Aptech is aiming to become a global software solutions company. The company’s software business is growing at a scorching rate, which has led to quarter over quarter improvement in operating margins. However its education and training businesses still contribute more than 80% of its total revenues.
The global software training market is growing at a breakthrough rate. Aptech has taken various initiatives during the year to increase its share in the markets. These include:
Aptech’s online university, Onlinevarsity.com has announced its partnership with Jobstreet.com. This partnership will enable students to have access to global placement opportunities. Onlinevarsity has registered over 1.5 m page views and more than 10,000 students are undergoing its courses since the launch of the portal. Jobstreet.com already has over 10,000 registered jobseekers in India and over 80 companies across India, Asia Pacific and USA.
Recently it has announced a new venture named BconnectB.com, which is being incorporated as a subsidiary. It will set up and support multiple initiatives in B2B e-commerce on a global basis. It has launched Asia's first comprehensive ASP (Application Service Provider) portal for the manufacturing industry. The BconnectB ASP will initially be launched with web hosting partners in Mumbai, Dubai and Singapore and will be premiered in Europe and the USA during the year 2001.
The company has tied up with a Canadian educational portal skillsforyou.com for some of its sales, marketing and personality development courses.
Aptech’s tie-up with Saba, a market leader in e-Learning infrastructure is to provide a world class e-learning solutions to corporations worldwide. Saba and Aptech will provide a complete solution to their customers, which will have inter-operability among Aptech's world-class learning content and Saba's Internet based learning management system.
It has launched the Aptech Certified e-commerce Professional (ACeP) course in the field of e-commerce on the Microsoft platforms and products. It has also entered into a strategic partnership with GE Countrywide Consumer Financial Services (GE Countrywide) to offer zero percent interest computer education loans to students.
The education and training (E&T) industry is now maturing with schools, colleges and universities beginning to offer computer education. This was the lacuna in the education system, which career training institutes like Aptech, SSI and NIIT sought to fill. Also, with small institutes cropping up all over the country, the competition has been fierce and growth rates flattening to 20-25%. Aptech’s multi-branded offering of short term courses along with its strong international push will help it to maintain a reasonable growth rate in E & T business.
At the current market price of Rs 508, Aptech gets a P/E multiple of 16 times its first half 2001 annualised earnings. The stock trades at a significant discount to its peers SSI and NIIT. The key valuation driver for the company is likely to be its software services business which has shown encouraging growth. The increasing revenues from this business will also push up the operating margins of the company.
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