I was thinking of a small entry into one of the education sector stocks. Risk-return trade off  in edserv looks reasonable. My take below:

Positives

1. Decent growth prospects both in school education & staffing/placement solutions.  Humanware Education & Deployment System (HEADS) model - not enuf details.

2. Said to be having good presence & support with 500 Edcentres/counters.

3. EPS-FY10 of Rs 15; dividend 30%; high margins but can't read much into its triple digit growth numbers coming from a small base and business model is yet to settle.

4. I don't like companies giving definite earnings guidance, and this gives a rosy one with Rs 35 for FY11  But can't dismiss it altogether given size of business opportunity.

5. Interesting acquisitions –moves  made with the IPO proceeds.

Negatives

1. Husband-wife type management team offers limited bandwidth. Any first hand info welcome. Hear about ex-SSI connection, price manipulation etc.

2. QIP is on the cards. Future dilution can't be ruled out either.

3. Will be sometime (read few years) before edserve can stabilise revenue contributions from different streams & margins. So analyzing present financials or getting influenced by growth rates doesn't help.

4. If AR-09 is any indicator, I'd rate it as poor.

5. Many players mushrooming in this sector by the day - ultimately a high risk play.