Business Daily from THE HINDU group of publications
Thursday, May 14, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Thursday, May 14, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Markets
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Stocks Corporate - New Business
BL Research Bureau Educomp Solutions’ Rs 83.8-crore worth of order win from Gujarat Government strengthens the order book of its ICT (information communication and technology) division.In the fourth quarter of FY09, the company had wins from Assam and UP governments for computerising Government schools and enabling computer-driven learning. The combined value of those deals was around Rs 120 crore. Along with this deal, the order book for this segment would go up to over Rs 200 crore, which is over 40 per cent of Educomp’s standalone FY09 revenues. ICT is a relatively low-margin business for Educomp, and generates EBIT margins of around 20 per cent compared to the 50 per cent plus margins that its chief revenue contributing division – Smart Class(63.2 percent of revenues in FY09) – derives. This is due to the hardware-intensive and volumes-driven nature of the ICT business. NIITInterestingly, a few days ago NIIT had also won a deal from Gujarat Government for enabling computer-aided learning in Government schools (high and higher secondary) valued at Rs 84.3 crore over five years. This means that deals are being split across multiple vendors by the State Government. This trend, if sustained, means that pricing could come under pressure for players in the sector. But with successive Governments looking to increase budgetary spending on school education and computer-aided learning and teaching, companies such as Educomp and NIIT may be relatively immune to a domestic slowdown. More Stories on : Stocks | Education | New Business | IT Training
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