Everonn falls again 20% and touches new low.

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Everonn touches lower circuit again
Everonn Education: Quotes, News
BSE 18.70BSE Quote0.35 (1.87%)
NSE 18.70NSE Quote0.35 (1.87%)
The education sector company fell again for the second consecutive trading session by 20% and touched the lower circuit again.

The company's chairman, Jamshed Irani had resigned from the company after P Kishore, Managing Director of Everonn Education, was arrested on Tuesday, August 30, 2011 on charges of bribery.

On August 4, Tax Sleuths had conducted a search on the premises educational firm. The search revealed that the managing director had concealed taxable income of Rs 116 crore.

According to media reports after revelation, the managing director had approached a tax official through an accountant seeking request to help reduce the income tax liability.

After the news of the Managing Director's arrest, Everonn had hit its lower circuit on Friday at Rs 352. And then it fell again and hit its second lower circuit.

VIEW: This does signify corporate governance issues with the company. And hence, long-term investors should not buy the stock.

Meanwhile, short-term investors and arbitrage investors, along with momentum investors will find ample opportunities to enter the stock and book profits on different price points.

The stocks' current book value per share is Rs 276 per share and it has a debt equity ratio of 0.4 times. Therefore, if the stock fall to Rs 200-220 range then it will be a bargain chip and must be bought into.

GoodReturns.in DISCLAIMER: GoodReturns provides you with information covering shares, futures and options based on broker's reports as stated on various media. Investors are, however, warned that they should NOT take any buy or sell decision based on these views expressed in the article. Investors should consult their own financial and share advisors before taking purchase or sale decisions. GoodReturns does not take any responsibility for any losses incurred by investors who take their cues from the above article.

Read more about: tax, scam, sensex, nifty, nse, bse, everonn education
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