EVERONN SYSTEMS Only Expected to Grow

Education is big business in India and given the population and the illiterate, this business is only expected to grow. In India there are 2.80 lakhs private schools and 17625 colleges, so far less than 1% are covered by organized players who provide technology enabled education. Everonn provides virtual and technology enabled learning systems. Currently Everonn has its presence in 4362 school, in 12 states and has aggressive plans to take the number to 5164 in FY09 and to 7514 by FY10.

And going by the performance it has belted out in second quarter ended 30th September 2008, looks like its target could be met. YoY, its consolidated net sales rose 89% and despite a 81% rise in total expense of which employee cost by 98%, the company posted a 151% rise in PAT at Rs.6.51 crore.

In Q2FY09, it managed to add 279 new schools, which is a phenomenal growth given over the last 2.5 years, it was able to add just 500 totally, into the virtual classrooms. Less than 35% business of the company comes from Govt institutions, so to that extent, it’s assured of timely payments, at least for the 65% of its business.

Going by the past track record, the first and the third quarters are usually lean period and all the new business comes in during Q2 and Q4. So if the same trend continues, after a lean Q3, it hopes to have another robust Q4 and expects to end the current fiscal on a high note. In FY09, it has projected a topline of Rs.190 crore and bottomline of Rs.30 crore. Seems a bit too ambitious, given the slowdown and the liquidity crunch.
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