Bonanza neutral on Core Projects & Technologies

“Core Projects & Technologies (CPTL) reported 17.5% growth in net sales to Rs 220 crore in Q1FY11 compared to Rs 187 crore in the corresponding quarter a year ago. This was primarily on account of high growth in EOU Development segment. This segment posted a growth of over 230% to Rs 115 crore in its gross revenue over the review period. Sales contribution from this segment increased from 16% in Q1FY10 to 48% in the first quarter. Earnings Before Interest & Depreciation (EBITDA) increased over 50% to Rs 80 crore in first quarter as against Rs 52 crore in first quarter a year ago. EBITDA margin improved to 36.3% in Q1FY11 compared to 28% in Q1FY10 – an increase of over 8 percentage points.”

“Core Projects & Technologies is one of the largest education companies from India. The company has expanded through inorganic route to become an integrated player with products & solutions offering across the value chain from K-12 education to higher education to vocational education. With good order book position, plans for acquisition and new school management business in India; company is positively looking out for business growth. At CMP of Rs 260, CPTL trades at a P/E of 14.7x on FY11E EPS of Rs 17.7. We initiate the coverage on Core Projects with a neutral view,” says Bonanza.
   
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