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
- EV/EBITDA: 12.19
- EV/Share: Rs 178
- EV/Sale: 2.46
- Market Cap/ Sale: 2.5
- Debt to Equity: Nil
- 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.
