KOKUYO CAMLIN LIMITED/BUY/SELL/MULTIBAGGER/OUTPERFORMER/OUTLOOK _ Be and Make

Strong growth in education sector to boost demand for stationery

The education and literacy drive of Government of India and the increase in per-capita GDP are creating platform for growth in the stationery business. The education and literacy drive of Government of India and the increase in per-capita GDP are creating platform for growth in the stationery business. India’s student enrolment in the higher education front has grown 12-fold in four decades while gross enrolment ratio reached nearly 18% in 2011-12. Besides, India ranks second in the world in terms of student enrolment in higher education institutions. The Government set an enrolment target of 35.9 million students by the end of its current Five Year Plan period. As per the target of the Twelfth Five Year Plan, higher education institutions under the Central Government are expected to show the highest annual growth of 14.9% in student enrolment compared to private institutions (7.6%), state institutions (5.6%) and open cum distance learning (4.4%).

Be and Make’s View:

In my view, the sector has huge potential and company is well poised to cater the huge opportunity.  Promoters hugely increased their stake tells how confidence they are about the future. Camlin joined their hands with Kokuyo is big game changger and the stationery pioneer will take the camlin to new highs in india. Company has subsidiary Alphakids running preschools as incurred some loss in the past FY but the management is very confident to make it profitable. New capex plans which are going to complete in next one to two years will definetly improve the product line. Good dividend paying history, good management and tie-up with kokuyo making kokuyo camlin a decent buy at the CMP.

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