The share of Core Projects & Technologies Ltd. (CPTL) (Code: 512199) (Rs.184) is being acquired by overseas and local
funds in fairly large quantities in anticipation of its bright outlook. Marketmen put the share price in 4-digit in about one
year.
CPTL is an IT product and end-to-end services solution provider company catering to verticals such as Education,
Logistics, HealthCare and ERP. CPTL is a niche player within the IT education domain having products such as Core Star,
Core Bright Idea, Core Grants Manager etc. Products in other verticals include Core RFIDS, Core Mobile-VTS, Core
Hospital Managemnt, Core Prism, Core Attorney-MS etc. Enterprise Computing Services Inc. (ECS) in Atlanta, USA;
Software Technical Services Inc. (STS) in Atlanta, USA; Core Projects & Technologies Ltd. FZE in Sharjah, UAE, Weda
Infotech Pvt. Ltd, Aarman Inc.; Aarman Software Pvt. Ltd. and EMACS Technologies Inc. are its subsidiaries.
CPTL has 31 products in the education space and operates in 16 states in USA and is also present in some parts of the UK
and Africa. Its offerings in logistics include RFID and GPS/GPRS based asset tracking system (ATS). It enables automated
tracking of assets or products on a real-time basis.
In the past two years, CPTL has acquired five companies, which have contributed over 65% to its total revenue and profit
in FY07. Its strategy is to acquire companies in the US and UK as it enables it to add more products to its portfolio and
expand its geographic base.
CPTL's client list includes several US State Governments such as Georgia, North Carolina, Michigan, Illinois, Florida and
Maine. It recently got a major breakthrough by bagging an order from the Jharkhand Government of India and is
aggressively looking to add other State Governments to its client kitty. CPTL is scouting to expand its expertise across the
globe with a view to tap the potential in the European Union (EU) and Australia and to enhance the functionality of its
clients across the globe.
Recently, it tied up with IBM, a worldwide leader in IT, for using its platform to provide solutions in the government and
education space. It has entered into a pact with Center of Higher Learning (CHL), which is a collaboration between NASA
and the State of Mississippi, USA, to develop innovative technologies that would be used in the delivery of education in
USA and India.
The new delivery system will use three-dimensional technology where students can not only visualise but also interact
with the content. CPTL has also signed a MoU with the Indira Gandhi National Open University (IGNOU) for setting up
visualisation learning centres at all IGNOU centres in India.
During FY07, CPTL registered consolidated income of Rs.200 cr. and posted a net profit of Rs.33.5 cr. yielding an EPS of
Rs.4.8 on FV of Rs.2 per share. During Q2FY08, it posted 279% higher net profit of Rs.22.4 cr. on 283% increased sales of
Rs.115 cr. In H1FY07, income rose by 238% to Rs.201 cr. and net profit by 223% to Rs.34.9 cr.
Its equity capital is Rs.14.2 cr. and with reserves of Rs.105.2 cr., the book value of its share is Rs.17. The promoters hold
53.7% in the equity, Foreign holding is 8%, Institutions hold 2.5%, PCBs hold 23.3% leaving 12.1% with the investing
public.
Coming to its future prospects, countries worldwide are making huge investments in education. For instance, the US
Government spends around 5.7% of its GDP on education, which roughly translates into $706 billion. Of this, around 6-
7% is spent on IT ($46 billion). In 2006, the US spent $536 billion on public schools and this figure is increasing by 4-5%
p.a.
The second largest area of increase in federal spending is on special education, which increased from $250 million in 1977
to $5 billion in 2000 to $12 billion in 2005. Also, countries like UK, Australia and Africa, spend anywhere between 4.5% -
5% of their GDP on education. On the other hand, the Indian Government spends 3% of its GDP i.e. around $21 billion on
education, which is expected to increase to
around 5% of GDP. In the 2006-07 Budget,
the government had allocated Rs.210 billion
for Sarva Shiksha Abhiyaan (SSA) (53%
jump from previous year).
CPTL has been at the forefront of the
administrative school software. With
several large application installations
throughout the USA and UK, and with
additional opportunities emerging in India,
the company is a leader in providing school
administrators with the tools they need to
help provide quality education to students.
CPTL's focus on education vertical is
expected to change its revenue model with
education accounting for over 85% by FY10
