MT Educare 1QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on MT Educare 1QFY2016 Results:

"MT Educare's 1QFY2016 results outperformed our estimates on all parameters. Its consolidated top-line grew by a healthy ~38% yoy to ~INR 75cr, mainly due to strong growth in coaching business as well as Government Projects segment. For the quarter, the company reported a consolidated operating profit of ~INR 10cr, up 27% yoy. The operating margin contracted by 121bp yoy to 13.6%, primarily on account of higher other costs as the company provided free Samsung tablets/SD cards to its students. The consolidated reported net profit de-grew by ~21% yoy to ~INR 6cr on account of a one-time gain due to change in depreciation policy of INR 3.9cr (on a post tax basis) recognised in the first quarter last year. On an adjusted basis, Net profit grew ~60%.

Going forward, we expect MT Educare to report strong top-line and bottom-line growth in the coming financial years (FY2016E and FY2017E) on back of healthy growth in the coaching business. We expect additional revenue growth from execution of government projects, Robomate product, and tie up with Shri Gayatri Educational Society (SGES) in Hyderabad. Currently, we have a BUY rating on the stock."

Shares of MT EDUCARE LTD. was last trading in BSE at Rs.120.6 as compared to the previous close of Rs. 118.8. The total number of shares traded during the day was 30906 in over 590 trades.

The stock hit an intraday high of Rs. 122.9 and intraday low of 117. The net turnover during the day was Rs. 3719434.

Source : Equity Bulls

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