Angel Broking's report on Tree House Education and Accessories"Tree House Education & Accessories (THEAL) is expected to continue to post revenue growth on the back of its growing geographic presence. In the past few years, the company has increased its number of pre-school branches at a rapid pace, ie from 302 in FY2012 to 647 in 1QFY2016 (self-operated branches + franchisees). At present, the company’s branches are concentrated in Maharashtra, with the region accounting for ~40% of its branches. THEAL is now looking at expansion of pre-schools on a large scale and across different regions, with particular focus on the Delhi & NCR region. The company would be adding 150 pre-schools in FY2016. This move, we believe, is a positive step in terms of mitigating the risk of geographic concentration."Outlook and Valuation: "We continue to remain positive on the stock, as we believe THEAL will continue to register robust growth going ahead. The growth would come on the back of consistent expansion of pre-schools and repayment of debt which would boost earnings. We expect the company to report a CAGR of ~26% in the top-line and ~32% in the bottom-line over FY2015-17E. We recommend a Buy rating on the stock, with a target price of Rs 449", says Angel Broking research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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