Views on Tree House Education & Accessories 2QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on Tree House Education & Accessories 2QFY2016 Results:

"Tree House Education & Accessories' 2QFY2016 results underperformed our estimates on all parameters. Its top-line grew ~15% yoy to ~INR 57cr, mainly due to growth in existing pre-schools and addition of new pre-schools. The company added 73 pre-schools in various cities like Ahmednagar, Goa, Gurgaon, Jalgaon, Noida, and Ratnagiri, during the quarter. The operating profit came in at ~INR 30cr, up ~2% YoY. However, operating margins contracted by 700bp YoY to 52.7%, as the company opened 73 new centres during the quarter, which is the highest ever in the history of the company in a single quarter. The reported net profit grew by only ~1% yoy to ~INR 13cr, due to the poor operating performance. Post the recent correction in the stock price, given the attractive valuation, we maintain our Buy rating on the stock."

Shares of TREE HOUSE EDUCATION & ACCESSORIES LTD. was last trading in BSE at Rs.259.1 as compared to the previous close of Rs. 268.2. The total number of shares traded during the day was 7888 in over 316 trades.

The stock hit an intraday high of Rs. 269.3 and intraday low of 259.1. The net turnover during the day was Rs. 2070550.

Source : Equity Bulls

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