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Showing posts from December 7, 2008

Educomp Solutions: Buy

Investors can buy the shares of Educomp Solutions, considering the bright growth prospects for its key verticals and the stock's sizeable valuation discount to its historic levels. At Rs 2,088, the stock trades at 26 times its likely 2008-09 earnings. This is not cheap under current market conditions. But Educomp has locked into most if its contracts where it licenses digital teaching content on long-term basis, typically over a five-year period. Continuing triple digit growth in high-margin segments such as Smart Class and retail & consulting, a healthy order pipeline for its services that cater to IT-enablement of government schools, support the valuations. Educomp's focus on the education sector also lends resilience against any broader slowdown as schools are unlikely to scale down investments in innovative teaching methods. With the Government's IT-enablement programme continuing on course, the company appears well placed to ride out the present slowdow…

IIP: Negative surprise for foreign investors

Analysts now bet on rate cuts. Our Bureau Mumbai, Dec. 12 Indian equities reacted sharply to negative global cues and the poor Index of Industrial Production (IIP) figures for October 2008.The Sensex fell more than 350 points intraday on Tuesday (from its previous close), though it recovered towards the close of trading aided by substantial gains in some of the index heavyweights. The IIP figure for October fell by 0.4 per cent, its growth rate entering the negative territory for the first time in 15 years. It had risen 12 per cent in October 2007."The markets opened sharply lower on the back of weak global cues and the sentiment got even more sour by dismal IIP data at noon. However a smart recovery was seen in second half of the trading," said a report by Ambit Capital."This is the first contraction since the index began in FY-94. On a cumulative basis, growth during April-October was 4.1 per cent versus 9.9 per cent during the same period last year," s…