EPS guidance at Rs 30 for FY11: EdServ Softsystems

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EPS guidance at Rs 30 for FY11: EdServ Softsystems

Dainik Jagran is the latest media house to buy stake in Chennai-based education and placement firm EdServ Softsystems. In May, HT Media and BCCL, each bought stake of about Rs 10 crore and Rs 15 crore respectively, said S Giridharan, chairman and CEO, EdServ.

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Dainik Jagran is the latest media house to buy stake in Chennai-based education and placement firm EdServ Softsystems . In May, HT Media and BCCL, each bought stake of about Rs 10 crore and Rs 15 crore respectively, said S Giridharan, chairman and CEO, EdServ. "Rs 10 crore equity warrants have been issued to the Jagran group that takes the obligation based investment into the company to Rs 35 crore," he said.

The company has expansion plans and is looking at a pan India growth. He also added that their EPS guidance for the year is Rs 30 and sees no further dilutions in the foreseeable future.

Below is a verbatim transcript of his interview with CNBC-TV18's Reema Tendulkar and Ekta Batra. Also watch the accompanying video for more.

Q: Tell us about Dainik Jagran and HT Media picking up a bit of stake in the company? How much has each one of them picked up, what does the holding stand at currently and how much was it for?

A: Our committee met on November 22 and approved issue of warrants to Dainik Jagran for a value of Rs 10 crore. This is apart from what has been approved for HT Media and BCCL which is about Rs 10 crore and Rs 15 crore respectively. Together, that takes the obligation based investment into the company to Rs 35 crore.

This is part of our overall expansion plan for which we had raised funds. With this, we plan to go pan India on a very aggressive campaign mode because two of our business models, one is the online learning and placement portal and the other is the vocational skill training, requires that we are present nationwide.

Q: The dilution on account of this fundraising is quite substantial, nearly 22%. What's your EPS target for this year and next year on the diluted base?

A: 22% dilution is only because of the QIP which we completed sometime back. This will be more of a warrant which we will be converting over a period of 18-months. Our EPS guideline will stay at Rs 30 for this year because it is only the QIP that dilutes.

We have paid up Rs 15.5 crore which is not going to change any more and there will be no more further dilutions in the immediate future. As far as this year is concerned and 2010-11, our EPS guideline stays at Rs 30 and we are confident of achieving that.