CORE PROJECT
 
  

 
 

SHARETIPSINFO >>Research Reports >> CORE PROJECT AND TECHNOLOGIES LTD. (24-03-2009)

 

LISTING
CMP

Rs 53

52 WEEK HIGH/LOW

Rs 311/Rs 34

FACE VALUE
Rs 2
PE RATIO
10.5%
MARKETCAP
Rs 386 CRORE

COMPANY OVERVIEW:
Core Project and Technologies in an IT company with focus on vertical like education, logistic, BFSI, ERP and healthcare. The company has offices in the USA, UK, Africa, Middle East and India, and has delivered over 50 projects to its global clientele. The company followed an acquisition –driven growth strategy with the acquisition ECS, US in 2005. This was followed by string of acquisition in other countries, which helped the company increase its capabilities and acquire client in the Education, BFSI, Logistic and Healthcare space.  

  
RECENTLY ACQUIRED COMPANIES:


COMPANY

COUNTRY

ACQUSITION YEAR

COST OF ACQUSITION

REMARK

1.ECS

USA

FY2006

$0.9 mn

Focus on education. Has agreement with four state governments in USA.

2.WEDA INFO TECH

INDIA

FY2006

$0.02 mn

Product offering in education.

3.ARMAN INC

USA

FY2007

$4.8 mn

SAP implementation and ERP.

4.EMACS TECHNOLGIES

USA

FY2007

$3 mn

IT services in healthcare, BFSI, telecom and logistic.

5.KC MANAGEMENT GROUP

USA

FY2008

$35 mn

Provides education service to 10 state of USA.

6.AZZURRI EDUCATION

UK

FY2008

$7 mn

Provides technology product, services and educational services to over 1000 school and 12 local authorities.

7.HAMLET

UK

FY2008

$3 mn

Its client includes national examination authorities in the UK, seven countries in Africa and three countries in the Caribbean.

         

IT EDUCATION TO BECOME THE FOCUS AREA:
In the US, IT spends in the education sector is expected to be $65 billion. The company is well poised to capture the opportunity.
The company has strong focus on education products and solutions and has achieved a market leadership position in the global IT education space by becoming end to end solution provider. It has currently more than 30 products in the education space with clients in the US, UK, Africa and Nigeria.

EDUCATIONAL PRODUCT:



SOURCE: COMPANY

DOMESTIC EDUCATION COULD BE THE KEY DRIVERS:
India’s education system is still dominated by the public education system. There are more than 1 million publicly run schools compared to about 50000 private schools. Not even 2% of the schools are IT enabled and the awareness of the need for IT enabled education solution is spreading fast. Further there are 5 million teachers who require IT training.

JOINT VENTURE WITH IL&FS TO CAPTURE DOMESTIC GROWTH:
Company tied up with IL&FS –ETS to offer comprehensive solution in education space. The JV is essentially focused towards the governments that initiating various educations programme under Sarva Shiksha Abhiyaan.


The JV will offer:
Set up complete infrastructure for school.
Hiring and training of teachers and other staff.
Installation ,implementation , and complete maintenance of comprehensive MIS that can be used by all parties involved  viz; central government, state government, school administrators, teachers and student.
The JV is expected to earn Rs1000 per child as a typical state has 8 million children. So this could be good revenue generator.

RISK AND CONCERN:
Company product are new and innovative, they are yet to find acceptance.
Execution delay to scale up the centers could hamper the growth.
Adverse movement in exchange rate could affect the realization.
Slow down in the global economy could hit the companies’ top line from foreign subsidiary.

SHAREHOLDING PATTERN:

 

 

NO.OF SHARES

% OF TOTAL

PROMOTERS

41149049

 

47.70%

 

INSTITUTION

8686917

 

10.07%

 

GENERAL PUBLIC

36430353

 

42.23%

 

GRAND TOTAL

86266319

 

100%

 

FINANCIAL:

 

 

31/03/05

31/03/06

31/03/07

31/03/08

TOTAL INCOME

8.81

21.01

70.25

205.73

EXPENDITURE

-5.68

-15.27

-54.9

-151.02

OPERATING INCOME

3.13

5.74

15.35

54.71

DEPRECIATION

-0.01

-0.03

-0.43

-1.25

PBIT

 

3.12

5.71

14.92

53.46

INTEREST

 

0

0

-1.45

-2

PBT

 

3.12

5.71

13.47

51.46

TAX

 

-0.06

-0.62

-1.94

-7.19

PAT

 

3.06

5.09

11.53

44.27

CHANGES IN THE TOTAL INCOME: CAGR IN TOTAL INCOME 185.8%
CHANGES IN OPERATING INCOME:  CAGR IN OPERATING INCOME 159%.
CHANGE IN NET PROFIT: CAGR IN NET PROFIT  143.6%.

RATIO:

 

 

31.03/05

31/03/06

31/03/07

31/03/08

EPS

 

0.354988

0.590487

1.337587

5.135731

OPM

 

35.52781

27.32032

21.85053

26.59311

NPM

 

34.73326

24.22656

16.41281

21.5185

INTEREST COVER

INFINITE

 

10.28966

 

COMPARISION OF Q3FY2009 WITH Q3FY2008:            

 

 

31/12/07

% CHANGE

31/12/08

TOTAL INCOME

51.97

73.20%

 

90.01

EXPENDITURE

-38.56

 

 

-65.16

OPERATING INCOME

13.41

85.30%

 

24.85

DEPRECIATION

-0.3

 

 

-0.54

PBIT

 

13.11

 

 

24.31

INTEREST

 

-0.37

 

 

-3.24

PBT

 

12.74

 

 

21.07

TAX

 

-2

 

 

-4.56

PAT

 

10.74

53.72%

 

16.51

KEY HIGHLIGHTS: 
TOTAL INCOME INCREASED BY 73%.
OPERATING INCOME UP BY 85.3%.
NET PROFIT INCREASED BY 53.72%.

VALUATION:
At current market price of Rs53 stock is trading at 10.5x.In light of strong growth potential of the company we value the company at 15x to the trailing twelve month earning , this give the price of Rs85. There is at least 45-50% upside in the stock from current level.


CONCLUSION:
The investor should accumulate the stock at current level.  The time horizon for investment should be at least 12 month.


     

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