Key Data

CMP Rs 201

Sector Real Estate

Face Value Rs.10

BSE Code 532780

52 Week H/L Rs 598/ 170

Market Cap Rs 3718 Cr

Investment Rationale

Robust Business Model- PDL has de-risked its portfolio by diversifying across various cities and verticals:

Superior Execution abilities- Execution is one of the biggest challenges faced by realty companies. PDL plans to complete development of its total existing land bank of 210 mn.sq. ft. in the next 3-5 years. This poses an execution risk in terms of raising adequate working capital and rising construction costs. We expect the company to meet this risk through its pre-selling model and in-house construction activities. Parsvnath has a policy of pre-selling approximately 30-40 percent of its projects which helps the company to meet its cash flow requirements for projects under development. Currently, the company has sold 35 mn. sq. ft. of its 76 mn. sq. ft. area under development. Its in-house construction activities help in keeping construction costs under control and deliver projects on time.

For all future sells, PDL expects the selling price on an average to be around Rs3200 to Rs3500 per sq. ft. (Rs3000 in worst case scenario). The company’s average land cost is around Rs195 per sq. ft. The company expects the total construction cost (including land cost), to be around Rs1400 to Rs1500 per sq. ft. after including the impact of hikes. Given that the average construction cost stays within Rs1500 per sq. ft., the comfort level is higher even in the worst case scenario.

In line with its foray into the hospitality sector, Parsvnath Developers Ltd has announced a joint venture between its subsidiary Parsvnath Hotels Ltd (PHL) and Royal Orchid Hotels Ltd (ROHL) to develop and manage hotels across the country. While PHL would hold majority stake of 70 per cent, ROHL would have 30 per cent stake in the joint venture. Royal Orchid Hotels would manage the hotels even as the joint venture company would own and develop these projects. The joint venture firm would operate under the name ‘Parsvnath Royal Orchid Hotels’.

Consolidated net sales of the company grew 56 percent from Rs298.2 crore to Rs.465.3 crore in Q3 FY08 compared with the previous year. EBITDA margin (incl oi) went up from 30.6 percent to 37.5 percent and as a result net profit grew 109 percent to Rs112.6 crore from Rs.53.9 crore compared to Q307.

Based on its TTM (December 07) earnings, PDL is quoting at P/E multiple of 8.3x at CMP of Rs.201. M Cap/ Sq. Ft stand at Rs177

Key Data

CMP Rs 534

Sector Infrastructure

Face Value Rs.2

BSE Code 523838

52 Week H/L Rs 774/ 315

Investment Rationale

SIL currently has a strong order-book position of Rs9500 crore (5.6x FY07 and 3.9x TTM sales) to be executed over the next 2.5 years. Strong order book of the company provides revenue visibility over the next 2 years.

SIL has diversified business model with presence across major Infrastructure segments namely Buildings & Housing (25.6%), Industrial (17.9%), Bridges and Power (13.9% each), Urban Infra (10.9%), Marine (8.9%), Roads & Railways (6%) and Piling & ground engineering (3%). International orders also increased from 7% in FY06 to 27% in January 2008. In addition it has also commissioned first oil rig for Oil India for two year period at a rentals of $16000 per day. Strong execution abilities and enhanced diversification plans helps SIL, an all-round infrastructure player, to post robust performance going forward.

SIL reported 57.7 percent y-o-y increase in top-line to Rs704 crore in December quarter. Order book increased 15 percent since FY07 to Rs9150 crore. The company also achieved FY07 sales in first nine months of FY08. Operating margin was flat at 10 percent in Q3 FY08, however net margin declined 70 bps due to higher interest expenses. SIL also had robust performance in 9M FY08 with 62 percent growth in top-line and 45 and 25 bps improvements in operating and net profit margin respectively.

Therefore considering the robust order book, strong project execution skills and diversified business model, we expect SIL to post robust performance going forward. We also expect the company to bid for more ultra mega power plants give the massive shortfall in net addition to the over all installed capacity.

SIL bagged Rs302 crore orders for construction of 6 flyovers on Seeb Corniche road in Muscat in Sultanate of Oman. The company has established its construction business in Qatar and UAE and has also received its first order from Oman thereby marking its significant presence in Middle East. On 16 February 2008, it received Rs406 crore orders for civil construction of 10.7 km long viaduct on the Versova – Andheri - Ghatkopar elevated corridor of the Mumbai MRTS project.

The company has entered into a two years contract with Oil India Ltd for on-shore oil drilling exploration at $16,000 per day. It is also negotiating for 2 more rigs at $22,000-$24,000 per day. Government has invited bids for 57 exploration blocks in seventh round of bidding under the New Exploration Licensing Policy. The bidding is expected to attract investment to the tune of $3.5-$8 bn for exploration and discovery.

The company has reported 58 percent and 56 percent growth in net sales and EBDITA to Rs704 crore and Rs70.5 crore respectively in Q3 FY08. The EBDITA margin was flat at 10 percent; however net profit margin declined 70 bps to 3.1 percent due to higher interest and depreciation expenses.

At current market price of Rs534 the stock is quoting at a PER 33.6x. On EV/Sales and EV/EBITDA it is available at 1.36x and 13.01x of TTM December 07 earning respectively.

Key Data

CMP Rs 473

Sector Transformer Industry

Face Value Rs.10

BSE Code 532717

52 Week H/L Rs 807/252

Market Cap Rs 502 Cr

Investment Rationale

Indo Tech Transformers Ltd. (ITTL) was established in 1976 and has till date supplied over ~56,000 transformers of various capacities (upto 100MVA/220KV) to over 3900 customers in India. ITTL has been a regular supplier to southern SEBs (around 75% of ITTL’s sales) and has a market share of around 15% in the southern states.

The company manufactures distribution transformers and power transformers. ITTL has double its transformers manufacturing capacity to 7,450 MVA with the inauguration of its fifth manufacturing facility, with a capacity of 4,000 MVA. The company already has three manufacturing facilities in Chennai and one at Palakkad in Kerala. Further, the objective of setting up the greenfield facility at Kancheepuram was to focus more on manufacturing power transformers up to 315 MVA capacities in 400 KV class.

ITTL has successfully completed its capacity expansion plan from 3450MVA to 7450MVA. The full fledge financial output from enhanced capacity would be seen from Q1FY09 onwards.

The company has order book of Rs 180crs as of Dec 2007. We expect order inflow to continue on the back of ongoing reforms in T&D sector.

The Dry Type Transformers capacity is fully operational. The order book for Dry Type Transformers stands at Rs 80 lacs. We believe that growing demand for Dry type transformers from realty sector will necessitate expansion in the current capacity.

As per the guidance given by the management, revenues & profits are expected to grow at a CAGR of ~37% and ~30% over the next two year.

Indotech net profit rose 67.90% to Rs 12.22 crore in the Q3FY08 as against Rs 7.28 crore during Q3FY07. While, sales of the company rose 15.70% to Rs 52.09 crore in Q3FY08 as against Rs 45.04 crore during Q3FY07.

At current market price of Rs 473, the stock is trading at 12.67x on earnings of Rs 37.34 (TTM Basis). On back of T&D expenditure, healthy order book, enhanced capacity, we put a “Strong Buy” rating on the stock at current levels.

For In-depth Indotech Transformers Ltd research report, company profile along with stock recommendations,  Indotech Transformers Ltd target price and for making informed investment decisions Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com
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Key Data

CMP Rs541

Sector Pharmaceutical

Face Value Rs.5

BSE Code 500124

52 Week H/L Rs 840/580

Market Cap Rs 9097 Cr

Investment Rationale

Dr. Reddy’s Laboratories (DRL) is a leading Indian pharmaceutical company with vertically integrated operations. The company develops, manufactures and markets a wide range of pharmaceutical products in India and overseas. Dr. Reddy’s produces finished dosage forms, active pharmaceutical ingredients, diagnostic kits, critical care and biotechnology products. The company has over 190 finished dosage brands and 60 active pharmaceutical ingredients currently in production.

DRL is a vertically integrated pharmaceutical company with a presence in over 100 countries, and is one of the leading global generic pharmaceutical companies by revenues. The strong portfolio of businesses, geographies and products provide strategic benefits of vertical integration that allow us to excel in an increasingly competitive global market.

The company has successfully entered the US with both Active Pharmaceuticals Ingredients (API) and Generic Formulations. The company has two US-FDA approved plants. It has been exporting its products to the UK, Switzerland, Germany, Spain, Italy and the Netherlands. It also started exporting its formulations in a big way to Russia and has set up an office there.

Dr Reddys Laboratories has entered into an agreement with Skye Pharma PLC to undertake a feasibility study of a product utilizing two of Skye Pharma’s proprietary drug delivery systems. The costs of this study will be paid by Dr Reddy’s. Skye Pharma will also receive an upfront payment. If the feasibility study is successful, full development activities will begin later this year.

Dr Reddy’s Laboratories Ltd (DRL) India’s second-largest pharma company Dr Reddy’s Laboratories (DRL) is betting big on the US market and plans to file about 15-20 more ANDAs (Abbreviated New Drug Applications) filings to introduce its products in 2008. The company filed about 7 para 4 till third quarter of this fiscal. An ANDA is a filing for a US generic drug approval for an existing patented drug. Once approved, the applicant may market or make the generic drug as a low-cost alternative to the patented product. Major generic companies try to exploit the Para 4 filing as part of ANDA as a strategy to market a drug exclusively without any competition from any other generic company.

Dr Reddy, with plans to launch its speciality initiative in the dermatology sector in the US later this fiscal, DRL is scouting for small brands or companies with marketed products that would bolster this foray. The speciality initiative involves taking an existing molecule and looking at better delivery systems. The company has also in-licensed three molecules in this space, from two US companies and one European company.

Dr Reddy’s has posted Q3 FY08 result. The topline has shown a negative growth of 18 percent YoY basis. The EBITDA for the quarter has declined by 39 percent YoY and 8 percent QoQ to Rs 177 crore against Rs 291 crore, Q3 FY07, whereas margins have declined by 25.4 percent to 14.55 percent from 19.5 percent Q3 FY07. The net profit of the company has declined 41 percent YoY and 44 percent QoQ to Rs 62.11 crore. The earnings per share has also declined on QoQ and YoY basis, by 44 percent and 41 percent respectively.

At current market price of Rs541 the stock is quoting at a PER 15.64x. On EV/Sales and EV/EBITDA it is available at 2.29x and 11.05x of TTM December 07 earning respectively

For In-depth Dr Reddy’s Ltd. (DRL) company profile and research report along with stock recommendations,  Dr Reddy’s Ltd. (DRL) target price and for making informed investment decisions Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Key Data

CMP Rs 1592

Sector Banking

Face Value Rs.10

BSE Code 500112

52 Week H/L Rs 2540/ 908

Market Cap Rs 83787 Cr

Investment Rationale

Results of the bank were head of our and market estimates, net profit of the bank showed robust growth of 69.8 percent yoy to Rs1808.6 crore driven by strong growth in business, improvement in the margins, higher growth in fee and trading income. At CMP of 1592, the bank is trading at 13.2 Dec’07 TTM earnings and 2.3x Dec’07 book value. We expect the profits of the bank to grow by 40 percent to Rs 6358 crore in FY08E and by 15 percent to Rs7311 crore in FY09E. We believe the current market price of the bank is already reflecting the negatives related to farm loan waiver and stock is available below its intrinsic value. We value consolidated SBI at Rs2482 crore ie core banking business at Rs1754, associate banks at Rs310, SBI Fund management at Rs29, SBI Life at Rs324 and other subsidiaries at Rs 65 per share of SBI. We recommend Strong BUY on the stock.

Unlike in the earlier quarters, the bank has shown stronger growth in its business, advances of the bank showed higher growth of 26 percent to Rs389733 crore in Q3FY08 and deposits witnessed healthy growth of 26.2 percent to Rs510132. For the year FY08E, we expect the advances of the bank to grow by 25 percent and deposits to grow by 22 percent.

During Q3FY08, net profit of the bank showed robust growth of 69.8 percent to Rs1808.6 crore driven by strong business growth, improvement in the margins, higher growth in fee income and trading income. For first nine months of the current fiscal, net profit of the bank showed healthy growth of 59.0 percent to Rs4846 crore.

At CMP of Rs1592, the bank is trading at 13.2x Dec ’07 TTM earnings and 2.3 Dec’07 TTM book value. The stock is corrected 37 percent from its peak levels, the valuations of the bank are attractive at the current levels. We believe the current market price of the bank is already reflecting the negatives related to farm loan waiver and stock is available below its intrinsic value. We value consolidated SBI at Rs2482 crore ie core banking business at Rs1754, associate banks at Rs310, SBI Fund management at Rs29, SBI Life at Rs324 and other subsidiaries at Rs65 per share of SBI.

For In-depth State Bank Of India LTD (SBI) company profile and research report along with stock recommendations,  State Bank Of India LTD (SBI) target price and for making informed investment decisions Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Key Data

CMP Rs 598

Sector Banking

Face Value Rs.10

BSE Code 500247

52 Week H/L Rs 1435.5/ 425

Market Cap Rs 20592 Cr

Investment Rationale

In order to keep their borrowing costs under control, banks have always focused on garnering CASA deposits. Excessive mismatch between growth in credit and growth in CASA deposits drove banks to other high-cost alternatives, such as term deposits. Kotak Mahindra Bank is continuously increasing its CASA ratio to avoid the mismatch. The CASA ratio has increased from 19 in FY06 to 22 in FY07 and it was 24 in Q3FY07

Kotak Mahindra Bank (KMB) together with its subsidiaries has a presence across financial services – lending, broking, investment banking, life insurance, asset management, and proprietary investments. For the first time, the bank’s(standalone) profitability crossed INR 1 bn mark up 124percent,buoyed by strong core lending operations. For the first nine months of the current fiscal, net profit of the bank grew by 115.9 percent to Rs224.7crore. Main drivers of the growth were improvement in margins, strong loan book growth, robust performance of Kotak Securities on account of buoyant capital markets, continued traction in asset management and a stronger than industry growth by Kotak Life.

For In-depth Kotak Mahindra Bank Ltd. company profile and research report along with stock recommendations including Kotak Mahindra Bank Ltd target price and for making informed investment decisions Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Key Data

CMP Rs

Sector Diversified

Face Value Re.1

BSE Code 500875

52 Week H/L Rs 239/ 140

Market Cap Rs 69864.58 Cr

Investment Rationale

ITC is the India’s largest FMCG Company having its presence diversified across segments which includes cigarettes, hotels, FMCG, paperboard and agri-business. Being the market leader in cigarettes, ITC enjoys the dominant market share of 73 percent and 84 percent in volumes and values. Over the past six ITC has utilized its excess cash in new businesses which like braded flour, biscuits, and hotel business thus broad basing its business profile further. The way in which ITC has built its business especially in the non-cigarette segment is commendable and this business is expected to lead the company’s growth going forward.

The company in a short span of time has taken the leadership position of HUL in the branded flour segment inspite of entering in this segment much alter than HUL. Through its brand Aashirwad, ITC enjoys a healthy market share of 52 percent in this segment. Aashirwad is growing at a rapid pace in metropolitan and large cities due to improving awareness of the product, price parity between flour mill atta and branded atta. In a span of just four years, the company is able to have a healthy 12 percent market share in the biscuit segment through its brand Sunfeast. The contribution of Glucose and Non-Glucose categories is revised with non-glucose segment contributing over 60 percent in the next three years thereby improving the margins of the company.

ITC has built a strong platform for its growth through e-Choupal and Choupal Sagars and is best placed compared to others in cashing-on from the growing rural demand. The e-Choupal network comprises of more then 6500 e-Choupals and covering 40000 villages and ~4 million farmers. Apart from the e-Choupal network, ITC also has 21 Choupal Sagars, a chain of retail malls that caters to the needs of rural community by offering FMCG products, farm equipments, medical facilities, banking operations and vehicles. The company has also entered in retailing of fruits and vegetables through three Choupal Fresh cash and carry stores and six Choupal Fresh retail stores.

ITC has more than 3000 rooms under its hotel division and 2200 rooms under the management contract system, having its presence across key cities in India. ITC- Welcome group and Starwood Hotels and resorts has entered into 10 year collaboration to bring the brand Luxury Collection in India. The company further plans to add another 1500 rooms over the next 3-4 years. Among the major expansion plans include a property in Banglore consisting of 300 rooms, which is expected to commission in FY09, 600 rooms hotel in Chennai is expected to be commissioned in second half of FY10.

After launching its e-Choupal retail stores in rural India, ITC is now looking at new retailing opportunities in the semi-urban and urban markets. Considering ITC has already made a foray at the top-end of the retailing spectrum with its Wills Lifestyle stores, scaling it down with more mass products especially in the FMCG space in urban and semi-urban markets is a possibility currently being explored by the retail and consumer products company.

ITC has launched Vivel Di Wills and Vivel range of soaps in an attempt to widen its product portfolio and strengthen its position in the Rs2700-crore skincare market. While the Vivel DiWills range is available in two variants, the Vivel range is available in four variants. In India, only 22 per cent of the population uses skincare products. The segment, however, has been growing by 16-18 per cent annually, according to a report by Credit Suisse, a financial services company. The penetration in urban markets at 31.5 percent, is higher than that in rural markets, where it is only around 18 percent. With the launch of new range of products the profit margins of the company are expected to have a healthy growth going forward.

Net sales for the quarter, at Rs.3458 crores grew by 11 percent with a 50 percent growth in revenues from the newer FMCG businesses such as Foods, Lifestyle Retailing and Stationery coupled with healthy increases in revenues from the Hotels and Paperboards and Packaging businesses mitigating the muted growth in the cigarette business as a result of significant increases in taxation. While the Company’s Post-tax profit at Rs831 crores grew by 15.8 percent. The mix between the cigarettes and the non-cigarettes business lines at the net level remained largely unchanged at 56 percent which translated into a drop in the EBIDTA margin. The other income increased by 97 percent increase in the other income was driven by higher treasury income as well as effects of commodity swaps assisted by net profit growth of 15.8 percent y-o-y.

At the current market price of Rs191, ITC is quoting at P/E multiple of 23.69x its TTM Earnings per Share of Rs8.06. On EV/Sales and on EV/EBIDTA basis it is quoting at 5.11x and 14.29x respectively.

For In-depth ITC Ltd. company profile and research report along with stock recommendations including ITC target price and for making informed investment decisions Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone:91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone:91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Key Data

CMP Rs 435

Sector Construction

Face Value Rs.2

BSE Code 530773

52 Week H/L Rs 575/ 241.15

Market Cap Rs 5637 Cr

IVRCL Infrastructure and Projects Ltd. (IIPL) is an engineering, procurement, construction, commissioning (EPCC) company having geographical presence in 15 states across India. IIPL has a major presence in the water and irrigation sector, along with expertise in roads and bridges, buildings and industrial structures, and power transmission and distribution business.

Investment Rationale

IIPL currently has a strong order-book position of Rs10597 crore (4.24x FY07 sales) and more than 60% of the order backlog is in irrigation sector, remaining 40% is contributed by transportation, urban infrastructure and power transmission and distribution business.

Increased thrust on irrigation augurs well for the company

Allocation to Accelerated Irrigation Benefit Programme (AIBP) increased by 81.8% to Rs20000 crore in 2008-09. In addition, Irrigation and Water Resources Finance Corporation (IWRFC) is proposed to be set up with initial capital of Rs100 crore to fund long-gestation irrigation projects. Andhra Pradesh government also allocated Rs4900 crore for irrigation in 2005-09. These allocation promises significant growth opportunities for the company.

IIPL recorded 84.7 percent y-o-y growth in net sales in 3Q FY08. It also achieved net sales of Rs2374.7 crore in 9M 08 which is more than FY07 top-line. IIPL also recorded 168 bps and 74 bps y-o-y improvements in operating margin in 3Q and 9MFY08 respectively. On net margin front, it had 57 and 68 bps y-o-y improvement in 3Q and 9M FY08 respectively. Therefore considering the increased allocation by government in irrigation segment, strong order book and diversified business model, IIPL is well placed to post robust performance going forward.

Finance Minister has increased allocation to Accelerated Irrigation Benefit Programme (AIBP) by 81.8 percent to Rs20,000 crore in FY08-09. In addition Rs500 crore has been allocated in centrally sponsored scheme on Micro Irrigation with a target of covering 400,000 hectare. Irrigation and Water Resources Finance Corporation (IWRFC) is proposed to be set up with initial capital of Rs100 crore to fund long-gestation major and medium irrigation projects.

IIPL bagged various contracts worth Rs996.5 crore in last fifteen days. On 21 February 2008, the company bagged orders worth Rs518 crores in water, irrigation and power sectors from utilities of various State Governments. It also bagged irrigation order worth Rs478.5 crore for execution of canal and tunnels from Narmada Valley Development Authority. The project is expected to be completed in 48 months.

Net sales for the company increased 84.7 percent to Rs985.6 crore in 3Q FY08 compared to 3Q FY07. We believe the growth in top-line was due to increase in order book. Operating margin improved 168 bps y-o-y in 3Q FY08 as the company holds the client to be responsible for the procurement of materials in some orders. Net margin improved 57 bps in 3Q FY08 as increase at the operating level was partially offset by higher interest and tax expenses.

At current market price of Rs435 the stock is quoting at EV/Sales and EV/EBITDA of 1.81x and 18.15x earnings on TTM basis.

For In-depth IVRCL Infrastructure and Projects Ltd. (IIPL) company profile and research report along with stock recommendations including IVRCL Infrastructure and Projects Ltd. (IIPL) target price Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone:91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com

Key Data

CMP Rs 3467.10

Sector Computers-Education

Face Value Rs.10

BSE Code 532696

52 Week H/L Rs 5650/ 951

Market Cap Rs 5972.38 Cr

Investment Rationale

The spending boom in education services is a part of a long term systemic upgrade of the education system being carried out, to bring the standards of education across the country on par with global levels. Educomp Solutions Ltd (Educomp) unique service mix will play a big role in India’s rebuilding of the Indian education infrastructure. Governments across the world are increasing education spending and creating structures to fund the “business of education”. At present the K12 education spends in India is approximately 5% of the GDP and is expected to increase as education institutes increase their penetration and market reach.

SmartClass and ICT solutions collectively contribute to 82% of Q3FY08 sales. While the company has reported a marginal decline in EBITDA margins, it is favorably positioned to benefit from the increased outlay in education spending. The EBIDTA margins have declined to a current level of 50.74% for Q3FY08 as against a low of 54.17% in Q3FY07 because of growth in cost of sales. For the 3QFY08 the Company’s Total Income increased by 159.39% y-o-y, EBIDTA increased 135.34%, and PAT by  131.62% y-o-y. However the EBIDTA margin declined from 343bps from 54.17% to 50.74% and PAT margin by 319bps from 29.77% to 26.59%.

In the Union Budget 2008-09, the total allocation for the education sector (including the North Eastern Region) has been increased by 20 per cent from Rs.28,674 crore in FY2008 to Rs.34,400 crore in  FY2009. Allocations to secondary education in FY2008 will be Rs.4,554 crore. We expect these  proposals to favorably impact Educomp’s ICT Solutions business which provides educational infrastructure to government schools. The Union Budget 2008-09 has also provided Rs85 crore in FY2008-09 for the construction of a knowledge society, headed by the Ministry of Science and Technology which will provide opportunities for research careers (22-23 years), and scholarships for continuing science education (17-22 years). This would favorably impact Educomp’s Professional Development and ICT Solutions business. On 25th Jan 2008, Educomp announced its collaboration with Ansals Properties and Infrastructure Limited (APIL) along with its Associate (Knowledge Tree Infrastructure Limited) to provide School Building and Infrastructure to Educomp Infrastructure. APIL is a real estate player engaged in constructing / developing properties and Infrastructure while EIPL specializes in operating & managing schools. Under the broad terms of the collaboration APIL will build up the School Building and Infrastructure & lease out the same to EIPL for 60 years. EIPL will further tie up with various independent trusts to operate the schools. This agreement will accelerate the school roll out plan for EIPL and enable the company to leverage its related services in similar fields. On 11th January 2008, Educomp announced its MOU with IIT Chennai, to develop a Science Enrichment Program to deploy in classrooms. The program would develop training materials in Physics and Chemistry on the CBSE syllabus, from class 5 to 12. In addition training resources for science teachers and advice from professors of the IIT would also be provided. This collaboration would enable the company to develop educational services in science that are on par with the latest in the industry.

At the CMP of Rs 3467.10, Educomp is quoting at a PER of 115.45. On EV/Sales and on EV/EBIDTA basis it is quoting at 112.83x and 55.05x respectively based on consolidated twelve months earnings ending as on Dec’07.

For In-depth Educomp Solutions Ltd company profile and research report along with stock recommendations including Educomp Solutions Ltd target price Click Here.

Kisan Ratilal Choksey Shares and Securities Pvt. Ltd.
1102, Stock Exchange Tower, Dalal Street, Mumbai 400 001
Phone: 91-22-56338050 / 66965555. Fax: 5633 8060
Members: BSE & NSE
www.krchoksey.com