Tree House Education has declared the results of Q2 FY16

Company has reported marginal rise of 1.19% (Y-o-Y) & huge decline of 29.3% (Q-o-Q) in profit after tax at 12.74 cr. for the quarter ended September 30, 2015 as compared to the quarters ended September 30, 2014 and June 2015. Net Revenues grew by 15.05% on Y-o-Y basis and declined by 17.07% on Q-o-Q basis.

Company’s margins have shrunk massively this quarter because of massive operating expenditures rise of 35%. Company’s Gross Profit Margin is 52.66%. It has declined by 701 basis points on Y-o-Y basis and 1137 basis Q-o-Q basis. PAT margin has also slipped by 305 and 385 basis points compared to same quarter last year and previous quarter respectively.

So company may underperform for some period. One should accumulate in tranches as stock may slide from current levels too.

Latest Key Indicators of the stock are as follows:

Key Market Indicators (Standalone)
Latest Date 06-Nov-2015
Latest Price (Rs) 260.50
Previous Close (Rs) 268.20
1 Day Price Var% -2.87
1 Year Price Var% -41.32
52 Week High (Rs) 548.00
52 Week Low (Rs) 259.10
Beta 0.65
Face Value (Rs) 10.00
Industry PE 39.76
TTM Period 201506
TTM EPS(Rs) 14.85
TTM CEPS(Rs) 22.06
Price/TTM CEPS(x) 11.81
TTM PE (x) 17.54
Price/BV(x) 1.66
EV/TTM EBIDTA(x) 7.49
EV/TTM Sales(x) 4.70
Dividend Yield% 0.77
MCap/TTM Sales(x) 4.95
Latest Book Value (Rs) 156.64
Market Cap (Rs. In Crores) 1102.19
EV (Rs. In Crores) 1046.64
Latest no. of shares (In Crores) 4.23

Comparison of quarterly results with previous quarter (Q-o-Q) and the same quarter of last year (Y-o-Y) is below:

DESCRIPTION Sep-15 Sep-14 %Var Jun-15 %Var
Net Sales 57.25 49.76 15.05 69.03 -17.07
Total Expenditure 27.10 20.07 35.03 24.83 9.14
PBIDT (Excl OI) 30.15 29.69 1.55 44.20 -31.79
Other Income 3.15 0.34 826.47 3.00 5.00
Operating Profit 33.30 30.03 10.89 47.20 -29.45
Interest 4.52 4.36 3.67 3.69 22.49
Exceptional Items       -3.22  
PBDT 28.78 25.67 12.12 40.29 -28.57
Depreciation 10.04 6.34 58.36 9.65 4.04
PBT 18.74 19.33 -3.05 30.64 -38.84
Tax 6.00 6.74 -10.98 12.62 -52.46
Profit After Tax 12.74 12.59 1.19 18.02 -29.30
           
Adj. EPS 3.01 2.98 1.15 4.26 -29.34
           
Profitability Ratios     Absolute Variance   Absolute Variance
PBIDTM% (Excl OI) 52.66 59.67 -7.01 64.03 -11.37
PBIDTM% 58.17 60.35 -2.18 68.38 -10.21
PBDTM% 50.27 51.59 -1.32 58.37 -8.10
PBTM% 32.73 38.85 -6.12 44.39 -11.66
PATM% 22.25 25.30 -3.05 26.10 -3.85
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