Everonn Systems:-A great buy in the education sector

Scripscan:Everonn Systems India Ltd
cmp:85
Traded in:Nse-bse

Story:Everonn is a knowledge management, education and training company operating through two business units — Institutional education and IT infrastructure services and virtual and technology-enabled learning solutions (ViTELS ). Under the first unit, the company identifies IT education projects under various government initiatives.It enters into contracts with schools/colleges for providing the hardware, connectivity, content and faculty.The second segment, under the ‘Zebra Kross’ brand, focusses on providing VSAT-enabled training and learning solutions (curricular and non-curricular) to the school, college, corporate and retail segments. Besides, the company is lead partner of Hughes Communications for providing management courses from reputed national institutions through remote learning.India has one of the largest education systems in the world, covering more than ten lakh schools and twenty crore students. Less than 10 per cent of this market is penetrated by IT education and infrastructure services. The increased allocations in the Budget towards education and schemes such as ICT@Schools and Sarva Siksha Abhiyan are likely to widen the potential market for Everonn.Everonn Systems recorded a strong 49.5% yoy growth in its consolidated Revenues in 3QFY2009 to Rs 43.5 cr (Rs 29.1 cr).I expect Everonn to record robust CAGRs of 68% and 61% in Top-line and Bottom-line respectively, over FY2008-10E.At cmp of 85 its just quoting at 4 times its 1 year forward earnings.Given the company’s strong growth trajectory and the fact that it has consistently out-performed my estimates, apart from its strong positioning to leverage on the significant opportunities for growth prevalent in the Indian Education Sector,I feel its a great buy at present levels.