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SHARETIPSINFO >>Research Reports >> CORE PROJECT AND TECHNOLOGIES LTD. (24-03-2009)
LISTING |
|
|
Rs 53 |
|
Rs 311/Rs 34 |
|
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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