  5. Debt to Equity: Nil
  6. RoE: 21.67%

India Max Investment Fund has sold 186853 equity shares in May 2016. Its stake in MT Educare now stands at 2.92% down from 3.38%.

 

Bulk Deals

Date Client Transaction Quantity Traded Price (Rs)
21-Mar-2016 Shree Bhuvanakaram Tradinvest Pvt Ltd BUY 199243 171.00
21-Mar-2016 Shree Bhuvanakaram Tradinvest Pvt Ltd SELL 198571 171.18
18-Dec-2015 Ashish Ramchandra Kacholia BUY 258043 166.99
17-Dec-2015 Abhinandan Leasing And Finance Ltd BUY 206204 146.80


Block Deals

Date Exchange Quantity Price Value(Cr) Time
08-08-2014 BSE 500000 128.00 6.4 15:20
05-05-2014 BSE 1762404 95.00 16.74 09:15:51
06-03-2014 BSE 867849 76.25 6.62 15:03
06-03-2014 BSE 867849 76.25 6.62 15:03:09
14-05-2013 NSE 741849 96.15 7.13 14:27

 

  • The business is asset light and has negative working capital, as the company receives fees in advance. This has helped the company scale operations with nearly no debt.
  • 80% of its revenue comes from Maharashtra, where it started, 8% comes from Karnataka and the rest from eight other States.
  • The company derives 45% of its income from the school division (grades 9-12); 35% from IIT-JEE coaching and 17% from CA coaching. The company has launched a new digital-based learning product called Robomate online and through tablets.
  • The company has tied up with 19 pre-university colleges to provide coaching for engineering and medical entrance exams and plans to expand such tie-ups to 30 colleges in two years. These tie-ups help reduce capex needs by utilising the college infrastructure.

Overview:

  • MT Educare Limited is an education support and coaching services provider for students in the secondary and higher secondary school and for students pursuing graduation degree in commerce, preparing for various competitive examinations and undertaking chartered accountancy examinations.
  • The Company conducts commercial training, coaching, tutorial classes and activities incidental and ancillary thereon.
  • It also developed Robomate applications, which provides online access to lecturers through android or windows web-enabled devices and also through pen drives and storage device cards.
  • The Company has tied up with 14 colleges across Karnataka, which provides management services and test preparation services to its students.
  • MT Educare operates in Maharashtra, Karnataka, Tamil Nadu, Gujarat, Punjab and Chandigarh, and Haryana.
  • Some of the Company’s brands include Mahesh Tutorials Commerce, INK, Lakshya, MT Professionals, CPLC and Robomate.

Management:

  • Mr Mahesh Shetty is the CMD
Sr No. Major Non-Promoter % Stake
1 Ashmore Sicav Indian Small-Cap Equity Fund 1.24
2 Grandeur Peak Global Reach Fund 1.33
3 Premier Investment Fund Limited 1.36
4 Grandeur Peak Global Opportunities Fund 1.48
5 Grandeur Peak Emerging Markets Opportunities Fund 1.84
6 Kotak Mahindra (International) Limited 2.52
7 Banyantree Growth Capital II L.L.C 4.52
8 India Max Investment Fund Limited* 2.92
9 Ashish Kacholia 2.99
10 Idbi Trusteeship Services Limited 1.26
11 Chhaya Satyanand Shastri 4.31
12 Avendus India Opportunities Fund III 2.29

*As of May 2016.

Consolidated Financial Trends ~ Amt in Rs Crs

 Particulars FY 16 FY 15 FY 14 FY 13 FY 12 FY 11
Equity Paid Up 39.82 39.79 39.78 39.55 35.17 34.35
Networth 149 126 112 101 57 48
Long Term Debt – – – – – –
Total Sales 287 226 202 157 131 106
PAT 32 30 21 18 13 8
EPS (Rs)(adj.) 8.14 7.48 5.29 4.54 3.33 2.04
Book Value (Rs)(adj.) 37 32 28 25 14 12

 

  • Total Sales grew at a CAGR of 15% whereas PAT grew at a CAGR of 26% over the last six years.
  • Net worth grew at a CAGR of 20.78% whereas BV grew at a CAGR of 20.64% over the last six years.
  • For FY 16, operating margin dipped slightly compared to the same period last year due to higher sales and administrative costs.
  • PAT for FY 15 stood at Rs 29.72 Crs. Depreciation and amortization for the same financial year included a one-time reduction of Rs 5.57 Crs due to change in depreciation policy from WDV method to SLM method and change in useful lives pursuant to implementation of new Companies Act 2013. This created a one-time gain in Consolidated PAT increasing it by Rs 3.88 Crs. Hence adjusted PAT was Rs 25.84 Crs instead of Rs 29.72 Crs.