Educomp can give 50-60% appreciation: H Agarwal

Hitesh Agarwal, VP Research of Angel Broking is of the view that Educomp Solutions can give 50-60% appreciation over the next 12 months.

Agarwal told CNBC-TV18, "Educomp Solutions is the largest education service provider in the country. If you look at it, India has a population of over 110 crore and it is increasing by 1% every year. So theoretically 1 crore students are getting added every year. It basically provides services to both the private sector as well as the government segment. It is the largest player in the private segment with about 1,000 schools. But the potential here is huge with an addressable market of over 12,000."

He further added, "Similarly in the government segment, with Public Private Partnership opening up in the education sector, the company is doing well. It currently caters to over 7,300 government schools. The addressable market over here is 9.5 lakh schools. So we are seeing clear potential and growth for this company for the next many years to come. The company has a strong content module. It has over 16,000 modules in 10 languages and 1 lakh pages. So overall we see this company growing at a brisk pace of over 70% on the topline and the bottomline for the next 2-3 years, and strong RoEs. We see the stock appreciating at least 50-60% over the next 12 months."

Disclosure: Analyst doesn't hold the above stock but has recommended the same to his clients.