Everonn Education - Small Cap Stock From Education sector

Everonn Education (EEL) offers services spanning educational and training content, design & execution of learning initiatives, and setting up infrastructure.

Here is analysis of one more stock from small cap stock list for 2010.

Everonn Education (EEL), formerly known as Everonn Systems India, started off in 1987 as an IT education provider. It has four subsidiaries, Everonn Education Resources Solutions, Toppers Tutorials Pvt, Everonn Infrastructure and the recently acquired AEG Skill Update.

Profits rose from Rs 4 crore in FY2007 to Rs 23 crore, more than a four-fold rise at end FY2009. Though it is growing at a scorching pace it managed to keep debt under control — its debt:equity ratio fell from 0.59 to 0.23.

In Q2FY2010, consolidated revenues grew 70 per cent YoY to Rs 73.13 crore (standalone 72.5%), while its profits were up 81 per cent to Rs 11.78 crore (standalone 147%). EEL is withholding dividends on the back of massive investments to fund expansions.

Institutional interest in the stock has consistently increased, rising from 22.53 per cent in March, 2009 to 34.79 per cent in September, 2009. Way back in 2008, P/E funds like Blackstone had shown interest in the company. Funds response to EEL has been lukewarm compared to other small-caps. Till October, 2009 only 15 funds have bet on it.

Market Cap 605.72
EPS (TTM) 18.29
* P/E 21.90
P/C 14.10
Book Value 137.43
Price/Book 2.91
Div(%) 0.00
Div Yield(%) -
Market Lot 1.00
Face Value 10.00
Industry P/E 42.82

The stock is trading at 21.71 times its trailing EPS of Rs 18.28. It gained 74.76 per cent this year (till November 27). It's historic value is 35.51x its EPS. At current valuation it’s still 38.86 per cent below that level. That makes for a credible stock case.

Go back to Small Cap Stock List For 2010