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JPMorgan bullish on Educomp, target at Rs 1000
Educomp Solutions has in the news off late. After analysts expressed concerns on the company's cash position, it announced a re-structuring programme that would reduce its 'debtor days', the time for receiving due payments, which would free its cash position.
Educomp Solutions , a leading education solutions provider, has been in news of late. The stock has witnessed a lot of volatility post its dismal Q2 results. Shares of Educomp Solutions fell 14.50% to Rs 715.30 on Tuesday, November 10, 2009, from Rs 836.90 on November 5.
After analysts expressed concerns on the company's cash position, it announced a re-structuring programme that would reduce its 'debtor days', the time for receiving due payments, which would free its cash position.
Educomp is changing its 'smart class' model from which it generates majority of its revenues. It is making it an outright buy model from a built, own, operate and transfer (BOOT) model.
Speaking at the India Economic Summit, Shantanu Prakash, Managing Director, Educomp Solutions, expressed the need for for-profit institutions as part of the education system, which have till now been kept on the fringes. "We can trust the private sector to play a role in education."
However, Kapil Sibal, Union Minister for Human Resource Development argued that for-profit institutions had a long way to come in order to create a distinction between profit and surplus. "We cannot have companies that are listed on the stock exchange and have educational institutions and pay dividends to shareholders from the fees that parents pay in their institutions. We cannot allow education to be subject to risk factors."
Find out JPMorgan's outlook on Educomp on the next page...
