CAREERPOINT INFOSYSTEM
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3249
Printed Date: 21/Apr/2025 at 1:37am
Topic: CAREERPOINT INFOSYSTEM
Posted By: hit2710
Subject: CAREERPOINT INFOSYSTEM
Date Posted: 26/Apr/2011 at 11:16pm
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CAREERPOINT INFOSYSTEMS
CMP 340 MARKET CAP 613 CRORES
COMPANY HAD COME OUT WITH AN IPO PRICED AT RS 310 PER SHARE BACK IN SEP 2010. AFTER THE EUPHORIA DURING THE LISTING PHASE, WHEN THE STOCK HIT A HIGH OF 711 THE STOCK HAS BEEN CORRECTING TO POST A LOW OF 281 IN FEB 2011.
THE COMPANY HAD 14 OWN AND 18 FRANCHISEE TRAINING CENTRES AS AT SEP 2010.
BUSINESS
THE COMPANY IS INTO THE EDUCATION AND TUTORIAL SPACE PROVIDING COACHING SOLUTIONS FOR HIGH SCHOOL AND POST HIGH SCHOOL COMPETITIVE EXAMS LIKE AIEEE, AIPMT, IIT-JEE AND PRE DENTAL TEST.
GROWTH TRIGGERS:
THE COMPANY PLANS TO CONSTRUCT AND DEVELOP AN INTEGRATED CAMPUS FACILITY IN KOTA.
IT ALSO AIMS TO ENTER THE ECAMS – EDUCATIONAL CONSULTANCY AND MANAGEMENT SERVICES FOR K-12 AND HIGHER EDUCATION STUDIES.
INCREASING THE GEOGRAPHICAL REACH OF THE COMPANY.
NEW COURSE OFFERINGS BY UTILISING IN HOUSE EXPERTISE.
FINANCIALS
PROMOTER HOLDING IS AROUND 60%. BOOK VALUE 140, EQUITY IS 18.13 CRORE WITH EACH SHARE WITH A FACE VALUE OF RS 10.
LAST FEW YEARS RESULTS SHOWS CONSISTENT GROWTH ALBEIT ON A LOW BASE.
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YEAR |
07 |
08 |
09 |
10 |
9M FY 11 |
9MFY10 |
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SALES |
30 |
38 |
45 |
61 |
59 |
45 |
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EBIDTA |
17 |
20 |
21 |
23 |
22 |
17 |
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NP |
12 |
15.3 |
15 |
20 |
19.72 |
14.6 |
FOR FY 11, THE COMPANY CAN POST NET PROFIT OF AROUND 25 CRORES (OR MORE) AND BASED ON CURRENT MARKET CAP IS VALUED AT AROUND 25 TIMES FY 11 EARNINGS.
NOW IT NEEDS TO BE SEEN HOW THE COMPANY MANAGES TO GROW ITS REVENUES AND WHAT KIND OF MARGINS IT MAINTAINS.
CONCERNS:
OVERDEPENDENCE DUE TO HIGH CONTRIBUTION FROM KOTA CENTRE WHICH CONTRIBUTES AROUND 60% OF REVENUES.
HIGHLY COMPETITIVE AND FRAGMENTED INDUSTRY WITH NEGLIGIBLE ENTRY BARRIERS
GOVT INTERFERENCE BY POLICY CHANGES MAY HAMPER THE GROWTH PROSPECTS OF THE SECTOR AS A WHOLE
TO CONCLUDE, THE STOCK CAN BE A GOOD CONCEPT STOCK IF IT MAINTAINS ITS GROWTH MOMENTUM GOING FORWARD. ENTRY INTO THE STOCK AT RIGHT KIND OF VALUATIONS COULD GIVE GOOD RETURNS.
VIEWS INVITED.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Replies:
Posted By: srisaurabh2000
Date Posted: 26/Apr/2011 at 12:10pm
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I think they are also planning a couple of universities in HP and Rajasthan, there might be some capex involved there.
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Posted By: TCSer
Date Posted: 26/Apr/2011 at 12:17pm
HDFC MF the best performing MF bought few lacs shares on listing day around 550 n is still invested in the co
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Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays
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Posted By: subu76
Date Posted: 26/Apr/2011 at 1:13am
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Just anecdotal data: The person who used to teach me for enginnering exams (an extremely smart teacher and a wizard in maths and physics ) would charge about Rs 2000 and i'm pretty sure he had more than 1000 students. So one person was making 2.4 cr and this was many years back. Career point makes 68 Cr after having 24,000 students on it's rolls.
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Posted By: srisaurabh2000
Date Posted: 26/Apr/2011 at 2:05am
Originally posted by subu76
Just anecdotal data: Career point makes 68 Cr after having 24,000 students on it's rolls.
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What is the media of instruction to these students?Is it online or face to face? Else hiring teachers can be a big challenge.
DMC education is trying to setup online medium of instruction. FIIT JEE etc. are tying up with schools like DPS etc. to impart which will not need students to go for separate tution. So the future growth in tution might come from a different concept than current ones.
Kota has been big in JEE training but what would be the impact if that changes?
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Posted By: Ravenrage
Date Posted: 26/Apr/2011 at 3:02am
Originally posted by hit2710
CONCERNS:
OVERDEPENDENCE DUE TO HIGH CONTRIBUTION FROM KOTA CENTRE WHICH CONTRIBUTES AROUND 60% OF REVENUES.
HIGHLY COMPETITIVE AND FRAGMENTED INDUSTRY WITH NEGLIGIBLE ENTRY BARRIERS
GOVT INTERFERENCE BY POLICY CHANGES MAY HAMPER THE GROWTH PROSPECTS OF THE SECTOR AS A WHOLE
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Career Point name is the brand that they have created over time and will fuel students to that. The number of institutes with All India presence are handful : FIITJEE for Engineering entrance exams . For PMT students , Brilliant Institute , Aakash are good .
Its true that the industry is fragmented , but the demographics of India will continue it to post good results .
Govt. policies will change , but at the end of the day , if you aren't solving the toughest sums , you are not getting the edge over others . Hence coaching schools will continue to benefit as students seek alpha from these institutes.
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Posted By: hit2710
Date Posted: 26/Apr/2011 at 7:31am
I think the smaller cities in India offer good growth prospects for such tutorial companies.
The aspirations of people in such cities for going for competitive exams with the help of well known players combined with higher income levels will lead to higher enrollments for these courses.
Regarding HDFC entering the stock at 550 plus levels, I think they were caught up in the post listing frenzy.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Posted By: UnderDogg
Date Posted: 26/Apr/2011 at 10:21am
Hit Sir,
From where did u derive the book value of 140.
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Never give up, miracles do happen.
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Posted By: hit2710
Date Posted: 26/Apr/2011 at 10:28am
Originally posted by UnderDogg
Hit Sir,
From where did u derive the book value of 140. |
http://www.monarchproject.com/Content/Research.aspx
go to this website and search details for careerpoint. they give all details on same page like market cap, book value, div yield etc.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Posted By: prabhakarkudva
Date Posted: 26/Apr/2011 at 11:27am
Some thoughts:
1. Any idea what their market share is?
2. Competitive Ability - In Kota Bansal Classes is the leader and everyone tries to get in there first.So i don't know if these guys have a big moat that'll prevent someone else from taking away market share.They are definitely not leaders.
3. Management and Strategy - Unknown to a large extent
4. Doesnt look like a very capex intensive business since asset turnover ratios are quite high.
I think FY11 Balance sheet and PL statement should give more clarity.
4.
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Take your chances and keep them in a box until a quieter time.
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Posted By: commnman
Date Posted: 27/Apr/2011 at 12:06pm
Interesting...
IIT-JEE tutorials' hub Kota losing its winning ways
KOTA: Standing outside the three-storey hostel for students he runs in Kota, 250 km south of Rajasthan’s capital Jaipur, Rakesh Jain looked up to the skies worrying about the future.
Until a few months ago, all his troubles seemed far away, in this hub of institutes that train students for entrance exams to some of the most reputed academic institutions in the country, especially IITs.
And there was no reason to lose sleep because since the mid-90s, things only got better for providers of tutorial services or related businesses such as Jain. Till this year, that is.
In the past few years, nearly 30% of those selected to IITs were from Kota institutes. In 2008, six of the top 10 ranks in IIT-JEE were from institutes from Kota; last year the figure fell to three, and this year, to zilch. Jain knows it: he has to batten down the hatches because there is a massive slide in students coming to Kota.
Why? What’s happening?
But before that, how did Kota become home to the country’s largest cluster of tutorial service providers? The year was 1996, and a large chemical factory of JK Synthetic in Kota closed down. Many engineers lost their jobs and left town. Several of them, however, decided to stay on, and to make both ends meet enterprising ones such as Dr VK Bansal began to offer private tuition to IIT aspirants for a fee.
Very soon, more engineers entered the fray and the rate of students getting selected to IITs from Kota institutes rose. To sustain the momentum, they updated their course material, revised methodology, roped in experts and soon, the entrance exams coaching business in Kota became an organised industry. According to rough estimates, this industry, including related businesses, generated revenues of Rs 600 crore last year.
The tale of Kota is that of a boom in less than a decade, attracting even the attention of private equity funds.
Earlier this year, Milestone Religare Investment Advisors, a joint venture between Milestone Capital and Religare Enterprises, invested Rs 60 crore in Resonance, a Kota-based tutorial institute.
Its competitor Career Point went a step ahead. After raising Rs 50 crore through a private equity investment by Franklin Templeton Mutual Fund in July 2009, it went public, raising Rs 115 crore.
But the overwhelming investor response to Career Point’s IPO doesn’t mirror, in any way, the mood on the ground in Kota, headquarters of the institute and home to as many as 25 other major tutorial services centres.
Dream run no more
Last year, there were 1.25 lakh “out-station” students in Kota — that is the total number of students who came from elsewhere and joined coaching classes and schools here.
This year, there was a dip. Until this year, for a few years now, on an average, as high as 30,000 new students landed yearly in Kota, say industry insiders. This year, only around 8,000 new students arrived, resulting in a huge decline in the total number of students, which has, in the process, also hurt allied services such as boarding and catering.
It is not just the recent decline in number of students who cracked the entrance exams to IITs or medical colleges that is to blame for Kota’s fall from grace, say tutorial service providers. Most of them also attribute the phenomenon to the steep rise in the cost of living here.
A student now has to pay Rs 3,000 a month for a non-air-cooled single-room in areas close to tutorial institutes. The rates have doubled from a few years ago, say people close to the matter. For air-cooled rooms, they pay Rs 7,000 now, compared with Rs 3,000 a few years earlier.
“The cost index has gone beyond the affordability limits of most parents. On an average, the living cost of a student in Kota comes out to be Rs 2.5-3 lakh per annum which includes Rs 70,000 for IIT coaching, Rs 35,000 for school tuition fees, Rs 1.2 lakh for boarding and lodging and Rs 50,000 on miscellaneous expenses,” says Pramod Bansal, chief executive of Bansal Classes.
Students typically join these training institutes in May for a two-year schooling and entrance exams training course. Such centres also offer crash courses in the run-up to entrance exams held in May-June. Counting the Cost.
Kishore Khandelwal, who rents out one of his houses to students, says costs have risen due to the entry of ‘big’ players — the builders — in the hostel business.
“They bought land at exorbitant prices near these institutes, constructed hostels with modern facilities. Now they are left with no other option but to ask for high rentals so that they reach the break-even point quickly. This probably has turned off aspirants who can’t afford to stay in the vicinity of institutes,” says he.
Surendra Soni, who runs a hostel in Kota, says the mad rush for the big buck started only in 2007, following the Centre implementing the Sixth Pay Commission’s recommendations. “I have been in this business for seven years. The room rent had been consistent at Rs 800-1500 a month per head.
But with the Sixth Pay Commission’s recommendations coming into force and salaries jacking up in the private sector, parents started demanding air-conditioned comfort for their wards,” he notes.
Now, stung by this cost-bug, institutes are chasing budget locations for their students. “We are trying to forge tie-ups with hostels for providing boarding facilities for our students at reasonable rates. If we succeed in bringing down the cost, they will all be back,” says Manoj Sharma, vice-president (operations and business) at Resonance, adding that the tutorial services business in Kota has taken a hit also because teachers trained here have set up coaching centres elsewhere.
Study locally, cut expenses
All this means parents are increasingly looking at ways to stay closer home, away from Kota, and still avail of study material from its institutes to cut costs.
“Parents are forced to get their children admitted to coaching institutes in their respective cities and subscribe to test papers of any Kota-based institute for practice,” says Mr Bansal. Students can place orders for study material online from any of the major institutes in Kota.
On their part, people in Kota’s catering business complain of “stunted business” in recent months. Says Ankit Mathur, a catering centre owner at Dadabari, Kota: “The entire economy is based on the coaching industry here. Almost every house has become a hostel and every kitchen a tiffin centre to service out-station students. This year is bad for us, as there is a drastic fall in outstation students. If this becomes a trend, it is very bad for us.”
Magic on the wane?
Pramod Maheshwari, director of Career Point, argues that “one year alone can’t decide the fate of Kota”. This year, unlike previous ones, the best Kota-trained IIT aspirant could secure only the 13th rank in the Joint Entrance Exam.
“The magic will vanish only if we continue to have similar results year after year. After all, it took more than a decade to establish Kota as the Mecca of IIT-JEE coaching,” he contends. The Rs 600-crore industry in Kota has, in the past few years, seen 20-25% year-on-year growth until it slowed to 5% this year.
Another issue that plagues the tutorial services industry in Kota — the district that has in a brief period become synonymous with the national tutorial services industry itself — is peer pressure, leading to rise in suicide rates among students.
This is one reason why many parents refuse to send their children to this highly intense battleground of the IIT-Joint Entrance Examination. “We can’t take a chance with our son,” says Suresh Siddha, a parent in Jaipur. Career Point’s Mr Maheshwari, however, blames the parents. “They are well aware of the potential of their wards.
Even then, under the influence of their neighbours and relatives, they force their children for IIT and medical preparation,” says he. Maybe he is right. But you could see on Mr Maheswari’s face what you saw on Rakesh Jain’s: worry.
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Source:
http://m.economictimes.com/PDAET/articleshow/msid-6938839,curpg-1.cms
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main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon
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Posted By: hit2710
Date Posted: 27/Apr/2011 at 2:03pm
Thanks commnman for the good article. Seems that these tutorial companies will have to reach out to students in their home towns by establishing centres nearer to the students. From the looks of it Kota might be losing its charm for students.
I think one needs to monitor developments for a couple of more quarters before taking a call on CareerPoint.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Posted By: rinkumalpani
Date Posted: 27/Apr/2011 at 3:05pm
Originally posted by hit2710
Thanks commnman for the good article. Seems that these tutorial companies will have to reach out to students in their home towns by establishing centres nearer to the students. From the looks of it Kota might be losing its charm for students.
I think one needs to monitor developments for a couple of more quarters before taking a call on CareerPoint. |
delete
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Posted By: UnderDogg
Date Posted: 28/Apr/2011 at 6:29pm
Originally posted by hit2710
Originally posted by UnderDogg
Hit Sir,
From where did u derive the book value of 140. |
http://www.monarchproject.com/Content/Research.aspx
go to this website and search details for careerpoint. they give all details on same page like market cap, book value, div yield etc. |
Sir,
The B.V. in P&L Statement shows 95.40. here is the link:
http://www.monarchproject.com/CorporateInfo/Profit-and-Loss/38565/38565, even on other websites its 95.40.
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Never give up, miracles do happen.
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Posted By: hit2710
Date Posted: 28/Apr/2011 at 6:48pm
Originally posted by UnderDogg
The B.V. in P&L Statement shows 95.40. here is the link:
http://www.monarchproject.com/CorporateInfo/Profit-and-Loss/38565/38565, even on other websites its 95.40. |
Here is what the title says
Career Point Infosystems Ltd
BSE Code : 533260 NSE Symbol : CPIL P/E : 31.17622
ISIN Demat : INE521J01018 Div & Yield % : 0 EPS : 10.84
Book Value: 139.36 Market Cap(Rs Cr) : 612.6127 Face Value: 10
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Posted By: hit2710
Date Posted: 28/Apr/2011 at 6:56pm
Originally posted by hit2710
Originally posted by UnderDogg
The B.V. in P&L Statement shows 95.40. here is the link:
http://www.monarchproject.com/CorporateInfo/Profit-and-Loss/38565/38565, even on other websites its 95.40. |
Here is what the title says (on opening the link you provided)
Career Point Infosystems Ltd
BSE Code : 533260 NSE Symbol : CPIL P/E : 31.17622
ISIN Demat : INE521J01018 Div & Yield % : 0 EPS : 10.84
Book Value: 139.36 Market Cap(Rs Cr) : 612.6127 Face Value: 10 |
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Posted By: UnderDogg
Date Posted: 28/Apr/2011 at 8:00pm
But why does it differ so around 45%.
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Never give up, miracles do happen.
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Posted By: Ravenrage
Date Posted: 28/Apr/2011 at 10:24pm
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Bansal Classes used to be the first choice for students when I was preparing for JEE . But , as I saw , they produced bots , bots who lost their lives. Good to see the trend slowing down a little .
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Posted By: subu76
Date Posted: 07/Nov/2011 at 8:32am
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Anyone tracking this company? At a superficial level my understanding is that entrace exam training is easy cash business as long as you have a good reputation but setting up colleges etc is more timetaking. Also, they seem to have a relatively complex holding structure
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Posted By: shontou
Date Posted: 17/Nov/2011 at 2:33pm
Conference Call
Career Points
Avg. realization per student has increased by 13%
Career held a conference call to discuss the result ending September quarter 2011. The top management of the company addressed the meet:
Highlights
The net sales decreased by 19% to Rs 20.79 crore while net profit was down by 46% to Rs 6.04 crore. The result was impacted a due to close down of 7 centers out of which 5 centre were in Delhi. The total capacity of these centres were around 1000 students.
Avg. realization per student has increased by 13%.
The company has received fee of around Rs 39 crore from students which will be accounted in Q3 and Q4.
In tutorial business, it had enrolled 27000 students during April to September period and 2000 more is expected to join in remaining part of the year.
Enrollment for Kota centre last year was 16000 and this year is 15200.
The fall is due to increasing competition.
Residential Campus at Kota is coming-up to provide residential facilities to students who come to Kota for taking its coaching services. The construction work is in progress and expecting to finish phase one by April 2012.
The capex for its around Rs 64 crore.
The company has launched technology driven learning solution with Brand name "CPLive". Under this it provides tutorial services in live-interactive classes over internet.
The company is expanding its reach though franchisee route. 50 centres are expected by Q1 FY13. The fee will be around Rs 35000 per student and company will charge 25% of it.
The company is currently providing Education Consultancy & Management Services to the following institutions – Upcoming Private University at Kota and Hamirpur, Upcoming Technical Campus at Rajsamand and Mohali, K-12 School at Kota and Upcoming K-12 school at Jodhpur
The companyis also providing Infrastructure support to the following institutions through its wholly owned subsidiary : Upcoming University at Kota (final approval by end of Q3 and session will start in 2012) & Hamirpur (session will start in 2012), Upcoming Technical Campus at Rajsamand (infrastructure is ready and will start in July 2012) and Upcoming K-12 School and Jodhpur ( will start by April 2012).
The company's K-12 residential school will come up in April 2013. The capex for it is around Rs 15 crore and construction will start in next 3 months.
Mohali technical campus has started its operation in Sept. 2011.
The company's networth is Rs 284 crore.
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Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday?
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Posted By: subu76
Date Posted: 13/May/2012 at 9:49pm
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Wonder why the stock has fallen so much. Looking at the above post by shontou (thanks a lot) it seems this is more than just tution business which is the general perception about this compamy. They seem to require a fair amount of capex as well
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Posted By: basant
Date Posted: 13/May/2012 at 10:07pm
Subu which city (locality)/year was this in?
Originally posted by subu76
Just anecdotal data:The person who used to teach me for enginnering exams (an extremely smart teacher and a wizard in maths and physics ) would charge about Rs 2000 and i'm pretty sure he had more than 1000 students. So one person was making 2.4 cr and this was many years back.Career point makes 68 Cr after having 24,000 students on it's rolls.
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Posted By: FutureBull
Date Posted: 13/May/2012 at 11:04pm
This tution business is similar to hospital business in one way. If the main tutor of the centre is gone, you start seeing exodus of students like hospitals lose patients when their popular docs defect.
One thing is sure this should be very scalable business with franchisees running the show. The game is to remain ahead of the competition in terms of content and delivery . These corporate players face very high competition from local small players.
Originally posted by subu76
Wonder why the stock has fallen so much. Looking at the above post by shontou (thanks a lot) it seems this is more than just tution business which is the general perception about this compamy. They seem to require a fair amount of capex as well |
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‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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Posted By: subu76
Date Posted: 13/May/2012 at 11:30pm
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That's true...but they seem to be doing many other things at this point as if the potential of entrace exam training has been fully utilized.
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Posted By: basant
Date Posted: 13/May/2012 at 6:40am
Futurebull: That is true and probably the reason why service business fails when it comes to scaling up without a standardized format of delivery unlike a product business where there is a standard that has to be adhered to.
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'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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