Education Sector - Post-Conference Note - Centrum 23122011

8/3/2019 Education Sector - Post-Conference Note - Centrum 23122011

1/15

Please refer to important disclosures/disclaimers insideCentrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet

Abhishek Ananda.anand @centrum.co.in+91 22 4215 9853

Opportunity continues

Our one-day Education Sector Day (19 December 2011)

brought together 7 companies and over 40 investors,facilitating over 160 meetings an average of about 25meetings per company. Strong participation indicatedthat fund managers were interested in understandingprospects of the sector. The companies thatparticipated had diverse business models covering allsegments of the education sector.

Demand robust: All companies were unanimous overopportunities in the Education space. Key insights fromvarious companies indicated enough scope for growthin the existing education landscape as the quality ofeducation was substandard. There was greater

acceptance of services offered by corporates which areintroducing technology to enhance quality ofeducation by means of multimedia to schools andvirtual classrooms, among others.

Companies interest shifts to skill development:Companies were cautious on bidding for ICT relatedprojects as the business model was felt to be weak withhigh collection periods. Among government initiatives,Public Private Partnership for skill development hasbecome the area of interest of companies. Of the listedcompanies, Everonn Education (15mn youth) and NIIT(7mn youth) have entered into partnership withNational Skill Development Corporation (NSDC) to train

youth for various skills by 2022.

Asset light model in vogue: Most companies showeda preference for the asset light model and recurringrevenue stream. This mainly stemmed from the factthat companies within each sub segment includingformal education (K-12 and Higher education),multimedia to schools, vocational training, tutorialservices etc prefer the opex model and managementservices model rather than incurring higher capitalexpenditure. Most expansions are expected through anasset light approach and the companies are shiftingfocus to cash flow generation.

Strong interest across listed and unlistedcompanies: Based on investor response, we realisedthat investors were keen on understanding thecompetitive landscape and reasons for seriouscorrection in multiples. From a business standpoint,companies were trying to curb higher capex anddebtors days by shifting to the asset light model andsegments offering steady revenue stream with lowercollection periods such as managing brick and mortarK-12 schools and higher education.

Participating Companies

Aptech

Educomp SolutionsNIIT

Tree House Education & Accessories

GurukulOnline Learning Solutions

ITM Group of Institutions

JBCN Education Pvt. Ltd.

23 Dec 2011

Post-Conference Note

INDIA

Education Sector Day


2/15

2Education Sector Day

Table of Content

Listed CompaniesAptech 3

Educomp Solutions 5

NIIT 7


Not Listed CompaniesGurukulOnline Learning Solutions 11

ITM Group of Institutions 12

JBCN Education Pvt. Ltd. 13


3/15

Please refer to important disclosures/disclaimers in Appendix ACentrum Equity Research is available on Bloomberg, Thomson Reuters and FactSet

Not Rated

CMP: Rs73*

*as on 22 December 2011

Abhishek [email protected]+91 22 4215 9853

Multimedia segment to gain strength

Mr. Ninad Karpe, MD and Mr. Saurabh Gada, General

Manager Investor Relations & Special Projectsrepresented Aptech at our Education Sector Day.Some of the key takeaways are:

International market to register stronger growth:International market contributes 19% to the revenue. Themanagement indicated strong demand for IT trainingand multimedia business outside India. There is scope ofexpanding centers and course offerings in theinternational market which would drive growth.

Taking multimedia outside India: Aptech is the leaderin multimedia (including MAAC - Maya Academy ofAdvance Cinematics) training in India. It accounts for 55%to the total revenue at consol;idated level (Ex-china). The

management indicated plans of taking MAAC tointernational markets. Presently, multimedia trainingfrom the international market contributes 19% to theinternational revenue. With the launch of MAAC ininternational markets, the growth profile and share ofmultimedia revenue are likely to improve. Also, marginprofile would improve.

Multi brand/multi channel/multi geography strategy:The company plans to grow its business by leveraging itsmultiple brands by expanding courses and taking it tomore number of countries using various modelsincluding direct franchise, master franchise (offeringhigher share to franchisee owner), Joint venture and

investment like that in China. This would help companygrow with minimum capital commitment.

Financials: The management expects domesticmultimedia business to grow at 12-15% and internationalmultimedia business at 18-20% YoY. MAACs accountingpolicy will change wherein it would report net salesinstead of system-wide revenue (which includesfranchisee owners share). EBITDA margin is likely toimprove as international business is set to grow fasterwith higher margin over domestic market. The effectivetax rate is expected to increase post 2-3 quarters asaccumulated losses would come down. The company isin routine capex mode and expects to incur Rs120-140mnannually. As of H1FY12, it has cash of Rs1bn with zero

debt. Valuation: At the CMP, the stock trades at 12.3x FY12E

and 10.1x FY13E EV/EBITDA consensus estimates. Thevaluation also factors in investment in BJBD (China).

Key Data

Bloomberg Code APTR IN

Reuters Code APTA.BO

Current Shares O/S (mn) 48.8

Diluted Shares O/S(mn) 48.8

Mkt Cap (Rsbn/USDmn) 3.5/67.2

52 Wk H / L (Rs) 148/69

Daily Vol. (3M NSE Avg.) 1,359,083

Face Value (Rs) 10

1 USD = 52.7

Shareholding Pattern

Public &

Others

33.4

Promoters

35.8

Non Promoter

Corp. Hold.

20.9

Institutions

0.2

Foreign

9.7

As on 30 September 2011

One Year Indexed Stock Performance

102030

40506070

8090

100110

120130

Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11

APTECH LTD NSE S&P CNX NIFTY INDEX

Price Performance (%)

1M 6M 1Yr

Aptech (23.2) (16.7) (40.4)

NIFTY (1.6) (10.3) (20.9)

Source: Bloomberg, Centrum Research


Y/E March (Rsmn) Revenue YOY (%) EBITDA EBITDA (%) Adj PAT YOY (%) EPS ROE (%) ROCE (%) P/E (x) EV/EBITDA (x)

CY06 1,741 12.8 360 20.7 164 592.0 4.3 0.0 0.0 17.1 9.5

CY07 2,167 24.5 324 14.9 224 36.4 3.8 0.1 2.3 19.2 9.1

CY08 2,739 26.4 483 17.6 514 129.6 9.5 16.1 2.8 7.6 3.8FY10* 1,576 (42.5) 209 13.3 (147) NM (4.8) 7.3 5.7 (15.1) 16.2

FY11 1,908 21.0 217 11.3 445 NM 8.4 3.2 4.2 8.6 14.2

*For the period of 15 monthsSource: Company, Centrum Research

Education

Conference Highlights 23 December 2011

INDIA

Aptech


4/15

4Aptech

Financials (Consolidated)

Exhibit 1: Income Statement

Y/E March (Rsmn) CY06 CY07 CY08 FY10* FY11

Revenues 1,741 2,167 2,739 1,576 1,908

Growth in revenues 12.8 24.5 26.4 (42.5) 21.0

Operating Expenses 434 585 702 427 681

% of Revenue 2 4.9 2 7.0 25.6 27.1 35.7

Employee cost 405 438 484 455 391

% of Sales 23.3 2 0.2 17.7 28.9 20.5

Other expenses 542 821 1,070 485 620

% of Sales 31.1 3 7.9 39.1 30.8 32.5

EBITDA 360 324 483 209 217

EBITDA Margin 20.7 14.9 17.6 13.3 11.3

Depreciation 149 155 174 157 127

PBIT 211 169 310 53 89

Interest expenses 29 25 23 36 35

PBT from operations 182 143 287 16 54

Other non operating income 18 22 80 83 380

PBT 200 166 367 99 434

Provision for tax 38 (0) (76) 329 5

Effective tax rate 19.0 (0.1) (20.6) 332.5 1.1

PAT 162 166 442 (230) 429

Minority Interest 0 (6.1) (2.2) (6.2) (21.4

Adjustment for extraordinary items (2) (52) (69) (77) 6

Adjusted PAT 164 224 514 (147) 445

Growth in PAT (%) 5 92 .0 3 6.4 1 29.6 NM NM

PAT m argin 9 .4 10.3 1 8.8 (9.3) 2 3.3


Exhibit 2: Balance Sheet

Y/E March (Rsmn) CY06 CY07 CY08 FY10* FY11

Share Capital 379 438 465 466 488

Reserves 487 1,066 2,091 1,530 2,260

Equity Share Warants 81 36 1 1 1

Shareholders' fund 947 1,540 2,558 1,997 2,749

Minorities 2.5 3.8 0 1.8 0.1

Debt 227 172 189 238 0

Other LT Liabilities

Total Capital Employed 1,177 1,716 2,747 2,237 2,749

Gross Block 1,558 1,708 1,268 1,214 2,029

Accumulated dep. 680 822 518 810 970

Impairment of Assets 312.8 312.8 223.8 0 0

Net Block 566 573 527 404 1,058

Net Fixed Assets 566 573 527 404 1,058

Other LT Assets 2 42 3 7 13

Investments 0 0 0 1,081 1,184

Inventories 29 31 39 16 34

Debtors 319 511 449 274 195

Cash & bank balances 345 761 1,902 394 470

Other current assets/Loans & Adv 192 222 148 321 345

Total current assets 886 1,525 2,537 1,005 1,045

Current liab & provisions 276 453 629 261 551

Net current assets 610 1,073 1,908 744 494

Deferred Tax (net) (1) 28 310 0 0

Total Assets 1,177 1,716 2,747 2,237 2,749


Exhibit 3: Cash flow

Y/E March (Rs mn) CY06 CY07 CY08 FY10* FY11

CF from operating activities

Profit before tax 200 166 367 99 434

Depreciation 149 155 174 157 127

Interest expenses 29 25 23 36 35

Other

OP profit before WC change 84 186 232 1,378 221

Working capital adjustment 108 (213) (192) (38) 128

Gross cash from operations 193 (27) 40 1,340 350

Less: Direct taxes paid 38 (0) (76) 329 5

Cash from operations 155 (27) 116 1,011 345

Cash from investment (192) (332) (151) (1,011) 1

Cash from financing (9) 353 301 56 (294)

Net cash inflow/(outflow) (45.8) (5.9) 265.2 55.8 51.5

Opening cash 106.9 61.1 55.2 320.4 376.2

Closing cash 61 55 320 376 428


Exhibit 4: Key Ratios

Y/E March CY06 CY07 CY08 FY10* FY11

Margin Ratios (%)

EBITDA Margin 20.7 14.9 17.6 13.3 11.3

PBIT Margin 12.1 7.8 11.3 3.3 4.7

PBT Margin 11.5 7.6 13.4 6.3 22.8

PAT Margin 9.4 10.3 18.8 (9.3) 23.3

Growth Ratios (%)

Revenues 12.8 24.5 26.4 (42.5) 21.0

EBITDA (331.5) (10.1) 49.3 (56.7) 3.4

Net Profit 592.0 36.4 129.6 NM NM

Return Ratios (%)

ROCE 2.3 2.8 5.7 4.2

ROIC 26.8 20.0 46.6 1.9 42.8

ROE 0.1 16.1 7.3 3.2

Liquidity Ratios (x)

Debt to equity ratio 0.27 0.17 0.12 0.11 0.05

Interest cover (1.6) 1.3 1.9 4.4 4.4

Per share (Rs)

Reported EPS 4.26 3.79 9.51 -4.8 8.4

Book Value 22.85 34.37 54.97 42.87 56.33

Valuation parameters (x)

P/E 17.1 19.2 7.6 (15.1) 8.6

P/BV 3.2 2.1 1.3 1.7 1.3

EV/ EBITDA 9.5 9.1 3.8 16.2 14.2

EV/ Sales 2.0 1.4 0.7 2.1 1.6

M-Cap/ Sales 2.0 1.6 1.3 2.2 1.9



5/15


Hold

Target Price: Rs220

CMP: Rs195*

Upside: 13.1%



Market leader across businesses

Mr. Sonjoy Mohanty, President Corporate Affairs and

Mr. Raman Bajaj, VP, Corporate Affairs representedEducomp Solutions at our Education Sector Day.Some key takeaways were:

Smart class expected to demonstrate strongerclassroom additions in H2FY12E: The managementindicated strong demand for smart class productsfrom schools. The guidance of 40,000 to 45,000classrooms would be achieved considering this strongdemand. The company has added 12,106 classroomsin H1FY12.

Securitisation of smart class segment for fasterramp up: The management explained the rationale

behind the change of smart class model from Build,Own, Operate and Transfer (BOOT) to sale. Thecompany wanted to accelerate the sale of smart classproducts and introduced third party vendors whocould install and maintain the product on its behalf.Also, the accounting standards under IFRS treat theearlier deal as financial lease, which would havechanged the companys categorisation to a leasingcompany instead of an Education company. Lastly, thishelps the company get cash upfront and bring downdebtors days to 90 days level.

Growth momentum to continue: The managementexpects to maintain its growth momentum on theback of strong demand for the smart class segmentand contribution from subsidiaries going forward.

Addresses investors concerns: The managementaddressed concerns over the smart class segment. Thissegment enjoys a premium position in the market andthe management does not see any major threat ofprice erosion on new sale or renewals. Also, theinnovation within the product would help thecompany maintain growth momentum. Thesecuritization deal with banks would now be with 20%recourse and there could be multiple announcementsgoing forward which would keep debtors days under

check. Valuation: At the CMP, the stock trades at 6.6x FY12E

and 4.5x FY13E earnings estimates. We believe thatcurrent price factors in investors concerns. Wemaintain our Hold rating on the stock. Events to watchfor would be 1) monetization of assets (subsidiary) and2) reduction in debtors days post securitization deal at20% recourse.

Key Data

Bloomberg Code EDSL IN

Reuters Code EDSO.BO




52 Wk H / L (Rs) 556/162

Daily Vol. (3M NSE Avg.) 2,453,606

Face Value (Rs) 2

1 USD = Rs52.7


Foreign

29.7

Institutions

2.7Non Promoter

Corp. Hold.

5.0Promoters

49.5

Public &Others

13.1



102030

40506070

8090

100110

120130


EDUCOMP SOLUTION NSE S&P CNX NIFTY INDEX


1M 6M 1Yr

Educomp Solutions 8.1 (50.9) (62.3)

NIFTY (1.6) (10.3) (20.9)



Y/E March (Rsmn) Revenue YoY (%) EBITDA EBITDA(%) Adj. PAT YoY (%) RoE (%) RoCE (%) EPS PE (x) PB (x) EV/EBITDA

FY10 10,395 63.2 4,817 46.3 2,759 107.6 27.1 21.9 27.3 7.1 1.1 4.3

FY11 13,509 30.0 5,425 40.2 3,367 22.0 17.6 14.5 33.4 5.8 0.9 5.0

FY12E 15,249 12.9 6,144 40.3 2,989 (11.2) 12.9 13.5 29.6 6.6 0.8 4.0FY13E 19,360 27.0 8,541 44.1 4,383 46.6 16.6 19.1 43.4 4.5 0.7 2.4

FY14E 22,575 16.6 10,476 46.4 5,499 25.5 17.9 22.1 54.5 3.6 0.6 1.4

Source: Company, Centrum Research

Education


INDIA

Educomp Solutions


6/15

6Educomp Solutions



Y/E March (Rsmn) FY10 FY11 FY12E FY13E FY14E

Net Sales 10,395 13,509 15,249 19,360 22,575

Growth (%) 63.2 3 0.0 12.9 2 7.0 16.6Cost of goods sold 1,750 3,328 3,507 4,259 4,966

% of sales 1 6.8 24.6 23.0 22.0 22.0

Personnel expenses 1,793 2,560 3,050 3,872 4,515

% of sales 1 7.2 19.0 20.0 20.0 20.0

Admin and other expenses 2,035 2,196 2,386 2,626 3,114

% of sales 1 9.6 16.3 15.6 13.6 13.8

Operating Profits 4,817 5,425 6,144 8,541 10,476

% of sales 4 6.3 40.2 40.3 44.1 46.4

Depreciation and Amortisation 1,142 841 851 1,087 1,264

PBIT 3,675 4,584 5,293 7,454 9,212

Interest Expenses 539 962 1,117 1,020 880

PBT from operations 3,136 3,622 4,176 6,434 8,332

Other non operating income 1,255 461 350 360 250

PBT before extraordinary items 4,392 4,083 4,526 6,794 8,582

Extraordinary income/(expenses)

PBT 4,392 4,083 4,526 6,794 8,582

-PBT margin (%) 42.2 30.2 29.7 35.1 38.0

Provision for tax 1,584 678 1,448 2,174 2,746

Effective tax rate (%) 36.1 16.6 32.0 32.0 32.0

Net Profit (reported) 2,808 3,405 3,078 4,620 5,836

Less: Min Int//profit from ass. 49 39 89 237 336

Net profit after adjustments 2,759 3,367 2,989 4,383 5,499

-Growth (%) 107.6 22.0 (11.2) 46.6 25.5- NPM (%) 26.5 24.9 19.6 2 2.6 24.4




Share Capital 190 191 191 191 191

Reserves and Surplus 16,289 21,593 24,214 28,084 32,940

Total shareholders fund 16,479 21,784 24,405 28,275 33,131

Minority Interest 1,915 2,365 2,429 2,640 2,946

Loan fund 10,501 14,454 12,586 8,081 8,081

Total capital employed 28,894 38,604 39,420 38,995 44,158

Gross block 8,967 11,770 16,596 19,646 22,496

Less: Accumulated depreciation 1,050 1,862 2,713 3,800 5,065

Net block 7,917 9,907 13,883 15,846 17,432

Capital WIP 2,739 7,880 3,500 1,500 1,100

Net fixed assets 10,656 17,787 17,383 17,346 18,532

Goodwill 6,031 8,518 8,719 8,719 8,719

Investments 354 1,235 1,235 1,235 1,235

Cash and bank 7,887 4,489 6,740 6,307 11,496

Inventories 368 472 877 1,065 1,242

Debtors 5,530 6,254 5,542 6,149 5,350

Other cur. Assets & loans & adv. 2,031 3,763 4,570 5,721 6,621

Total current assets 15,816 14,978 17,728 19,241 24,709

Current liabilities and Prov. 3,963 3,914 5,645 7,546 9,036

Net current assets 11,853 11,064 12,083 11,695 15,672

Misc Expenses - - - - -

Total assets 28,894 38,604 39,420 38,995 44,158




Cash Flow from operation

Profi t before tax 4 ,392 4,083 4,502 6,767 8,552

Depreciation 1,142 841 851 1,087 1,264

Interest expenses 411 958 1,117 1,020 880

Other non cash charges (931) (520) (350) (360) (250)

Op. profit before WC change 5,015 5,361 6,119 8,514 10,446

Working capital adjustments (1,910) (2,448) 1,198 (256) 906

Direct tax paid (938) (678) (1,448) (2,174) (2,746)

Net cash from operating 2 ,166 2,235 5,868 6,084 8,606

Cash flow from investing

Capex (4,726) (7,943) (447) (1,050) (2,450)

Investments and others 1,004 (2,456) 213 570 557

Net cash from investment (3,722) (10,399) (234) (480) (1,893)

Cash flow from financing

Proceeds from sh cap & premium 6,000 1,895 (19) - -

Borrowings/(Repayments) 2,088 3,895 (1,868) (4,505) -

Interest paid (411) (958) (1,117) (1,020) (880)

Dividend paid (166) (67) (350) (513) (643)

Net cash from financing 7,511 4,765 (3,354) (6,038) (1,523)

Net cash increase/(decrease) 5,955 (3,398) 2,280 (433) 5,189



Y/E March FY10 FY11 FY12E FY13E FY14E

Margin Ratio (%)

EBITDA Margin 46.3 40.2 40.3 44.1 46.4

PBIT Margin 35.4 33.9 34.7 38.5 40.8

PBT Margin 42.2 30.2 29.7 35.1 38.0PAT Margin 27.0 25.2 20.2 23.9 25.9

Growth Ratio (%)

Revenue 63.2 30.0 12.9 27.0 16.6

EBITDA 57.3 12.6 13.3 39.0 22.7

Net Profit 107.6 22.0 (11.2) 46.6 25.5

Return Ratios (%)

ROCE 21.9 14.5 13.5 19.1 22.1

ROIC 29.1 19.7 18.4 26.1 32.1

ROE 27.1 17.6 12.9 16.6 17.9

Turnover Ratios

Asset turnover ratio (x) 0.5 0.4 0.4 0.5 0.5

Working capital cycle (days) 60.9 74.5 57.0 23.5 (0.7)

Average collection period (days) 145.6 159.2 141.2 110.2 93.0Average payment period (days) 161.4 136.4 175.4 178.0 184.9

Per share (Rs)

Basic EPS 29.0 35.2 31.3 45.9 57.6

Fully diluted EPS 27.3 33.4 29.6 43.4 54.5

Book value 171.9 225.9 253.3 293.8 344.6

Solvency Ratio (x)

Debt-equity 0.6 0.7 0.5 0.3 0.2

Interest coverage ratio 6.8 4.8 4.7 7.3 10.5

Valuation (x)

P/E 7.1 5.8 6.6 4.5 3.6

P/BV 1.1 0.9 0.8 0.7 0.6

EV/EBITDA 4.3 5.0 4.0 2.4 1.4

EV/Sales 2.0 2.0 1.6 1.1 0.7M-cap/Sales 1.8 1.4 1.2 1.0 0.8



7/15


Buy

Target Price: Rs81

CMP: Rs38*

Upside: 116%



Focus on improving efficiency

Mr. Vijay Kumar, Group Executive Vice-President and

Mr. Kapil Saurabh, General Manager, represented NIIT at ourEducation Sector Day. Some of the key takeaways are:.

Individual Learning Solution (ILS) key segment: NIIT isfocusing on improving capacity utilization by integrating ITtraining, BFSI and Imperia and introducing the concept ofcloud campus to provide flexibility to students and increasereach. The company has already garnered 11,000registrations in the last two quarters. Also, the managementexpects new businesses such as IFBI, Imperia and Uniqua tobreak even at the EBITDA level this fiscal.

Corporate Learning Solution to show improved margins:Within these segments, the company is focusing on highmargin managed services. It will also be getting some

content development business from SkilSoft and can selltheir courses as well. Post the sale of Element K, thecompany expects the EBITDA margin to improve from 9%levels.

Skill development initiative: NIIT and National SkillDevelopment Corporation (NSDC) entered into a publicprivate partnership to train 7mn youth by 2022. The trainingwill be imparted across 9 service sectors Retail, IT/ITeS,BFSI, Education & Training Services, Media & Entertainment,Healthcare, Telecom, Hospitality and the Informal sector. Thetotal project cost is estimated at Rs3.8bn over the first fouryears of which the companys contribution will be Rs900mnas equity. The company plans to set up 1,500 centers across1,000 cities. The management expects this segment to

deliver 15% margin post the gestation period. It also has thepotential to generate 20% RoE.

Stake Sale of Element K business to SkillSoft positivefor NIIT: The company sold its Element K business toSkillSoft for Enterprise Value USD110mn which would givesurplus cash of approx USD70mn after adjusting forexpenses and taxes. We believe this would improve profitprofile as well as help reduce debt for NIIT.

Financials to improve: Key growth drivers for NIIT would be1) managed training services in corporate learning solutions;2) Private schools segment within school learning solutionsand 3) cloud campus offering in individual learningsolutions. NIIT has registered revenue and core profit of 7%

CAGR and 4% CAGR over FY08-11 and this is expected toaccelerate. The company is into routine capex mode. It willbe using the proceeds form sale of Element K business topay down debt. Hence, debt levels would come down toRs1.1bn and return ratios would improve.

Valuation.The companys return ratios will expand, marginimprovment and the cash will reduce debt, going forward.At the current valuation of 4.8x FY13E, we believe the stockis attractive.

Key Data

Bloomberg Code NIIT IN

Reuters Code NIIT.BO




52 Wk H / L (Rs) 61/36

Daily Vol. (3M NSE Avg.) 190,768

Face Value (Rs) 2

1 USD = Rs52.7


Public &Others

18.7

Promoters

34.0 Non Promoter

Corp. Hold.

7.6

Institutions

10.4

Foreign

29.4



60

70

80

90

100

110

120

130


NIIT LTD NSE S&P CNX NIFTY INDEX


1M 6M 1Yr

NIIT (16.7) (30.7) (31.9)

NIFTY (1.6) (10.3) (20.9)



Y/E March (Rsmn) Revenue YoY (%) EBITDA EBITDA (%) Adj PAT YoY % Fully DEPS RoE (%) RoCE (%) P/E (x) EV/EBITDA (x)

FY10 11,993 4.4 1,568 13.1 702 0.6 4.3 14.3 11.1 8.8 6.2FY11 12,483 4.1 1,576 12.6 922 31.3 5.6 17.4 12.9 6.7 5.8FY12E

12,180 (2.4) 1,847 15.2 4,497 387.8 27.2 54.4 41.3 1.4 1.5FY13E 11,374 (6.6) 1,872 16.5 1,292 (71.3) 7.8 11.4 9.5 4.8 1.0FY14E 12,421 9.2 2,120 17.1 1,484 14.9 9.0 12.2 10.4 4.2 0.6


Education


INDIA

NIIT


8/15

8NIIT




Net Sales 11,993 12,483 12,180 11,374 12,421

-Growth (%) 4.4 4.1 -2.4 -6.6 9.2Operating Profits 1,568 1,576 1,847 1,872 2,120

% of sales 13.1 12.6 1 5.2 1 6.5 1 7.1

Depreciation and Amortisation 751 854 791 744 816

PBIT 817 722 1056 1129 1304

Interest Expenses 333 337 206 (54) (104)

PBT from operations 484 385 850 1,183 1,408

Other non oper. income 43 30 0 0 0

PBT before extraord. items 527 415 850 1,183 1,408

Extraord. income/(expenses)

PBT 527 415 850 1,183 1,408

- PB T margin (%) 4.4 3.3 7 .0 10.4 11.3

Provision for tax 108 89 221 331 394

Effective tax rate (%) 21.5 24.0 26.0 28.0 28.0

Share of profir from ass. 322 453 438 440 470

Net Profit (reported) 702 922 4,497 1,292 1,484

-Growth (%) 0.6 31.3 387.8 (71.3) 14.9

-NPM (%) 3.2 3.8 33.3 7.5 8.2




Share Capital 330 330 330 330 330

Options outstanding - - - - -

Reserves and Surplus 4,712 5,235 10,639 11,433 12,324

Total shareholders fund 5,042 5,565 10,969 11,763 12,654

Minority Interest 22 30 30 30 30

Loan fund 4046 3658 1258 458 258

Total capital employed 9,110 9,253 13,258 13,251 13,942

Gross block 8,138 8,771 7,371 8,121 8,871

Less: Accumulated dep. 3,221 3,971 4,402 5,146 5,961

Net block 4,916 4,800 2,969 2,976 2,910

Capital WIP 448 622 200 200 200

Net fixed assets 5,364 5,422 3,169 3,176 3,110

Investments 1,274 1,641 2,078 2,518 2,988

Cash and bank 616 526 5494 5747 6017

Inventories 126 153 174 190 208

Debtors 3,403 3,898 3,504 2,992 3,267

Other cur. Assets. & loans and adv. 1,538 1,353 1,218 1,137 1,242

Total current assets 6,380 7,104 11,564 11,240 11,908

Curr. liab. and Prov. 4,207 5,221 3,861 3,990 4,371

Net current assets 2,174 1,883 7,703 7,250 7,537

Deferred tax asset 298 307 307 307 307

Total assets 9,110 9,253 13,258 13,251 13,942




Cash Flow from operation

Profit before tax 488 557 850 1,183 1,408

Depreciation 751 854 791 744 816

Interest expenses 308 297 206 (54) (104)

Other non cash charges 167 51 (40) (140) (140)

Op. profit before WC changes 1,715 1,547 1,517 1,732 1,980

Working capital adjustments (1,380) (11) (853) 705 (16)

Direct tax paid (130) (221) (221) (331) (394)

Net cash from operation 205 1,315 442 2,106 1,569

Cash flow from investing

Capex (647) (1,111) 1,822 (750) (750)

Investments 187 522 3,400 140 140

Net cash from investment (459) (505) 5,222 (610) (610)

Cash flow from financing

Proceeds from share capital 3 - 1,200 - -

Borrowings/(Repayments) 464 (1,519) (1,400) (800) (200)

Interest paid (312) (294) (206) 54 104

Dividend paid (250) (269) (290) (498) (593)

Net cash flow from financing (95) (917) (696) (1,244) (689)

Net cash increase/(decrease) (349) (107) 4,969 252 270



Y/E March FY10 FY11 FY12E FY13E FY14E

Margin Ratio (%)

EBITDA Margin 12.9 12.6 15.2 16.5 17.1

PBIT Margin 6.6 5.8 8.7 9.9 10.5

PBT Margin 4.2 3.3 7.0 10.4 11.3

PAT Margin 3.2 3.8 33.3 7.5 8.2

Growth Ratio (%)Revenue 4.4 4.1 (2.4) (6.6) 9.2

EBITDA 30.3 2.1 17.2 1.4 13.2

Net Profit (2.5) 23. 3 766.2 (79.0) 19.0

Return Ratios (%)

ROCE 11.1 12.9 41.3 9.5 10.4

ROIC 13.4 13.1 17.5 20.7 23.4

ROE 14.3 17.4 54.4 11.4 12.2

Turnover Ratios

Asset turnover ratio (x) 1.4 1.4 1.1 0.9 0.9

Working capital cycle (days) (72.3) (58.6) (63.3) (61.1) (68.0)

Average collection period (days) 96.0 106.7 110.9 104.2 92.0

Average payment period (days) 171.7 169.4 179.1 171.2 165.8

Per share (Rs)

Basic EPS 4.3 5.6 27.3 7.8 9.0

Fully diluted EPS (ex profit from asso.) 2.3 2.8 24.6 5.2 6.1

Fully diluted EPS 4.3 5.6 27.2 7.8 9.0

Book value 30.5 33.7 66.4 71.2 76.6

Solvency Ratio (x)

Debt-equity 0.8 0.7 0.2 0.1 0.1

Interest coverage ratio 2.4 2.1 5.1 (20.8 ) (12.5)

Valuation (x)

P/E 8.8 6.7 1.4 4.8 4.2

P/E (ex profit from associates) 16.3 13.2 1.5 7.3 6.1

P/BV 1.2 1.1 0.6 0.5 0.5

EV/EBITDA 6.2 5.8 1.5 1.0 0.6

EV/Sales 0.8 0.7 0.2 0.2 0.1

M-cap/Sales 0.5 0.5 0.5 0.5 0.5



9/15


Not Rated

CMP: Rs156*



Play on Pre-schools

Mr. Rajesh Bhatia, MD and Mr. Utsav Srivastava,

Director --- Human Resources & Operations representedTree House at our Education Sector Day. Some of thekey takeaways are:

Three revenue streams: The company has three setsof revenue streams, pre-schools, Kindergarten-12 (K-12) schools and investments. The business model ofthe company allows it to generate significant free cashflow. Hence, the management indicated that thecompany would be adding the surplus to fixeddeposits with nationalized banks.

Largest owned-operated pre-school in the country:Presently, the company runs 240 pre-schools (234 as

of Q2FY12) with 115 in Mumbai alone. Themanagement indicated the there was limited scope ofadding more pre-schools in smaller towns againstmetros and tier 1 cities. The company has a fairlysteady revenue stream with no seasonality and thebusiness offers pricing power.

Formal education offerings: Tree House offers awide variety of educational services to K-12 schoolswhich include, designing curriculum and providingteaching aids, supplying methods for impartingeducation, organizing extra-curricular activities forstudents and teacher training on either lump sumbasis or per child basis depending on theagreement/services. The company is providingeducational services to 16 K-12 schools. Of these, itowns land and buildings of 4 schools.

Future expansion plans: The management indicatedit plans to expand pre-schools to 800-900 with 70-75%owned pre-schools by FY16 and have 23-24 K-12schools. By the end of June 2012, the company plansto take the number of pre-schools to 350. It does nothave plans to spend heavily on K-12 schools.

Growth prospects: The management indicated thatthe growth in business would largely come from 1)increase in the number of pre-schools; 2) increase inthe number of shifts to 3-4 in a day. The company isexpected to get Rs650-700mn in revenue in FY12E andnet profit will more than double to 250-300mn fromRs92mn in FY11.

Valuation. Based on earnings expectation mentionedabove, the stock is trading at 21.6x FY12E at lowerband of expectation of Rs250mn.

Key Data

Bloomberg Code THEAL IN

Reuters Code THEA.BO



Mkt Cap (Rsbn/USDmn) 5.3/99.

52 Wk H / L (Rs) 212/104

Daily Vol. (3M NSE Avg.) 417,875

Face Value (Rs) 10

1 USD = 52.7


Foreign

40.9

Institutions

7.9Non Promoter

Corp. Hold.

6.3

Promoters

29.6

Public &

Others

15.3



0

20

40

60

80

100

120

140

160

Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

TR EE HO USE ED UC A NSE S& P C NX NIFTY INDEX


1M 6M 1Yr

Tree House Edu. (6.9) - -

NIFTY (1.6) (10.3) (20.9)



Y/E March (Rsmn) Revenue YOY (%) EBITDA EBITDA (%) Adj PAT YOY (%) EPS ROE (%) ROCE (%) P/E (x) EV/EBITDA (x)

FY08 54 - 9 15.9 (2) - - - - - 612.3

FY09 103 89.5 21 20.1 5 NM 0.3 2.0 2.2 459.4 254.6

FY10 214 108.2 70 32.9 26 409.8 1.5 4.6 7.3 104.8 75.1

FY11 392 83.5 169 43.1 92 253.8 3.8 9.6 11.9 40.8 32.2


Education


INDIA



10/15

10Tree House Education & Accessories

Financials


Y/E March (Rsmn) FY08 FY09 FY10 FY11

Revenues 54.2 102.7 213.8 392.4

Growth in revenues 89.5 108.2 83.5Power & Fuel cost 1.1 2.3 3.5 6.1

% of Revenue 2.0 2.2 1.6 1.6

Employee cost 7.8 15.8 26.4 46.0

% of Sales 14.4 15.4 12.3 11.7

Manufacturing & Selling expenses 36.7 64.0 113.6 171.1

% of Sales 67.7 62.3 53.1 43.6

EBITDA 8.6 20.6 70.3 169.2

EBITDA Margin 15.9 20.1 32.9 43.1

Depreciation 9.4 18.7 29.3 39.6

PBIT (0.8) 1.9 41.0 129.6

Interest expenses 0.0 0.4 5.8 12.4

PBT from operations (0.8) 1.5 35.2 117.2

Other non operating income 0.1 3.8 4.9 19.1

Extra-ordinary income/(exp)

PBT (0.7) 5.3 40.1 136.3

Provision for tax 1.2 0.2 14.1 44.3

Effective tax rate (171.4) 3.8 35.2 32.5

PAT (1.9) 5.1 26.0 92.0

Adjustment for extraordinary items

Adjusted PAT (1.9) 5.1 26.0 92.0

Growth in PAT (%) NM 409.8 253.8

PAT margin (3.5) 5.0 12.2 23.4




Share Capital 88.1 150.4 174.2 240.2

Reserves (6.8) 289.7 441 986.3

Equity Application Money 0.5 0.0 82.5 0.0

Shareholders' fund 81.8 440.1 697.7 1,226.5

Debt 1.5 0.4 120.1 466.2

Other LT Liabilities

Total Capital Employed 83.3 440.5 817.8 1,692.7

Gross Block 91.3 263.3 386.7 719.2

Accumulated dep. 9.4 28.1 56.5 95.8Net Block 81.9 235.2 330.2 623.4

Net Fixed Assets 81.9 235.2 330.2 623.4

Other LT Assets 3.5 155.0 305.0 664.9

Investments 0.0 0.0 10.2 26.5

Inventories 0.5 1.6 3.0 14.7

Debtors 0.1 4.2 69.5 17.7

Cash & bank balances 1.8 21.5 103.4 278.7

Other current assets/Loans & Adv 10.7 52.0 54.1 223.6

Total current assets 13.1 79.3 230.0 534.7

Current liab & provisions 14.1 27.8 53.8 138.6

Net current assets (1.0) 51.5 176.2 396.1Deferred Taxes (Net) (1.1) (1.2) (3.8) (18.2)

Total Assets 83.3 440.5 817.8 1,692.7




CF from operating activities

Profit before tax (0.7) 5.3 40.1 136.3

Depreciation 9.4 18.7 29.3 39.6

Interest expenses 0.0 0.4 5.8 12.4

Other (0.1) (3.1) (1.8) (14.9)

OP profit before WC change 8.6 21.3 73.4 173.4

Working capital adjustment 4 .9 (32.3) (36.2) (22.6)

Gross cash from operations 13.5 (11.0) 37.2 150.8

Less: Direct taxes paid 1.2 0.2 14.1 44.3

Cash from operations 12.3 (11.2) 23.1 106.5

Cash from investment (91.4) (320.8) (286.6) (701.6)

Cash from financing 78.1 351.6 345.5 770.4

Net cash inflow/(outflow) (1.0) 19.6 82.0 175.3

Opening cash 2.8 1.8 21.4 103.4

Closing cash 1.8 21.4 103.4 278.7



Y/E March FY08 FY09 FY10 FY11

Margin Ratios (%)

EBITDA Margin 15.9 20.1 32.9 43.1

PBIT Margin (1.5) 1.9 19.2 33.0

PBT Margin (1.3) 5.2 18.8 34.7

PAT Margin (3.5) 5.0 12.2 23.4

Growth Ratios (%)Revenues 89.5 108.2 83.5

EBITDA 139.5 241.3 140.7

Net Profit NM 409.8 253.8

Return Ratios (%)

ROCE 2.2 7.3 11.9

ROIC (0.9) 1.4 6.2 10.4

ROE 2.0 4.6 9.6

Liquidity Ratios (x)

Debt to equity ratio 0.06 0 0.11 0.3

Interest cover 14.3 7.9 12.0

Per share (Rs)

Reported EPS 0.34 1.49 3.83

Book Value 9.23 29.26 35.32 51.06Valuation parameters (x)

P/E - 459.4 104.8 40.8

P/BV 16.9 5.3 4.4 3.1

EV/ EBITDA 612.3 254.6 75.1 32.2

EV/ Sales 97.2 51.1 24.7 13.9

M-Cap/ Sales 97.2 51.3 24.6 13.4



11/15


Not Listed


Unmatched expertise

Mr. Shailesh Mehta, Founder CEO, Mr. Manish Jain, Vice

President Operations and Mr. Mayur Hemani, Manager(Finance) represented Gurukul Online Leaning Solution(GOLS) at our Education Sector Day. Some of the keytakeaways are:

Focus on building virtual institution: GOLS is focusedon expanding online education and training globally.GOLS Education is a division of GOLS and plans todemerge to focus independently on the core business.

Partnership with ICSI, IGNOU and IRDA: GOLS hasentered into partnership with leading institutionsincluding Institute of Company Secretaries of India,Indira Gandhi National Open University and Insurance

Regulator and Development Authority to provide theircourses online to students. The company partneredwith ICSI, for their e-learning portal as the soleacademic, technical and administrative partner on aprofit sharing basis. Similarly, it offers online coachingto students of CFP (Certified Financial Planner). Thecompany has partnered with IGNOU to offer onlinedegree certification (online community college) onvarious courses to students. The company is anauthorized training institution accredited by IRDA forpre-recruitment training for life and non-life insurancestaff.

Acquisition of students: The company sourcesstudents through tele-calling and emails. During FY11,it registered 39,400 students for four courses beingoffered by IGNOU (200 students), ICSI (1,500 students),CFP (200 students) and IRDA (37,500 students). Goingforward, the management expects to increaseenrollment to around 54,350 enrollments in FY12E.

Future Plans: GOLS plans to extend its partnershipwith Institute of Cost and Works Accountants of India,Institute of Chartered Accountants of India andDOEACC for providing training in computer courses. The company also plans to add MBA and CharteredFinancial Analysts (CFA) coaching by 2012 and launch

GOLS MBA Certification tie-up with Distance EducationCouncil (DEC).

Financials: The company registered revenue worthRs15mn during FY11 and expects to clock Rs40-50mnwith PBT of Rs15mn in FY12E.

Education


INDIA

GurukulOnline Learning Solutions


12/15


Not Listed


Educating future business leaders

Dr. P.V. Ramana, Chairman represented ITM Group of

Institutions at our Education Sector Day. Some of thekey takeaways are:

Offerings: ITM was among the first entrants into theprivate education space in India. From there, theGroup has grown to 14 campuses across 8 cities inIndia offering graduate and post-graduate courses invarious streams, including management, engineering,hospitality, Allied Health, Fashion Design andexecutive education.

Strong team: The group has a well-established topmanagement, with Dr. P.V. Ramana at the head of allaffairs as Chairperson of the group. A professional

management team of ~25 people head the variousverticals.

Expand presence: In addition to the existing locationsthe group has built an education land-bank throughtimely acquisitions in Hyderabad, Nagpur, Vizag, Goa,& Raipur with further acquisitions expected in Gujaratand Rajasthan. ITMs first private state universitycampus in Raipur (will admit students in 2012-13Academic Year) and Chattisgarh is operational, withthe first student intake in July 2012. ITM VocationalUniversity, Gujarat (LOI in hand) would focus onHospitality, Allied Health and related vocations, andvarious Trade and Technology Diplomas. ITMUniversity, Rajasthan (LOI in hand) is in planning stage.ITM University, Mumbai is under process for DeemedUniversity, as well as awaiting promulgation of PrivateUniversity Act in Maharashtra.

Future growth drivers: ITM has recorded consistentgrowth, both in student numbers and tuition fees overthe past decade and currently has around 6,000students enrolled across its campuses. The companysees future growth coming from courses centeredaround Hospitality, Allied Health, Industrycollaborative programs and vocational/skill education.

Key challenges faced by the sector: It includes 1)Lack of professional management in Education spacein India. All people have financial / promoter mindset.No one from core education industry experience hasrisen up the management ladder and 2) Funding People are still wary of investing in the sector, due toregulatory challenges, and long gestation periodsthough investments have started to flow in this sector

Education


INDIA

ITM Group of Institutions


13/15


Not Listed

Abhishek Ananda.anand @centrum.co.in+91 22 4215 9853

Serious player in formal education

Mr. Kunal Dalal, Managing Director represented JBCN

Group at our Education Sector Day. Some of the keytakeaways are:

Pre-schools: The company operates 11 owned pre-schools (Childrens Nook) in Mumbai, Nagpur andAhmedabad with 75 students per pre-school. Thestrategy of the company is to provide natural feeders totheir Kindergarten-12 schools.

K-12 initiatives: JBCN has built a strong brand inMumbai.The company operates 4 international schoolsof which 2 are owned and 2 are management contractand offers academic consultancy to 3 other schools. Ina typical model of owned school half of the capex is

spent by either debt or equity and the remaining half isfunded through internal accruals.

Expansion plans: It plans to launch 4-5 new JBCNInternational Schools (Owned) in Mumbai (3) and Pune(2). Post reaching steady state in its business, thecompany plans to launch one new school every 2 yearsfrom internal accruals. JBCN International, Parel,Mumbai would be operational by June 2012 and thecompany has acquired land at Oshiwara, Andheri,Mumbai to set up a school which would take the totaloperating schools to 4.

Marquee investor list: JBCN boasts of a list of highprofile investors who have showed their faith in itsbusiness. They include Rakesh Jhunjhunwala(renowned stock market investor & founder andpartner, RARE Enterprises) who has invested Rs 600mn,Rana Kapoor (MD & CEO YES Bank) and Vimal Shah (MD& CEO Akruti City).

Education


INDIA

JBCN Education Pvt. Ltd.


14/15

14Education Sector Day

Appendix A

Disclaimer

Centrum Broking Pvt. Ltd. (Centrum) is a full-service, Stock Broking Company and a member of The Stock Exchange, Mumbai (BSE) and National Stock Exchange of India Ltd. (NSE). Ourholding company, Centrum Capital Ltd, is an investment banker and an underwriter of securities. As a group Centrum has Investment Banking, Advisory and other business relationshipswith a significant percentage of the companies covered by our Research Group. Our research professionals provide important inputs into the Group's Investment Banking and otherbusiness selection processes.

Recipients of this report should assume that our Group is seeking or may seek or will seek Investment Banking, advisory, project finance or other businesses and may receive commission,

brokerage, fees or other compensation from the company or companies that are the subject of this material/report. Our Company and Group companies and their officers, directors andemployees, including the analysts and others involved in the preparation or issuance of this material and their dependants, may on the date of this report or from, time to time have "long"or "short" positions in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. Centrum or its affiliates do not own 1% or more in the equity ofthis company Our sales people, dealers, traders and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that arecontrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressedherein. We may have earlier issued or may issue in future reports on the companies covered herein with recommendations/ information inconsistent or different those made in this report.In reviewing this document, you should be aware that any or all of the foregoing, among other things, may give rise to or potential conflicts of interest. We and our Group may rely oninformation barriers, such as "Chinese Walls" to control the flow of information contained in one or more areas within us, or other areas, units, groups or affiliates of Centrum. Centrum or itsaffiliates do not make a market in the security of the company for which this report or any report was written. Further, Centrum or its affiliates did not make a market in the subjectcompanys securities at the time that the research report was published.

This report is for information purposes only and this document/material should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to anysecurities, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This documentdoes not solicit any action based on the material contained herein. It is for the general information of the clients of Centrum. Though disseminated to clients simultaneously, not all clientsmay receive this report at the same time. Centrum will not treat recipients as clients by virtue of their receiving this report. It does not constitute a personal recommendation or take intoaccount the particular investment objectives, financial situations, or needs of individual clients. Similarly, this document does not have regard to the specific investment objectives, financialsituation/circumstances and the particular needs of any specific person who may receive this document. The securities discussed in this report may not be suitable for all investors. Thesecurities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this report are organized mayhave restrictions on investments, voting rights or dealings in securities by nationals of other countries. The appropriateness of a particular investment or strategy will depend on aninvestor's individual circumstances and objectives. Persons who may receive this document should consider and independently evaluate whether it is suitable for his/ her/their particularcircumstances and, if necessary, seek professional/financial advice. Any such person shall be responsible for conducting his/her/their own investigation and analysis of the informationcontained or referred to in this document and of evaluating the merits and risks involved in the securities forming the subject matter of this document.

The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies.Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will notmaterialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely bythe authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generallyaccented accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard theinclusion of the projections and forecasts described herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or any other person thatthese projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report aftercarefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts.

The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments.Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth inprojections. Forward-looking statements are not predictions and may be subject to change without notice. Centrum does not provide tax advice to its clients, and all investors are stronglyadvised to consult regarding any potential investment. Centrum and its affiliates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Foreigncurrencies denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the investment. In addition,investors in securities such as ADRs, the value of which are influenced by foreign currencies effectively assume currency risk. Certain transactions including those involving futures, options,and other derivatives as well as non-investment-grade securities give rise to substantial risk and are not suitable for all investors. Please ensure that you have read and understood thecurrent risk disclosure documents before entering into any derivative transactions.

This report/document has been prepared by Centrum, based upon information available to the public and sources, believed to be reliable. No representation or warranty, express or impliedis made that it is accurate or complete. Centrum has reviewed the report and, in so far as it includes current or historical information, it is believed to be reliable, although its accuracy andcompleteness cannot be guaranteed. The opinions expressed in this document/material are subject to change without notice and have no obligation to tell you when opinions orinformation in this report change.

This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not bereproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by thepublic media without the express written consent of Centrum. This report or any portion hereof may not be printed, sold or distributed without the written consent of Centrum.

This report has not been prepared by Centrum Securities LLC. However, Centrum Securities LLC has reviewed the report and, in so far as it includes current or historical information, it isbelieved to be reliable, although its accuracy and completeness cannot be guaranteed.

The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe,any such restrictions. Neither Centrum nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequentialincluding lost revenue or lost profits that may arise from or in connection with the use of the information.

This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the basisof any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to the press or othermedia and may not be reproduced or redistributed to any other person. The distribution of this report in other jurisdictions may be restricted by law and persons into whose possession thisreport comes should inform themselves about, and observe any such restrictions. By accepting this report, you agree to be bound by the fore going limitations. No representation is madethat this report is accurate or complete.

The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and are given as of this date and aresubject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events will beconsistent with any such opinions, estimate or projection.

This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person.Information in this document must not be relied upon as having been authorized or approved by the company or its directors or any other person. Any opinions and projections containedherein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever for any loss arising from any use of this document or itscontents or otherwise arising in connection therewith.

Centrum and its affiliates have not managed or co-managed a public offering for the subject company in the preceding twelve months. Centrum and affiliates have not receivedcompensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for service in respect of public offerings, corporatefinance, debt restructuring, investment banking or other advisory services in a merger/acquisition or some other sort of specific transaction.

As per the declarations given by them, Mr Abhishek Anand, Ankit Kedia, Sanjeev Singh and Siddhartha Khemak, research analyst and/or any of their family members do not serve as anofficer, director or any way connected to the company/companies mentioned in this report. Further, as declared by them, they have not received any compensation from the abovecompanies in the preceding twelve months. Our entire research professionals are our employees and are paid a salary. They do not have any other material conflict of interest of theresearch analyst or member of which the research analyst knows of has reason to know at the time of publication of the research report or at the time of the public appearance.

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Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or Centrum policies,in circumstances where Centrum is acting in an advisory capacity to this company, or any certain other circumstances

Key to Centrum Investment Rankings

Buy: Expected outperform Nifty by>15%, Accumulate: Expected to outperform Nifty by +5 to 15%, Hold: Expected to outperform Nifty by -5% to +5%, Reduce: Expected to underperformNifty by 5 to 15%, Sell: Expected to underperform Nifty by>15%


15/15

Centrum Broking Private LimitedMember (NSE, BSE, MCX-SX), Depository Participant (CDSL) and SEBI registered Portfolio

Manager

Regn NosCAPITAL MARKET SEBI REGN. NO.: BSE: INB 011251130, NSE: INB231251134

DERIVATIVES SEBI REGN. NO.: NSE: INF 231251134 (TRADING & SELF CLEARING MEMBER) CDSL DP ID: 12200. SEBI REGISTRATION NO.: IN-DP-CDSL-20-99

PMS REGISTRATION NO.: INP000000456MCX SX (Currency Derivative segment) REGN. NO.: INE 261251134

Website: www.centrum.co.inInvestor Grievance Email ID: [email protected]

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Tel: (022) 4215 9000

Education Sector - Post-Conference Note - Centrum 23122011

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Transcript of Education Sector - Post-Conference Note - Centrum 23122011