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 The Equity Desk Forum :Market Strategies :Fundamental
Message Icon Topic: Is Educomp a bubble? Post Reply Post New Topic
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kulman
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Quote kulman Replybullet Posted: 21/Jan/2009 at 3:39pm
Originally posted by stockaddict

Many people have what is called  'risk addiction'(as shown in basic instinct 2)Like satyam people were holding out/buying @ 160 , 45 etc  they get some pleasure out of  living on the edge. Perhaps they ignore the risk-reward equation altogether.


Good observation!
Life can only be understood backwards—but it must be lived forwards
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vijay pathi
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Quote vijay pathi Replybullet Posted: 21/Jan/2009 at 3:46pm
while educomp went to great heights and settled down at 1850 levels.
i am an educationist and am skeptical on technology led education.
the arrangement with schools for TV screen fed education is not that convincing.
its more of  a fad.

good education happens between teacher and students directly.
tech can only be a enabler.
and educomps revenue sharing arrangements with schools is shaky.

content wise, they are no great shakes.
for schools , content is limited. it is not ROCKET SCIENCE.
its simple school education ie english, basic maths, history and some science.
content wise everonn , educomp etc are equal.

good and better content is available FREE on the net.
content is now a commodity.
not a good enough differentiator.

more no of schools on educomps list looks good on paper.
with cheaper alternatives coming up.
schools will walk away from them to a competitor.
here contracts are not having sanctity.
and enforcement is lenghty and painful.

i feel biz model of BOOT with govt is also doubtful and revenue collection is
tedious, payment delays are common. realisation time is long.
change in govt create issues.
moreover, govt schools do not have enough funding.

their online direct model thru mentoraide is almost non existent.

its more hype than substance.
private schools , in the long run will not be keen to share revnue with educomp for content related association.
this content is easily copied and does not enjoy copyright s as it is generic information , formatted and delivered.
no copyright can be availed for formatting and packaging.

we all need to do re check on educomp.
valuations of 3000 plus was ridiculous.
even at 1800 , it is not reasonable.

vijji
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stockaddict
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Quote stockaddict Replybullet Posted: 21/Jan/2009 at 3:57pm
I agree,it's just a new age fad and it will go away with time. Paying skyhigh valuations would be risking  doing a  'dotcom' like investment decision. These days there are a lot of 'smart schools' opening and it is made to appear that it is the end all of good education. Being tech savy school is not the preequisite for a good education. 
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kumardiwesh
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Quote kumardiwesh Replybullet Posted: 21/Jan/2009 at 4:45pm
Originally posted by Circuit

Originally posted by kumardiwesh

It should get a hammering. Let's wait and watch.



 

Your wish comes true.... Stock down 25% todayClap


I think there's more in the offing.
These days one blow is not enough.
"History does not tell you the probability of future financial things happening" - Warren Buffett
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basant
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Quote basant Replybullet Posted: 05/Feb/2009 at 7:37pm
Thisis what Shankar Sharma'S fIRST gLOBAL  says about this "great" company:

That said, while our analysis is still half-baked and work-in-process, fact is that Educomp’s

business model is “unique”…and in fact, we have almost never come across anything like it

before. It is a curious mix of a hardware leasing business, coupled with on-site education, all of

which combine to make a business that has never ever earned a buck of cash flow ever in its entire

life, and by the looks of it, never will, if the model remains the same. The growth in EBITDA is

more than matched by growth in debtors, leading to negative cash even at the operating level, precapex.

This results in pretty hairy-looking financials that will fly very well in a bull market, but

how they fare in a bear market is quite another thing. And the trouble always is that the harsh

glare of a bear market exposes the warts in any company’s business model, specially one of cash

deficiency, and this deflates high valuations faster than a cold shower deflates…well, you know

what….

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Hitesh Shah
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Quote Hitesh Shah Replybullet Posted: 05/Feb/2009 at 8:02pm
Today, one could have bought one share of Educomp or HDFC for the same price!
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Circuit
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Quote Circuit Replybullet Posted: 05/Feb/2009 at 8:16pm
Originally posted by Hitesh Shah

Today, one could have bought one share of Educomp or HDFC for the same price!
 
Not a bad idea to wash away one's sin... switch loyalty from Prakash (Shantanu) to Deepak (Parikh) Wink
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prashantmohta
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Quote prashantmohta Replybullet Posted: 05/Feb/2009 at 8:17pm

THIS IS A REPORT BY FIRST GLOBAL (GREAT ANALYST). SHANKAR SHARMA ON MAY 07.

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