MT Educare(
listed at NSE & BSE )
Price : Rs
117.65 Date: 23rd Jan 2015
Upside: Rs 230 Time
Frame: 3 to 4 years
MT educare
is in a simple business of coaching school students, CA classes and IIM
entrance examination. For the last 8 years, the company has been consistently
increasing its sales and profits. With the Indian demography, the demand shall
be growing steadily. See the company’s fundamental below.
Return on Equity (
2013 – 14 ) : 20.4 %
|
Return on Capital
employed ( 2013 – 14 ) : 30 %
|
Sales ( CAGR last 5
years ): 20 %
|
Net Profit Growth ( CAGR last 5
years ): 53 %
|
Net Working Capital Cycle (13 – 14
) : negative
|
Operating cash flow
( last 3 years ): 55 Cr
|
EPS CAGR Growth ( last 3 years ): 32
%
|
Current P/E ( TTM ):
17.27
|
MCap to Sales ( TTM
): 2.47 Times
|
MCap to Operating Profit ( TTM ):
9.4 Times
|
The company
has a very good RoE and RoCE. Most importantly the company has a negative
working capital cycle as it collects part of the fees as advance. The company
is cash rich. The company has more than 130 coaching centers in India and
growing which is a big moat. FIIs have more than 10% shareholding with very
little DII stakes. Valuation are very attractive with the MCao at just about 9
times its OP. The EV to ebitda will still be more attractive.
BUY IT
BEFORE OTHERS AS IT IS GOING TO BE A STEADY 25% COMPOUNDER LIKE HDFC BANK/HDFC.
When DIIs start buying, it will surge.
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I will have an interest in the stock
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