The stock of Chennai-based Edserv Softsystems has gained momentum after the company bagged a government contract last week. The stock shot up by 10.2% in just two trading sessions and closed at INR 175 on the BSE last Friday. Edserv, which provides vocational training and placement services, said that it has become an associate training partner of Apex Hitech Institute of the Ministry of Labour and Employment. With this, Edserv can now provide demand-driven short-term training courses to unemployed persons under the Modular Employable Skills Scheme (MESS) of the central government. The scheme involves more than 200 shortterm courses encompassing minimum skills required to gain employment. The programme offers certification, which is nationally and internationally recognized.
Under this scheme, Edserv would receive Rs 15 per hour of training given to candidates who successfully complete a particular module. The training duration varies from less than 90 hours to more than 270 hours. The company plans to offer training to three lakh candidates in the first 18 months by setting up a franchise network of training institutes across Tamil Nadu, Andhra Pradesh, Maharashtra, Kerala, and Gujarat. This would take the number of its centres from 250 to 1,000. The company expects to earn over INR 100 crore through this scheme at an operational margin of 40% in the next 18 months. Going by the management's claim, this arrangement alone can catapult its net profit from INR 3.5 crore in FY09 to over INR 27 crore by FY11. The company is also planning to take a loan of INR 20 crore to run 50 private schools in Tamil Nadu and Andhra Pradesh. It expects to use this experience of running schools to bid for government contracts as a part of public-private partnership initiative under various educational programmes.