Edserv sees net grow 30% in FY12, govt orders rising

Edserv sees net grow 30% in FY12, govt orders rising

Mumbai: Edserv Softsystems expects government orders worth Rs400-450 million in FY12 for vocational training services, as India increasingly focuses on setting up more institutes imparting skills training.

Indian education companies are making a big foray into the skill development or vocational training space to meet rising demand as India’s economic boom increases the need for skilled manpower.

“This year’s order pipeline is around Rs800 million. It includes private and government projects," S. Giridharan, chairman and chief executive, said in an interview.

The company, which has been accorded vocational training provider status by the government, is also planning to sign agreements with the government of Gujarat to set up 20 industrial training centres in the state.

It has earmarked Rs500-600 million as capital expenditure in the current fiscal year and is looking to raise funds via an overseas issue soon, the chairman said, declining to give details.

Edserv gets 40% of its revenues from skill upgradation and higher education services, 35% from providing educational content to schools and the rest from test preparatory and other services.

On Monday, Edserv’s Jan-March net profit jumped 86% to Rs115.2 million while revenues more-than-doubled to Rs421.5 million rupees during the same period.

In FY12, the company is looking at a 50% jump in revenues to Rs170 crore and a profit growth of 30% to about Rs550-600 million, Giridharan said.

School Biz to Boost Growth

Edserv, which currently provides content to 120 schools under the Vidyadhana Academy of Excellence, plans to add 80 more as clients in the current fiscal year.

“The agreement with IL&FS is going to help us provide additional content to schools and will be a growth driver for us," Giridharan said.

“It will help us target solutions in regional languages including Tamil, Telugu, Hindi, Marathi and Kannada," he added.

In the March quarter, EdServ signed an agreement with IL&FS Education , which will help it deliver interactive teaching and learning environment in schools through technology-based solutions.

It is also in the process of signing content sharing agreement with mobile and direct-to-home service providers.

It also plans to set up academies, called ‘Edinstitutes’in the Tier-2 and Tier-3 towns of India and provide test preparatory materials to students who do not have access to internet facilities.

“We are planning to set up 300 Edinstitutes in FY12, all of which will be set up on a franchisee model," Giridharan said.

At 12.39 pm, shares of the company were down 0.48% at Rs145.5 in a firm Mumbai stock market.