Education sector stocks in the limelight

| | Updated on: Feb 17, 2011

Education sector stocks were up on the bourses on expectations that the Budget will focus more on education this time.

The stock that saw the largest percentage rise was Zee Learn, which gained 19.91 per cent to close Rs 25.60. Others that rose were Everonn Systems (up 17.1 per cent to close at Rs 678.7), Educomp Solutions (5.04 per cent to close at Rs 505.4), Edserv Softsystems (10.62 per cent to close at Rs 153.65), Aptech (3.74 per cent to close at Rs 109.45), Ace Edutrend (5 per cent to close at Rs 33.6) and Career Point (4.44 per cent to close at Rs. 360.9).

Analysts said that education is always an evergreen sector and rarely sees a downturn and added that there is a lot to do.

“In fact, people start enrolling for courses during a downturn,” said the head of research of an MNC brokerage. “This helps them to re-skill and update themselves with the latest and be ready for changes that occur at the workplace.”

Another research head at a large Indian brokerage said: “Take the case of equity research. Fundamentally, analysts who choose to remain in equity research are increasingly registering themselves to appear for the CFA certification offered by AIMR USA, while technical analysts opt for the certified market technician (CMT) offered by Market Technicians Association USA.”

A Cygnus report on education lists a whole host of problems related to fragmented management, government not being able to provide information on vocational training, lack of plan implementation, outdated curriculum, poor industry interface, vocational training not addressing the needs of the unorganised sector, little incentive to improve performance, poor quality of teachers and problems related to funding.

In spite of all the constraints, said experts, Indians are going all out to equip themselves with education, skill-sets and certifications that make them employable.

“While the education sector has several catalysts (low penetration of high quality education and growing demand for educated workers and others), our analysis of the key segments in which listed players operate suggest that specific challenges persist that makes sustainability of returns doubtful,” said an Ambit report.

Published on February 17, 2011

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