ICICI Securities puts 'buy' on Educomp

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ICICI Securities has recommended a buy rating on Educomp, citing the increasing education spend by the government. “In the current economic slowdown, we believe that education spend will be the least affected given the increasing importance to education by the government and the private sector. Education spend is the last item to be cut by private households in the current slowdown as it forms a mere 7-8% of the total consumption expenditure,” the brokerage said in a not to its clients.

“US-based education companies have considerably outperformed the domestic education-focussed companies in the past one year. We expect the valuation-gap to narrow down and expect Indian education companies to catch up soon,” it added.