Welcome to Sana Securities! Login | Subscribe Now.

MT Educare Stock Analysis

HomeCompanyMT Educare Stock Analysis

MT Educare (“MT Educare” or the “Company) provides online and  offline tutorials to standard 6 to 12th of CBSE and state board (Maharashtra and Gujarat) and for national level entrance examinations  including for MBA entrance, IIT , AIPMT and other professional courses  like chartered accountancy. The Company is currently serving 9 million students across India. MT Educare provides education support and coaching services under the brand name “Mahesh Tutorials”. It has its presence in 128 locations across 7 states and union territories of India.

mt educare segment revenue

The Company was named as one of the ‘Top 200 Forbes Asia Best under a Billion’ Company in 2013 in Singapore.

For Financial Report – Visit Here

Segment

No. of Students

School (9 & 10th CBSE, ICSE, MH State board)

32,860

Science (11 & 12th, engineering & medical entrance)

20,030

Commerce/UVA (11 & 12th commerce, CA & MBA Entrance, skill development)

33,679

Robomate (School Section (IX & X), Science section, Commerce section)

46,835

Others

NIL

Totals

1,33,404

Pan India Presence

The Company has pan India presence through its 270 plus coaching centres across different regions 150+ locations in 9 states & 1 union territory including Maharashtra, Karnataka, Tamil Nadu, Gujarat, Punjab, Haryana, Chandigarh, Kerala, Andhra Pradesh and Telangana.

mt educare

Industry Analysis Growth Opportunities

The global economy is going through structural transformation and its effects more seems on service and capital intensive manufacturing sectors. This will require workforce of 3.3 billion by end of 2020 as per the latest EY Report. In India, 90% of its GDP and 75% of its employment will be generated from the service and the manufacturing sectors which will immensely increase demand for skilled labour, innovators and thinkers.

At present, India’s Gross Enrolment Ratio (GER) is 15% in higher education which is much lower than the world average of 23%. The aim is to increase the GER to 21% by the end of the 12th Plan and 30% by 2020.currently almost 65% of higher educational institutions are in the private sector and their rate is increasing continuously.

INVESTMENT RATIONALE

  • Large pool of qualified and experienced faculty -1250 plus faculty and reduced dependency from experienced faculty through extensive training workshops for newer faculty members.
  • Organized and diversified player in the education support and coaching services industry -Competitive position in Maharashtra in terms of number of coaching centres and Reputable Test Prep player in Karnataka through 18 college level tie-ups.
  • Introduction of modern technologies for more interactive teaching as well online access to recorded and online lectures through Robomate +
    • Robomate+© – Suite of Digital Product
    • Robomate+© Mobile App
    • Robomate+© Admin – An LMS Application to Create, Package and Distribute Digital content to users
    • RoboRepo +© – Content Management System to centrally store and manage all digital assets e.g. AV lectures, media assets, notes, books, etc.
    • Robostore-An eCommerce Portal to monetize digital content in retail market (non-MT Students)
  • Entered in an arrangement with SG education society known as one of the leading educational institution in Andhra Pradesh and Telangana for intermediate education (class XI-XII) and currently owns 53 colleges in the two states with over 33,500 students in medical and engineering courses.
  • Government has launched a scheme under the name MANAS (Maulana Azad National Academy for Skills) under which the Company has successfully trained 1550 students and earned a revenue of Rs.1.47. The Company plans to undertake more projects under this scheme.
  • Technology driven growth: In order to increase its reach, the Company launched Learning Management System (LMS) in the academic session of 2015-16. LMS is enabled via free tablet offered to students. LMS shall be fully implemented across major verticals by the year 2016-17 increasing the reach of company all over India.
  • Expansion in North India and Karnataka: running IIT coaching business in Mumbai branded ‘Lakshya’ growing well and is gaining good traction. The number of student serviced in the IIT business increased by 158% from 819 in FY14 to 2,111 in FY15.

INVESTMENT CONCERNS

  • Over dependence on one region – MT Educare’s centres are concentrated in Mumbai contributing more than 80% to the total revenue.
  • Competition risk is a major challenge faced by the company. All its future endeavours are thus focused towards increasing their presence and gaining competitive advantage.
  • Structural or regulatory changes may impact company’s role in the value chain. Currently, there no centre or state legislation to regulate or restrict operations of private coaching business.
  • Low entry barriers – Coaching industry not being cash intensive has very low entry barrier especially from unorganized market. High return ratios in the business are increasingly attracting private equity participation.
  • Due to more and more schools converting from State Board (SSC) to CBSE / ICSE board – MT Educare’s revenue (substantial) coming from coaching to state board students may suffer.

Written By Puneet Singh

Post Tags -

2 Responses to “MT Educare Stock Analysis”

By saurabh kurichh - 21 June 2016

Love the way u structure things out and make it presentable

By Rajat Sharma - 2 July 2016

Thanks Saurabh.

Leave a Comment