![Indian Value Investors [IVI]](http://4.bp.blogspot.com/_7a0MuoUL3o4/TOvENYI5m_I/AAAAAAAABrs/5fd8btr2-Qg/S1600-R/Bargain%2BStocks.jpg)
Every Tom, Dick, Harry, Amar, Akbar or Anthony know very well as to which are the best emerging bets in our markets which can give superlative returns in 3-5 years down the line – water management, power, waste management, leisure, education and perhaps nano technology. The Nano has hit the Indian roads with a big bang but entrepreneurs in Bharat may have to struggle hard to commercialize products emerging from the womb of nano technology and investors may have to wait for several years in order to reap the fruits of their money and patience. This is just an indicative list and there could be many more. Anyway, even if one has enviable sector knowledge about various sectors, it would require a hawks eye to spot companies in a bull phase which are capable of gifting us with great returns.
“A recent report by CLSA (Asia-Pacific Markets) estimated that the private education market is worth around US$40 billion. The K-12 segment alone, which includes students from kindergarten to the age of 17, is thought to be worth more than US$20 billion. The market for private colleges (engineering, medical, business, etc.) is valued at US$7 billion while tutoring accounts for a further US$5 billion.”
Against the above background, I started searching for a company operating in the education sector which has reasonably good fundamentals and has been growing smartly over the years. And that’s when I zeroed in on Birla Shloka Edutech Ltd.
Yash Birla Group has always been instrumental in progressive fields of businesses and through Birla Shloka Edutech Ltd., it has forayed into the educational arena.
Birla Shloka Edutech Ltd.is one of the leading company in the field of educational services and has created its own niche through reliable, budget friendly and ethical approaches.
Today the company stands tall with the trust and confidence of its millions of delighted customers who form the backbone of the company’s new product innovations and researched.
Birla Shloka Edutech Ltd. Presently provides end to end solutions in sales and services of various educational products to various educational institutes and government organisations.
Birla Shloka Edutech Ltd have a Market Cap of just Rs.83 crores, came out with an IPO in January 2010 at Issue Price of Rs.50 per share and its quoting at a discount of 28.70 per cent as per today’s LTP of Rs.35.65/= share. The shares of the company are listed only on BSE as of now.
Top line growth for Birla Shloka Edutech Ltd seems to be very interesting – way back in fiscal 2005-06 the total Revenues stood at Rs.1.07 crores and soared to Rs.179.80 crores in 2009-10. Thus, top line CARG for five years ending fiscal 2009-10 stood at 178.42 per cent. Bottom line was not that impressive but was not too bad either –profits grew at a CARG for past 5 years was 75.61per cent. Whilst the company is hardly leveraged backed by reasonably good working capital management, the major problems is Net Profit margins of less than 3 per cent. If the margins improve steadily over years, then probably the company will really do well.
So, what makes you think that it is yet possible to get 50-100 per cent returns from such a scrip. Hard to believe that this is possible! Well, if you read on then perhaps you may very well consider taking a call on this scrip.
Birla Shloka Edutech Ltd has informed BSE that the Committee of the Board of Directors of the Company at their meeting held on October 12, 2010, have allotted 19,94,823 convertible equity share warrants to the below mentioned promoters of the Company, at an issue price of Rs. 68/- each determined in accordance to the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009;
1. Name of the Promoter: Godavari Corporation Pvt. Ltd. - No. of Warrants: 7,00,000
2. Name of the Promoter: Nirved Traders Pvt. Ltd. - No. of Warrants: 7,00,000
3. Name of the Promoter: Shearson Investments & Trading Co. Pvt. Ltd.- No. of Warrants: 5,94,823
There warrants shall be convertible into equal number of Equity Shares within a period not exceeding eighteen months from the date of allotment of the warrants, in one or more tranches.
Now, since markets have a tendency to move much faster and ahead of the future which is way far away, I will not be shocked if the share priceof Birla Shloka Edutech Ltd were to cross Rs.68/= earlier than later. By the way, the shares of the company had peaked to a 52 week high of Rs. 94.95 on 29 June 2010.
“A recent report by CLSA (Asia-Pacific Markets) estimated that the private education market is worth around US$40 billion. The K-12 segment alone, which includes students from kindergarten to the age of 17, is thought to be worth more than US$20 billion. The market for private colleges (engineering, medical, business, etc.) is valued at US$7 billion while tutoring accounts for a further US$5 billion.”
Against the above background, I started searching for a company operating in the education sector which has reasonably good fundamentals and has been growing smartly over the years. And that’s when I zeroed in on Birla Shloka Edutech Ltd.
Yash Birla Group has always been instrumental in progressive fields of businesses and through Birla Shloka Edutech Ltd., it has forayed into the educational arena.
Birla Shloka Edutech Ltd.is one of the leading company in the field of educational services and has created its own niche through reliable, budget friendly and ethical approaches.
Today the company stands tall with the trust and confidence of its millions of delighted customers who form the backbone of the company’s new product innovations and researched.
Birla Shloka Edutech Ltd. Presently provides end to end solutions in sales and services of various educational products to various educational institutes and government organisations.
Birla Shloka Edutech Ltd have a Market Cap of just Rs.83 crores, came out with an IPO in January 2010 at Issue Price of Rs.50 per share and its quoting at a discount of 28.70 per cent as per today’s LTP of Rs.35.65/= share. The shares of the company are listed only on BSE as of now.
Top line growth for Birla Shloka Edutech Ltd seems to be very interesting – way back in fiscal 2005-06 the total Revenues stood at Rs.1.07 crores and soared to Rs.179.80 crores in 2009-10. Thus, top line CARG for five years ending fiscal 2009-10 stood at 178.42 per cent. Bottom line was not that impressive but was not too bad either –profits grew at a CARG for past 5 years was 75.61per cent. Whilst the company is hardly leveraged backed by reasonably good working capital management, the major problems is Net Profit margins of less than 3 per cent. If the margins improve steadily over years, then probably the company will really do well.
So, what makes you think that it is yet possible to get 50-100 per cent returns from such a scrip. Hard to believe that this is possible! Well, if you read on then perhaps you may very well consider taking a call on this scrip.
Birla Shloka Edutech Ltd has informed BSE that the Committee of the Board of Directors of the Company at their meeting held on October 12, 2010, have allotted 19,94,823 convertible equity share warrants to the below mentioned promoters of the Company, at an issue price of Rs. 68/- each determined in accordance to the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009;
1. Name of the Promoter: Godavari Corporation Pvt. Ltd. - No. of Warrants: 7,00,000
2. Name of the Promoter: Nirved Traders Pvt. Ltd. - No. of Warrants: 7,00,000
3. Name of the Promoter: Shearson Investments & Trading Co. Pvt. Ltd.- No. of Warrants: 5,94,823
There warrants shall be convertible into equal number of Equity Shares within a period not exceeding eighteen months from the date of allotment of the warrants, in one or more tranches.
Now, since markets have a tendency to move much faster and ahead of the future which is way far away, I will not be shocked if the share priceof Birla Shloka Edutech Ltd were to cross Rs.68/= earlier than later. By the way, the shares of the company had peaked to a 52 week high of Rs. 94.95 on 29 June 2010.
In conclusion, as I see it, the educational sector is pregnant with tremendous potential and as such one can take calibrated risks in order to make good money by taking a call on Birla Shloka Edutech Ltd with a one year holding horizon in mind.
Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd
