MT Educare AGM key takeaways -Downside risk capped high gains on the cards

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Today evening i happened to attend the company MT Educare’s AGM. Initial feelers are that the company is on a very strong wicket and if managed right it can really launch itself into a totally new orbit over the next three years. Education and in particular primary education is an industry which has always been around. Only now its getting more organized.

At Rs 105 the stock is decently valued given a projected EPS of 5 for FY13 and 8 for FY14. Typically education stocks quote around 25x and hence a target of Rs 200 over the next 15-18 months is not too difficult. So although I am extremely bearish overall in the market education being a recession proof business is a good defensive play apart from being one of the growth drivers over the next 10-15 years.

Most encouraging takeaway from the AGM was that the management is guiding for a 50% pay out ratio. 50% pay out ratio is an awesome proposition and MT Educare is definitely on my radar.

Click on this link to listen to the audio MT Educare low risk high yielding investment idea

Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither or myself accepts any liability arising out of the above information/articles.

Vinit Bolinjkar Head of Research, Ventura Securities Ltd
Tel: | Mobile: 0 9730836363

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