Core Projects: Vagaries everywhere

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: Shareholders of Core Projects, a Mumbai-based IT company in the education space, were in for a shock as the share price tumbled from the Rs 240-level to close at Rs 63 on Tuesday. Around December 2007, the share price was around Rs 464.60 and Core Project was seen as one of the fastest growing IT companies in Maharashtra.

In fact, a leading business magazine featured the company as one of the few investor friendly companies. Early in the year, AV Birla Group's private equity firm, TGS Investments, took a strategic stake in the company by investing around Rs 13.73 crore. Nothing much has changed fundamentally in the company reckon analysts, as the company largely focusses on education and related businesses. Being a small company, it has been growing at around 100% levels.

In the first quarter, the company recorded a turnover of Rs 64 crore, and net earnings of around Rs 13 crore, which were 27% higher as compared to the same period previous year. Company sources maintain that this sell-off has more to do with the market conditions and not anything drastic with the company. The reason for this huge slide, according to analysts and trade experts, lies in the small- and mid-cap stocks.

“In bear markets small- and mid-cap companies face such pressures which is not new at all,” says Hasit Pandya, director, HPMG Shares and Securities. The company was cornered by operators, especially after it came in limelight, after the AV Birla interest and its FCCB issuances in May 2007. The shares started tanking on Friday, when they fell to Rs 140, after opening at Rs 229.