MT Educare, more popularly known as Mahesh Tutorials, has seen its stock go on a roller coaster ride since January 2014, reaching its intra-day low of ₹66 on January 27 and touching its 52-week high of ₹141 on August 4. The stock has been on the ascent again since March, rising by 73% from ₹76 levels to ₹138 as on August 22. Looks like promoter Mahesh Shetty made the most of the rally by offloading 1 million shares at an average price of ₹127 on August 8, thereby reducing his stake in the company from 45.3% to 42.8%. After the stake sale, the promoter seems to have used the cash flows to release 2.3 million pledged shares from Tata Capital Financial Services, thus increasing his unpledged holding in the company from 32.4% to 38.3%.
The Street is bullish on the stock, which got listed at ₹80 in April 2012, as the company enjoys sound fundamentals; it has zero debt and reported an 18% growth in revenue and 20% growth in profits in FY14 compared with 20% and 33%, respectively, in FY13. Strong return ratios (RoE of 23% in June 2014, up from 17% in December 2013) is adding to the sheen. With 233 centres and their acquisition of Lakshya, an IIT-JEE coaching class, the promoter seems eager to go pan-India.