MT Educare - 3QFY2016 Result Update - Angel Broking

MT Educare's results for 3QFY2016 came in-line with our estimates. The company's top-line growth was strong mainly due to firm growth in Robomate product sales as well as in the Government Projects segment. However, the core coaching business was subdued during the quarter. On the operating front, the company reported margin improvement which led to higher profitability.

Strong growth in Robomate product sales and Government Projects segment boost overall consolidated top-line: For the quarter, MT Educare registered a doubledigit growth in its top-line, ie of ~25% yoy to ~Rs. 71cr, on back of strong growth in Robomate product sales as well as in the Government Projects segment. However, the core coaching business was subdued during the quarter.

PAT grew ~34% yoy: MT Educare posted a net profit growth of ~34% yoy to ~Rs. 8cr, owing to strong revenue growth and higher other income.

Outlook and valuation: We expect MT Educare to report a strong top-line and bottom-line growth in the coming financial years (FY2016E and FY2017E) on back of healthy growth in coaching business (school, science and commerce). This would be owing to its strong brand image and with it implementing innovative teaching technologies. Further, we expect additional revenue growth from execution of government projects, Robomate product, and tie up with Shri Gayatri Educational Society (SGES) in Hyderabad which has a model similar to preuniversity (PU) colleges. However, we believe that currently all positives are already factors in stock prices. Thus, we recommend a Neutral rating on the stock.

Shares of MT EDUCARE LTD. was last trading in BSE at Rs.159.9 as compared to the previous close of Rs. 159.1. The total number of shares traded during the day was 56397 in over 1003 trades.

The stock hit an intraday high of Rs. 163.5 and intraday low of 158.4. The net turnover during the day was Rs. 9097841.

Source : Equity Bulls

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