Pledged shares are there for more than a year now, it’s not a new development. Similarly, the change of auditors was intimated along with the Mar 16 results itself. The auditors have already signed the FY 16 Balance Sheet. So there is no need to panic. But I agree with you, one needs to be watchful with this company.
Kotak in its Q1FY17 result update on Mt Educare seems to make some very interesting and pertinent points. Wonder where they sourced the data from? Anyways, I quote:
Achieving 25% revenue growth in FY17 would be challenging
MT Educare targets to grow at over 25% in terms of revenue in FY17 led by aggressively marketing its Robomate product business, efficiently utilizing its existing branch in classroom business, etc. The management targets to maintain full year margins of ~20% in the longer run. We believe that achieving such growth target would be a challenge in FY17, considering slow Q1FY17 and no consolidation of test prep business of Gayatri Education in FY17. The company had earlier planned to consolidate Gayatri Education’s test prep business in FY17. But they have deferred the same considering delay in turnaround at the bottomline level of the same.
(I do not recall the company/management discussing this before. Implications?)
The report also mentions that the share of institutional and non-institutional students for Robomate in Q1 is roughly 50% each. The Company ppt makes no such disclosure. Again, I don’t remember the company disclosing any institutional sales of Robomate in the past. Who are these institutional buyers?
Any idea if the following line items are in line with what is expected from a company engaged in coaching students
- Other Trade Receivables (41 cr)
- Long term Loans and Advances to others (77 cr)
There seems to be inadequate provisioning for them, they are unsecured as well. Require a second opinion here because if they turn bad, it can have a material impact on profitability.
Both Trade receivables(Rs. 71 cr) and short-term borrowings(Rs.73 cr) have doubled since March. Has the company given an reason?
Also, what could the impact of demonitization? Even if company’s books are clean, what about the entities which owe the receivables. Will the be able to pay back?
Q3 FY17 results are out
- Sales down 10% QoQ
- EBITDA down 90% QoQ
- Advertisement expense has gone up from 2.6 Cr (Q3 FY16) to 11.5 Cr (Q3 FY17)
What will be the impact of transfer of Robomate Business undertaking to wholly owned subsidiary. Please share your views.
Also do you see positive triggers in the form of (as per latest concall):
- announcement by HRD Ministry regarding uniform textbooks for CBSE Board. Similar announcement expected for ICSE too.
- Digital India - a boost to Robomate sales, which again is a scalable business.
3.Gayatri Edu - proposed to be merged in 2017-18. It is now EBITDA positive being Rs. 4 cr on a topline of Rs.120. Expected EBITDA of 12-13 cr on topline of Rs.190 cr in 2017-18. - Major part of content and platform has been completed till date for Robomate. Hence going forward Capex on this count to be 5-6cr every year.
5, Reduced cycle from Govt. projects. Mr. Shetty has stated that they have a strong relationship with the Govt., good margins and assure payment.
Concerns:
1.Short term debt of Rs.115 cr. Out of this Rs. 40 cr for working capital for UVA and rest for marketing of Robomate. Against this the have cash of 10 cr.
2.Pledging of shares by Mr. Shetty - being 70% of his holdings
FY17 Results are out. Net profit has gone down. Bigger issue is with the balance sheet borrowings-~145 cr and receivables ~121cr(on consolidated sales of 300 cr over the whole year). What is the reason for such huge receivables, considering the company collects its fees upfront and government business is not that big? Now the promoter had pledged almost all his shares, which will probably be sold by the bank if there is a sizeable decline in share price.
I wonder if this deal is in progress…Any idea?
Zee Learn gains 5% as company may buy equity stake in MT Educare
MT Educare shares also rallied 14 percent following the news but wiped out those gains in later part of the session to trade lower.
MT Educare officially announced that there is no such deal in the discussion.
It’s official now,
Zee Learn will have 44% stake after preferential allotment.
Post preference allotment Mahesh Shetty’s holding will be around 26%
Public holding will be reduced at around 31% because of dilution.
Zee learn has given an open offer for additional 26% stake from public.
In recent interview at Bloomberg quint, Dr. Chhaya Shastri has not denied to offer remaining 26% stake of Mahesh Shetty to Zee learn in case of not fully subscribing open offer for public.
What will be the future scenario, where members can share their valuable opinion.
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Will Zee Learn give additional open offer of 5% at higher rate for having 75% stake (44 + 26 +5 = 75) ?
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Will MT get delisted after having 75% holding?
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Or Will MT be merged with Zee Learn, where MT’s existing share holder will get expensive Zee learn’s share.
In today’s result MT posted more than 100 crore loss for give loan. I thing this is related to Gayatri.
In current public shareholding activity, Amitabh Sonthalia exited and Rajastah Global has increased their stake.
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Maybe the reason.
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Byju’s valuation is $5bn+, MT Educare is less than $100mn. Even if they become a distant competitor to Byju’s, it can see crazy upside. Question is - can they take on Byju’s (backed by Facebook)?