Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Enrollment numbers have increased, particularly in the MBA segment, due to aggressive pricing strategies.
- International business in the MarTech space has grown by 50% in the last quarter.
- The company has a healthy cash position with gross cash of about INR110 crores and minimal borrowing.
- Publishing business showed a 27% revenue growth, with online sales growing over 100%.
- The company is expanding its franchise network, aiming to reach 500 locations in the next three to five years.
Negative Points
- Q1 FY25 was a flat quarter with only a 4% revenue growth and a marginal 1% increase in EBITDA.
- Profit after tax has declined due to a shift from minimum alternate tax regime to normal taxation.
- Margins have been squeezed due to aggressive pricing strategies and heightened cost cautiousness.
- There were delays and price testing issues in the Kestone segment, impacting Q1 performance.
- The regulatory impact on physical centers has caused disruptions, particularly in the NCR region.
Q & A Highlights
Q: How many new CoCo centers have been opened during the last year?
A: We have refrained from opening any new CoCo centers. Our focus is on expanding our franchise network to achieve our goal of 500 centers over the next three to five years. (Arjun Wadhwa, CFO)
Q: How do we plan to compete with other platforms and what other IIMs, IITs are we planning on signing up with?
A: We have signed with IIM Amritsar and aim to add one or two more marquee institutions. The focus is on making enrollments successful for these institutions without over-aggressive marketing spends. (Satya Narayanan R, Founder and Chairman)
Q: Can you talk about the regulatory impact on the physical centers on Career Launcher as well as our competitors?
A: The regulatory scrutiny has increased, especially in the NCR region. We have been vigilant about safety norms, and while one of our centers in Noida was temporarily affected, we continue to comply with regulations. (Satya Narayanan R, Founder and Chairman)
Q: What growth do you expect in the CUET and Study Abroad segments, and what is the target for these segments?
A: We aim for MBA, law, and IPM segments to achieve INR100 crore targets. For CUET, we hope the exam becomes tougher to better categorize students. The Study Abroad segment is being bolstered with team strengthening efforts. (Satya Narayanan R, Founder and Chairman)
Q: Why has the borrowing power been increased to INR400 crores, and is there an acquisition likely?
A: The increase is a preemptive measure for potential inorganic growth opportunities. We are in critical stages of discussions, and this approval prepares us for any materialization of these opportunities. (Nikhil Mahajan, Executive Director)
Q: Are there any plans for a buyback this year, especially before the new taxation kicks in?
A: While we consider shareholder value, a buyback before October 1 is not feasible due to the 12-month limit from our last buyback ending in November. (Nikhil Mahajan, Executive Director)
Q: What growth rate can we expect in CUET and international mobility, and is there any guidance for FY25?
A: Both CUET and international mobility are hard focuses for growth. While we refrain from giving specific numbers, these segments should contribute significantly over the next few years. (Satya Narayanan R, Founder and Chairman)
Q: What has changed in the test prep space compared to the considerable growth in Q1 last year?
A: Last year's growth was on a high base. This year, deferment of enrollments due to elections and a conscious price-led intervention in the MBA segment affected growth. However, we remain confident in achieving our FY25 goals. (Satya Narayanan R, Founder and Chairman)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
