As an Indian stock market newcomer, you might be looking for a good investment opportunity that can help you earn decent returns. In this blog post, we will analyze the stock of CL Educate. This is a leading educational services provider in India, to help you determine if it is a good investment option for you.
Who is CL Educate?
CL Educate (also known as Career Launcher) is a leading educational services provider for children in India. They offer test preparation services for MBA, law, engineering, medical, and civil services exams. They also provide vocational training, skill development, and K-12 education services. Founded in 1995 by Satya Narayanan R and based in New Delhi, the company operates through two business segments: Education and K-12 schools. CL Educate has a market capitalization of ₹ 296 Cr. and a last traded price of ₹ 53.9.
Company Profile of CL Educate:
CL Educate is a well-established brand in the Indian education sector. They have a presence in over 100 cities and towns in India, as well as in Dubai and Abu Dhabi. The company has a diversified revenue stream, with test preparation services accounting for the majority of its revenue, followed by K-12 schools and vocational training. CL Educate has partnerships with over 150 colleges and universities in India and abroad. This provides students with access to career counseling, admissions consulting, and job placement services. The company has also launched several digital platforms to deliver online learning and skill development programs. Some of them are GK EduEdge, Smart Test Prep, and myBskool.
What is the old name of CL Educate?
CL Educate was previously known as Career Launcher, which was its original brand name.
CL Educate Stock Analysis:
Now let’s dive into the stock analysis of CL Educate, starting with the fundamental details of the company. As of April 12, 2023, the stock has a P/E ratio of 13.0, which indicates that the stock is currently undervalued relative to its earnings. The book value per share is ₹ 48.5, which suggests that the stock is trading at a slight premium to its book value. The ROCE (Return on Capital Employed) is 6.4%, which is lower than the industry average. This indicates that the company is not utilizing its capital effectively. The ROE (Return on Equity) is 4.7%, which is lower than the industry average. This indicates that the company is not generating sufficient profits from its shareholders’ investments. The debt-to-equity ratio of CL Educate is 0.06. A low ratio suggests that the company is in a good financial position and has low debt levels.
In terms of the technical analysis of CL Educate, the Relative Strength Index (RSI) is currently at 50.054, which is a neutral signal. The STOCH (Stochastic Oscillator) is at 43.346, which indicates a sell signal. The STOCHRSI (Stochastic Relative Strength Index) is at 100.000, which indicates an overbought signal. The Williams %R is at -37.851, which indicates a buy signal. The CCI (Commodity Channel Index) is at 89.7324, which indicates a buy signal. The ROC (Rate of Change) is at 0.993, which indicates a buy signal. The Ultimate Oscillator is at 36.214, which indicates a sell signal. The MACD (Moving Average Convergence Divergence) is at -1.120, which indicates a sell signal. The ADX (Average Directional Index) is at 31.687 which is in the buy zone.
Based on the technical analysis, there seem to be mixed signals for CL Educate’s stock. The RSI suggests a neutral signal, while the STOCH indicates a sell signal. The STOCHRSI signals an overbought signal, and the Williams %R indicates a buy signal. The CCI and ROC suggest a buy signal, while the Ultimate Oscillator indicates a sell signal, and the MACD indicates a sell signal as well. The ADX shows that the trend is strong and suggests a sell signal. Overall, there seem to be mixed signals in the technical analysis. You require a more in-depth analysis before making any investment decisions.
CL Educate’s Financial Performance:
To evaluate the financial performance of CL Educate, we need to analyze the company’s income statement, balance sheet, and cash flow statement.
The income statement shows the revenue generated by the company, the expenses incurred, and the resulting profit or loss. In the fiscal year 2021, CL Educate reported revenue of ₹ 263.2 Cr., a decrease of 29.3% from the previous year. The company’s net profit for the year was ₹ 6.8 Cr., a decrease of 90.5% from the previous year.
The balance sheet shows the company’s assets, liabilities, and equity. As of March 31, 2021, CL Educate’s total assets were ₹ 319.3 Cr., and the company had a total liability of ₹ 101.8 Cr. The shareholder’s equity was ₹ 217.5 Cr.
The cash flow statement shows the company’s cash inflows and outflows. In the fiscal year 2021, CL Educate generated ₹ 13.7 Cr. in cash from operating activities, spent ₹ 6.8 Cr. in cash on investing activities, and generated ₹ 6.8 Cr. in cash from financing activities.
Overall, CL Educate’s financial performance seems to have been affected by the COVID-19 pandemic, with a decrease in revenue and net profit. However, the company has a strong balance sheet with low debt levels, which is a positive sign.
CL Educate’s Industry and Competitors:
To evaluate CL Educate’s position in the industry, we need to analyze the education sector in India and its competitors.
We expect the education sector in India to reach a market size of US$ 180 billion by 2025, driven by the growing demand for quality education and increasing government initiatives to promote education. The sector comprises various segments, including K-12 education, higher education, vocational training, test preparation, and online education.
CL Educate’s competitors in the education sector include companies like Byju’s, Aakash Educational Services, Resonance, FIITJEE, and TIME. Byju’s is one of the biggest competitors of CL Educate, with a market valuation of over US$ 16 billion.
Considering CL Educate’s financial performance, industry trends, and competitors, the stock seems to be an undervalued investment opportunity with good growth potential. The company has a well-established brand in the education sector. They also have a diversified revenue stream, and a strong balance sheet with low debt levels. We expect the education sector in India to grow, providing opportunities for CL Educate to expand its business. However, as with any investment, there are risks involved, and investors should do their due diligence before making any investment decisions.
In conclusion, CL Educate is a leading educational services provider in India with a strong brand presence and diversified revenue stream. The company has a strong balance sheet with low debt levels. They are also positioned to take advantage of the expected growth in the education sector. However, investors should carefully evaluate the risks involved before making any investment decisions. This is due to the company’s financial performance has been affected by the COVID-19 pandemic. Additionally, the education sector in India is highly competitive, and CL Educate faces significant competition from established players like Byju’s. Therefore, investors should conduct a detailed analysis of the company’s financials, industry trends, and competitive landscape before making any investment decisions. Overall, while CL Educate seems to be an undervalued investment opportunity, investors should approach the stock with caution and do their due diligence before investing.