Educomp Solutions Q4 PAT up to Rs 55.35 cr

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Educomp Solutions has announced its Q4 and FY09 numbers. Its Q4 consolidated revenues increased to Rs 226.45 crore versus Rs 124.75 crore and profit after tax, PAT was up to Rs 55.35 crore from Rs 31.70 crore, YoY.
 
In the FY09, its consolidated revenues were up to Rs 637 crore as against Rs 286.08 crore and PAT went up to Rs 132.73 crore versus Rs 70.56 crore. Its OPM (operating profit margin) improved to 49% from 45.3%.

Highlights
-Growth led by Smart Class, added 258 schools in Q4, total now 1730 schools till date
(50% of revenues)
-EBIT margins in the ICT (information and communication technology) business are down from a high of 34.7% in Sep-08 quarter to 19.4% in Mar-09
-Margin fall due to greater hardware sale and increased pricing pressure in contracts signed through 2HFY08 and 1HFY09 ((ICT co has implemented ICT in more than 12,000 schools till date and has ~50% market share))
-Q4 saw a loss in the Retail and Consulting on the back of the conversion of Mathguru into a free website
Roots to Wings, is present in 169 centres while Eurokids has more than 450 pre-schools

Smart Class
-FY09 Revenue at Rs 315.67 crore versus Rs 126.79 crore, PBIT at Rs 186 crore versus Rs 73.13 crore
-Q4 Revenue at Rs 110.72 crore versus Rs 50.28 crore, PBIT at Rs 63.45 crore versus Rs 30.92 crore

Edureach (Formerly ICT) ((Govt Schools)
-FY09 Revenue at Rs 113.73 crore versus Rs 93.32 crore
-Q4 Revenue at Rs 55.8 crore versus Rs 54.56 crore, PBIT at Rs 10.83 crore versus Rs 16.29 crore

Retail and consulting
-FY09 Revenue at Rs 178.9 crore versus Rs 40.34 crore
-Q4 Revenue at Rs 9.99 crore versus Rs 6.69 crore, Loss of  Rs 2.24 crore versus profit of Rs 3.6 crore

Professional Development 
-FY09 Revenue at Rs 28.6 crore versus Rs 25.62 crore
-Q4 Revenue at Rs 7.36 crore versus Rs 6.58 crore, PBIT at Rs 4.5 crore versus Rs 4.52 crore versus Rs 4.23 crore

Outlook
-FY2010 consolidated profit guidance at Rs 200 crore +
-Plans to hive off its vocational and preschool businesses into a separate subsidiary
-Significant capex ahead in K12, and Smart Class still growing rapidly (implies further cash requirement),

Order book Outlook
-Management guidance is adding 1000+ schools by the end of FY10 for Smart Class '
-Expect Smart Class to turn FCF positive in FY10.
-Guided to add 5,000 schools in ICT for FY10.
-Intends to have presence in >1,000 pre-schools in the next two years
-K 12 segment has visibility for 20 more schools in FY10.

Raffles JV:
-Another Raffles JV school to be operational in Bangalore by July2009
-Negotiations are underway for acquisition of Raffles, Mumbai.

50:50 JV with Pearson
-Pearson would be pumping in $17.5 million in the JV
-Both companies are likely to invest an additional $20 mn in the next 5 years in the new business
J-V will provide vocational training to students and professionals across a range of industries

Debt, capex and cash -
-Debt was Rs900 cr (including FCCBs) against net worth of Rs 400 crore. Cash and equivalents were Rs190 crore
-Capital raising is another key factor to watch for