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Everonn Education Ltd
(EVED.BO / EEDU IN)
Well-positioned in an under-penetrated market
■ Main investment thesis: The Indian education sector is on the cusp of
multi-year strong growth driven by a favourable set of factors and low
penetration of organised private players. Demographics are favourable with
460mn children below the age of 20. We conservatively expect Everonn to
deliver 45%-plus revenue CAGR over the next three years from its traditional
business. Future investments, currently not built into estimates, include the
school management, B-school and vocational training segments which could
drive further growth. We see short-term catalysts in the form of strong growth
and school/college additions in the Dec-10 and Mar-11 quarters. Over the
longer term, we believe that growth in new initiatives and margin leverage
from existing businesses should drive consensus upgrades.
■ India exposure and plans: Everonn is differentiated from competitors in the
sector from its end-to-end value positioning. While it’s traditional strengths lie
in the higher education space through its pathbreaking VSAT model,
investments over the last three years have seen the company strongly
positioned in the pre-school and K-12 segments as well. The company now
has the largest network of colleges (1,800) and the second largest number of
schools (1,200) in the country on its ViTELS platform. Quality and
acceptance of the product is borne out by rising classroom penetration and
high repeat orders from existing customers.
■ Impact of survey findings: Our survey indicates that Indians allocate
among the highest proportion (7.5%) of spendings on education in the
region. We also observe that enrolment in private and English-medium
schools increases rapidly with income. Given the acute need for quality
education and willingness of consumers to spend on this segment, we
believe Everonn, with its differentiated and innovative offering, is well placed
to cater to these needs.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Everonn Education Ltd
(EVED.BO / EEDU IN)
Well-positioned in an under-penetrated market
■ Main investment thesis: The Indian education sector is on the cusp of
multi-year strong growth driven by a favourable set of factors and low
penetration of organised private players. Demographics are favourable with
460mn children below the age of 20. We conservatively expect Everonn to
deliver 45%-plus revenue CAGR over the next three years from its traditional
business. Future investments, currently not built into estimates, include the
school management, B-school and vocational training segments which could
drive further growth. We see short-term catalysts in the form of strong growth
and school/college additions in the Dec-10 and Mar-11 quarters. Over the
longer term, we believe that growth in new initiatives and margin leverage
from existing businesses should drive consensus upgrades.
■ India exposure and plans: Everonn is differentiated from competitors in the
sector from its end-to-end value positioning. While it’s traditional strengths lie
in the higher education space through its pathbreaking VSAT model,
investments over the last three years have seen the company strongly
positioned in the pre-school and K-12 segments as well. The company now
has the largest network of colleges (1,800) and the second largest number of
schools (1,200) in the country on its ViTELS platform. Quality and
acceptance of the product is borne out by rising classroom penetration and
high repeat orders from existing customers.
■ Impact of survey findings: Our survey indicates that Indians allocate
among the highest proportion (7.5%) of spendings on education in the
region. We also observe that enrolment in private and English-medium
schools increases rapidly with income. Given the acute need for quality
education and willingness of consumers to spend on this segment, we
believe Everonn, with its differentiated and innovative offering, is well placed
to cater to these needs.
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