Page 4 - 2120_Value_Plus_Oct_2016

MT Educare Ltd. Target Price Rs 159 FUNDAMENTAL

BUY 534312 STOCK
Value Parameters MT EDUCARE
BSE Code and medical entrance exam preparation, IIT test
NSE Symbol Rs 130 preparation, and MBA entrance test preparation as
CMP (As on 30th Sep, 2016) Rs 10 well as coaching for CA exams. It has a strong base
Face Value 200/114 of more than 1300 faculty. MT Educare leverages on
52 Week High/Low result oriented quality coaching with technology
Market Cap (Rs cr) 586 based classrooms and digitized content.
EPS (Rs) (FY16) 8.1
PE ratio (x) 17 Investment Rationale

Shareholding Pattern % (Jun’ 16) § Leading player: MT Educare is the one of the leading
players in India’s educational coaching industry
Company Overview with diversified portfolio.

MT Educare is engaged in the business of providing § Well recognized brand: By virtue of being one of the
education support and coaching services under the brand largest and oldest players in the coaching industry,
name “Mahesh Tutorials”. It has its presence in 163 locations Mahesh Tutorials enjoys a good brand image and is
across 13 states and union territories of India. The company a household name in the Mumbai city, besides being
operates under four main business verticals - School, a popular brand in other states. MT Educare, the
Science, Commerce and Robomate+. It also conducts corporate face of the Mahesh Tutorials brand, has
coaching for competitive exams which includes engineering established itself as a trusted institution in education
support and coaching services provider.

§ Experienced faculties: Future growth potential,
career opportunities, stock options and low attrition
rate has contributed to a stable, committed and a
passionate pool of experienced faculty members at
MT Educare, which has led to a sustained growth of
the Company.

§ Diversified portfolio: Company has evolved its
product portfolio to cater to students from diverse
backgrounds, thus expanding its outreach. The
diversified portfolio enables it to optimally utilize
its infrastructure by catering to timings of different
schools and colleges for different classes throughout
the day.

§ Result-oriented coaching methods: Company has
developed scientific coaching methods and a system
of imparting conceptual knowledge and analytical
skills to address either subjective or objective tests
and thus enable students to improve their accuracy
levels and speed.

Valuations

We expect to maintain 15-16% top line growth for
FY17E. At CMP of Rs 130 per share the stock trades at
a P/E multiple of 13 (x) to its FY18 estimates. We have
valued the stock at its FY18E forward P/E of 16 (x) and
arrived at a fair value of Rs 159 per share. We initiate
coverage with “BUY” rating on the stock.

4 ARIHANT CAPITAL ¡ OCTOBER 2016