Additions & Deletions to Long term ideas

I had recommended some stocks from a long term perspective on 23rd May here I am removing Technology companies Tanla Solutions and 3i Infotech from the list and adding Educomp Solutions and Titan Industries to the list. 3i Infotech faces the risk of non-conversion of its FCCB by March’2010. Here’s a brief on both the companies:

Educomp Solutions:

Business Oppurtunities: 220mn kids,1mn schools (50k private schools)

Smart-class: <2% penetration. Present addressable market at approx.15k schools. Targetting 1700 schools by FY09.

ICT: Orderbook of Rs9.8bn to be executed over 3-5 years.

EPS should continue to grow over 80% for the next few years with ROE at 40% and ROCE at 28% for FY09.

Titan Industries:

Titan is a specialised retail play on watches, jewellery and precision engineering. The company wants to capture a share of the unorganised jewellery retailing. Jewellery is a Rs 70,000 crs opportunity. EBIDTA margin increased by 108bps in H1FY09 as operating leverage kicks in and also due to higher charges for making jewellery. Titan could end FY10 with an EPS of around Rs.80 with an ROE and ROCE of over 35% and 30% respectively.


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