Prajna Capital - An Investment Guide

THE government’s thrust on the education sector and the decision to set up model schools through private-public partnership has made brokerages bullish on the sector. ICICI Securities feels that even while consumer spending is declining across sectors, education spend is unlikely to witness any fall. It also expects the Right to Education Bill to be introduced in the parliament within a few weeks. In a recent report, the domestic brokerage has reiterated a buy on NIIT and maintained a hold on Educomp Solutions. The government has significantly increased its education outlay to 5% of GDP from the current 3%. Also, it has recently announced setting up 2,500 model schools (of 6,000 schools) via public-private partnership at an estimated cost of Rs 93.2 billion. It also feels that education spend is the last item to be cut by private households in the current slowdown as it forms a mere 7-8% of the total consumption expenditure and parents want to provide the best to their kids. Interes...