Buy CORE Education; target Rs 311: Firstcall Research

“CORE Education & Technologies provides exhaustive range of products and solutions spanning across all stages of education - K12, higher education and vocational training courses. During the quarter ended, the robust growth of Net Profit is increased by 40.01% to Rs. 749.60 million. During the quarter, the Company changed the name from ‘Core Projects & Technologies Limited to ‘CORE Education & Technologies Limited’’, w.e.f. 17 Aug. 2011. CORE has bagged contract from Gujarat Govt. to implement Computer Aided Learning (CAL) in 3236 Primary Schools for Rs 124 crores. Net Sales and PAT of the company are expected to grow at a CAGR of 24% and 28% over 2010 to 2013E respectively.”

“The company has reported net profit of Rs 749.60 million for the quarter ended on September 30, 2011 as against Rs 535.39 million in the same quarter last year, an increase of 40.01%. It has reported net sales of Rs 3532.22 million for the quarter ended on September 30, 2011 as against Rs 2791.44 million in the same quarter last year, a rise of 26.54%. Total income grew by 26.48% to Rs 3544.91 million from Rs 2802.82 million in the same quarter last year. During the quarter, it reported earnings of Rs 6.78 a share.”

“At the current market price of Rs 275.25, the stock is trading at 9.91 x FY12E and 8.40 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs 27.78 and Rs 32.77 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 24% and 28% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 5.45 x for FY12E and 4.70 x for FY13E. Price to Book Value of the stock is expected to be at 2.02 x and 1.63 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 311 for Medium to Long term investment,” says Firstcall Research report.

Public holding more than 90% in Indian cos

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