Arihant Academy Ltd Management Discussions

Global Economic Review¹

The global economy continued to move forward in CY 2024, registering a growth rate of 3.3%, despite facing several headwinds such as geopolitical tensions, supply chain disruptions, new trade policies and elevated borrowing costs. This growth was driven by steady consumer spending, easing of inflation in developed countries and strong economic momentum in emerging markets. A key highlight of the year was the recovery seen in many emerging and developing economies, which grew at a steady pace of 4.3%, driven by resilient domestic demand and improving manufacturing activity. Meanwhile, advanced economies recorded a modest growth of 1.8%, due to a combination of factors like diminishing post-pandemic stimulus, ongoing challenges in the real estate sector and a slowdown in consumer spending.

Inflation, which had been a global concern in recent years showed signs of easing. The global headline inflation rate came down from 6.7% in CY 2023 to 5.8% in CY 2024. This decline was largely due to stabilising energy prices, improved global supply chains and tighter monetary policies by central banks.

As inflation receded, many countries began reducing interest rates to encourage investments and ease financial conditions.

Outlook

The global economic outlook for upcoming year remains cautiously optimistic. The IMF expects global GDP growth to hold steady at 2.8% for CY 2025 and 3.0% for CY 2026. This growth will be supported by recovery in advanced economies and healthy consumer demand. Inflation is projected to decline further to 4.3% in CY 2025 and 3.6% in CY 2026, creating more room for central banks to ease monetary policies. Stable oil prices and easing food inflation are creating a more favourable environment for business activity and international trade.

However, businesses worldwide are expected to remain cautious, as trade tensions, financial market volatility and geopolitical developments continue to pose as potential threats. Going forward, countries that prioritise innovation, implement strong policy frameworks and promote regional partnerships, will be better equipped to navigate uncertainties and tap into new opportunities.

Indian Economic Review

India stood out once again as one of the fastest-growing major economies in the world in FY 2024-25, with GDP growth estimated at 6.5%.² This growth was powered by strong domestic demand, increasing infrastructure investment and a robust services sector. A good monsoon helped improve rural consumption, while urban demand remained steady throughout the year.

Inflation continued its downward trend, decreasing from 5.4% in FY 2023-24 to an encouraging 4.6% in FY 2024-25, creating a more stable economic environment.³ This was made possible by relatively stable food prices and proactive steps taken by the Reserve Bank of India (RBI), including a reduction in the repo rate to 6%. The cut in interest rates helped boost liquidity and reduce borrowing costs for both consumers and businesses.

The governments focus on capital expenditure remained strong, with 11.2 lakh crore allocated in the Union Budget 2025-26 for infrastructure development, which is expected to provide long-term support to Indias growth momentum. Also, the reduction in unemployment rate to 3.2% in FY 2023-24 from 6% in FY 2017-18 potentially supported the growth of the nation. This decrease in unemployment rate can be attributed to the several initiatives undertaken by the Government of India that played a pivotal role in providing skill training, fostering entrepreneurship and supporting the individuals in creating self-reliant and sustainable livelihoods.⁴

Outlook

The outlook for the Indian economy remains positive, with GDP growth expected to stay at 6.5% for FY 2025-26. Inflation is likely to ease further to 4% in FY 2025-26, which can boost consumer confidence and help sustain economic activity.⁵ The Government of Indias emphasis on deregulation, infrastructure and private sector participation is vital for continued growth.

India is also seeing increasing investments in manufacturing, digitisation and exports along with a steady policy environment. Initiatives such as Make in India and Skill India have improved ease of doing business and a rising global interest in India as a supply chain alternative are contributing to a stable and promising growth story.

Industry Overview

Global Education Market⁶

The global education industry is undergoing a transformation, fuelled primarily by technological advancements. The industry is expected to grow from $6 trillion in CY 2022 to around $8 trillion in CY 2030. The integration of digital tools is not only increasing the accessibility of information but also democratising learning across geographies and socio-economic classes. This has the potential to address long-standing disparities in educational access, which have contributed to global inequalities in wealth and development. The education technology (EdTech) sector is expected to be the fastest-growing segment within the education space, driven by increasing internet penetration, mobile access and the scalability of digital platforms.

Global Higher Education Market⁷

The global higher education market was valued at approximately $828.85 billion in CY 2024 and is projected to grow to around $929.47 billion by CY 2025. Looking ahead, the market is expected to witness substantial growth, reaching an estimated $2,557.93 billion by 2034, reflecting a strong CAGR of 11.93%.

The market is growing due to several reasons, technology playing a crucial role, by making learning more flexible and accessible. Innovative technologies such as augmented, mixed and virtual reality (AR, MR, VR) and blockchain are being integrated into learning. Online education platforms are becoming more popular as they offer flexible and accessible learning opportunities, eliminating geographical barriers. Governments across the world are taking steps to strengthen the education sector, by launching new policies, offering financial support and building infrastructure for education. Public and private investments are increasing as well, helping colleges grow and improve their quality. More scholarships are now available, which allows more students to pursue higher education. The Asia Pacific region is expected to be the fastest-growing area during the forecast period, primarily driven by a surge in demand for bachelors and masters degrees, as individuals seek to secure high-paying jobs.

Global K-12 Education Market⁸

The global K-12 education market was valued at $2.79 trillion in CY 2024 from $2.50 trillion in CY 2023. This is projected to grow at a CAGR of 12.5% from CY 2024 to CY 2030, reaching $5.66 trillion. The market is growing due to the rising use of game-based learning, making education more engaging and motivating students by offering personalised experiences. The method helps them build important skills like problem-solving and critical thinking. Advanced technologies like artificial intelligence (AI) are making it possible to give students real-time feedback and personalised support. Virtual and augmented reality are creating more immersive and interactive learning environments.

Governments around the world are increasing their focus on education by investing more in K-12 and STEM (Science, Technology, Engineering and Mathematics) education and introducing reforms to improve teaching methods and overall education quality. These efforts are further boosting the growth of the education market.

Indian Education Market

India has one of the largest networks of higher education institutions in the world, making it a key contributor to global learning and knowledge development. With about 24% of its population aged between 0 to 14⁹, India has a young demographic structure.¹⁰ This creates strong growth opportunities for the education sector, as the demand for quality education is expected to rise steadily in the coming years. The Indian education system is serving approximately 24.8 crore students across 14.72 lakh schools and it is supported by a dedicated workforce of around 98.08 lakh teachers.¹¹

The National Education Policy 2020 (NEP 2020) targets a 100% gross enrolment ratio (GER) by 2030. While enrolment at the primary level is nearly at 93%, efforts are being made to improve access at the secondary (77.4%) and higher secondary levels (56.2%), moving the country closer to its goal of inclusive and equitable education for all.

The growth in online education in India is expected to grow by CAGR 29% from 2024 to 2029 to reach $8.53 billion , powered by incorporation of high-quality software and strong accreditation standards. Licensing systems help build trust and safety, while digital platforms make it easier for students and teachers to connect. Developing a mindset through online education not only promotes personal growth but also has substantial implications for Indias global standing.

Indian Higher Education Market

Indiahasoneoftheworldslargesthighereducationsystems,ranking second in terms of its vast institutional network. Higher education in India begins after 12 years of schooling which comprises of 10 years of primary and 2 years of secondary education. Today, the country is home to over 1,100 universities and more than 45,000 colleges. All these institutes are overseen by the Ministry of Education, offering students a wide range of academic opportunities.¹³

1,100+

Universities

45,000+

Colleges

State public universities (SPUs) play a vital role in expanding access to education, particularly in remote regions. Today, they serve over 3.25 crore students across the country. As NEP 2020 sets the goal of doubling enrolment by 2035, SPUs are expected to play a pivotal role in educating the majority of Indias student population.¹⁴

Indian K-12 Education Market¹⁵

Indian K-12 education market was valued at $50.31 billion in 2024 and is expected to grow with a CAGR of 10.13% till 2030. Indias K-12 education market is evolving rapidly, driven by a growing population, higher disposable incomes and growing awareness of the value of quality education. From kindergarten to 12th grade, this segment serves a wide and diverse population across both urban and rural regions.

One of the main growth drivers is the rise of private schools offering a range of curricula such as national, international and specialised educational approaches. Government initiatives like the ‘Right to Education Act have further supported this growth by improving access and enrolment to institutions. The surge in digital learning tools and e-platforms, post-pandemic has made education more accessible and personalised. The growing reliance on technology has also augmented the demand for better infrastructure, including smart classrooms and digital learning resources.

Indian Test Preparation Market

The Indian test preparation market is a dynamic and highly competitive zone, offering a wide range of courses and services for different learner segments. This market is expected to grow at a CAGR of 18.5%, reaching $17.21 billion by 2029. The growing enrolment in courses catering to competitive examinations is a major driver of Indias test prep market, as more students look for structured guidance to succeed in exams. A new trend in test preparation is the growing use of analytics to personalise learning experiences and help students perform better with data-driven insights.

Some of the highest taking tests in India are as follows:

SSC (Secondary School Certificate)

SSC exams are conducted by various state boards and education councils across India, assessing students academic proficiency across core subjects. In Maharashtra, the Maharashtra State Board of Secondary and Higher Secondary Education (MSBSHSE) administers the SSC examination. In 2024, around 16.09 lakhs students registered for the Maharashtra SSC exam.¹⁶

16.09 lakhs

Students registered for SSC exam

ICSE (Indian Certificate of Secondary Education)

ICSE, conducted by the Council for the Indian School Certificate Examinations (CISCE), assesses students knowledge and application across a broad range of subjects at the end of Class 10. The exam is known for its comprehensive and rigorous curriculum. In 2024, approximately 2.43 lakhs students registered for the ICSE examination.¹⁷

2.43 lakhs

Students registered for ICSE exam

CBSE (Central Board of Secondary Education)

Conducted by the Central Board of Secondary Education (CBSE), the exam evaluates students understanding across a wide range of subjects at the end of 10th grade. It is recognised for its standardised curriculum and is accepted across India and internationally. In 2024, 22.51 lakhs students registered for the CBSE Class 10 Board Exam.

22.51 lakhs

Students registered for CBSE exam

MHSSCE (Maharashtra Higher Secondary School Certificate Examination)

The HSC exam, conducted by the Maharashtra State Board of Secondary and Higher Secondary Education (MSBSHSE), evaluates students knowledge across streams like Science, Commerce and Arts at the end of Class 12. It serves as a crucial qualification for undergraduate education. In 2024, around 15.05 lakhs students registered for the HSC exam under the Maharashtra State Board.¹⁸

15.05 lakhs

Students registered for HSC exam

7.68 lakhs

Students registered from Science stream

3.80 lakhs

Students registered for Arts stream

3.19 lakhs

Students registered for Commerce stream

JEE (Joint Entrance Examination)

Indias top undergraduate engineering entrance exams include JEE (Main) and JEE (Advanced). JEE Main, conducted by the National Testing Agency (NTA), is used for admission to B.E./B. Tech programs at institutions like IIITs, NITs and other centrally funded technical institutes (CFTIs). It also serves as a qualifying exam for JEE Advanced. In 2025, approximately 13.78 lakh students registered for JEE Main.¹⁹

13.78 lakhs

Students registered for JEE Main 2025

MHT-CET (Maharashtra Health and Technical Common Entrance Test)

MHT-CET is conducted by the State Common Entrance Test Cell, Maharashtra for admission to B.E./B.Tech programs at various government, government-aided and private engineering institutions across the state. The exam assesses candidates on Physics, Chemistry and Mathematics. In 2025, nearly 7.25 lakh students registered for MHT-CET.²⁰

7.25 lakhs

Students registered for MHT-CET 2025

CA (Chartered Accountancy)

TheCAcourseisregulatedbytheInstituteofCharteredAccountants of India (ICAI). The course comprises three stages: CA Foundation, CA Intermediate and CA Final. Each stage progressively evaluates students knowledge in accounting, law, taxation, finance and ethics. In 2024, approximately 1.62 lakhs students appeared for the CA foundation exam, while lakhs for CA Intermediate.^{21 22}

1.62 lakhs

Students appeared for CA Foundation exam 2024

3.92 lakhs

Students appeared for CA Intermediate exam 2024

CS (Company Secretary)

The CS course is regulated by the Institute of Company Secretaries of India (ICSI). The course is structured across three stages namely, CS Executive Entrance Test (CSEET),

CS Executive and CS Professional. The course trains students in corporate laws, governance, compliance and secretarial practices. In 2024, approximately 56,857 students registered for CSEET and around 1.42 lakhs for CS Executive.

56,857

Students appeared for CSEET exam 2024

1.42 lakhs

Students appeared for CS Executive 2024

NEET-UG (National Eligibility Cum Entrance Test – Undergraduate)

NEET UG, conducted by the National Testing Agency (NTA), is used for admission to MBBS, BDS, AYUSH and other medical programs in government and private medical colleges across India. It is the sole entrance exam for undergraduate medical education in the country. In 2024, more than 24 lakhs students registered for NEET UG.²³

24 lakhs+

Students registered for NEET-UG 2024

Budget Allocation to Indias Education Sector

The Government of India has allocated 128,650 crore for Ministry of Education in Union budget 2025-26, which is 6.22% greater than the previous budget. The government has launched several initiatives to improve access to education and enhance its quality. Key programmes include the PM Schools for Rising India (PM SHRI) Yojana, Samagra Shiksha Abhiyan and Sarva Shiksha Abhiyan. These initiatives, coupled with infrastructure development in higher education and the integration of skill development, aim to increase both school and college enrolment by making education more accessible, affordable and relevant to future opportunities.

Allocations to different bodies under Ministry of Education

(in INR crore)

Body	Allocations	Increase (%)
Central Universities	16,691.31	4.79%
UGC	3335.97	33.44%
IITs (Indian Institute of Technology)	11,349	9.92%
NITs (National Institute of Technology)	5687.47	12.85%
Deemed Universities	604	1.34%
IIMs (Indian Institute of Management)	251.89	18.70%
Department of School Education & Literacy	78,572	-
Kendriya Vidyalaya Sangathan (KVS)	9503	9%

Company Overview

The Company was originally incorporated under the name ‘India Tutorials Private Limited under the provisions of the Companies Act, 1956 and a Certificate of Incorporation was issued by the Registrar of Companies, Mumbai, on October 30, 2007. Subsequently, the name was changed to ‘Arihant Academy Private Limited via a shareholders resolution dated September 18, 2012, pursuant to which a fresh Certificate of Incorporation dated October 31, 2012, was issued by the Registrar of Companies, Mumbai. Consequently, the status was changed to public limited, with the name being changed to ‘Arihant Academy Limited vide a Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting held on September 09, 2022. A fresh certificate of incorporation consequent to the conversion was issued on September 19, 2022, by the Registrar of Companies, Mumbai. The Corporate Identification Number of the Company is L80903MH2007PLC175500. Further, the Company issued shares through an initial public offer (IPO) and was listed on the SME platform of NSE on December 29, 2022. The institution provides coaching services primarily in western suburbs of Mumbai. The revenue is generated from fees for coaching programs catering to SSC, ICSE, CBSE (classes 8-10) and higher secondary (classes 11-12), entrance exams (JEE, NEET) and Commerce (CA, CS) streams. The institution utilises a hybrid learning model, integrating classroom teaching with the ‘Arihant Edge digital platform.

SWOT Analysis

Strength

Extensive Physical Network

The strategic deployment of over 20 coaching centres across the western suburbs of Mumbai, provides a significant competitive edge in terms of accessibility and local market penetration. This widespread network not only caters to a large student demographic but also fosters a sense of familiarity and convenience for students residing in different localities, making quality coaching readily available within reach. Each centre becomes a local hub for academic support and peer interaction.

Hybrid Learning Model

The thoughtful integration of traditional classroom-based teaching with the ‘Arihant Edge digital learning platform represents a forward-thinking approach to deliver education. This hybrid model caters to diverse learning styles, allowing students to benefit from direct interaction with experienced faculty while also providing the flexibility and self-paced learning opportunities offered by digital resources such as recorded lectures, e-notes and online assessments. This combined approach enhances comprehension and retention.

Experienced Faculty

The Companys success lies in its dedicated team of highly qualified and experienced educators. These faculty members possess extensive subject matter expertise and employ effective pedagogical techniques tailored to diverse curricula and competitive entrance examinations. The institutions commitment to preparing its students for success and mentorship encourages a positive and conducive learning environment, contributing significantly to the academys reputation for academic excellence.

Collaboration with NSE Academy

The strategic alliance with the National Stock Exchange (NSE) Academy to launch the Fintech Analytics Professionals (FAP) programme represents a significant step towards diversification and expansion into a specialised educational segment. By leveraging the established brand and expertise of NSE Academy, Arihant Academy can attract a new cohort of students seeking careers in the fintech sector, enhancing its program portfolio and revenue streams.

Weakness

Geographical Concentration

While the strong focus on the western suburbs of Mumbai has allowed for deep market penetration and brand recognition within this region, it also inherently limits the Companys overall market size and potential for growth in other significant educational hubs across Mumbai or other parts of the country.

This regional concentration makes the Company more susceptible to local economic fluctuations and competitive pressures within this specific area.

Reliance on Traditional Coaching

Despite the implementation of a hybrid learning model, a significant portion of the Companys revenue and operational structure is still anchored in physical coaching centres and classroom-based learning. This reliance on traditional methods might limit scalability compared to fully digital online platforms and could require significant capital expenditure for expansion into new locations.

Opportunities

Expansion into New Geographies

A strategic and well-planned expansion into other promising educational markets beyond the western suburbs of Mumbai presents a significant opportunity to diversify revenue streams and tap into a larger pool of potential students. This involves establishing new physical centres, leveraging online platforms to reach students in different regions, or a combination of both approaches.

Further Digitalisation of Offerings

Enhancing the ‘Arihant Edge platform with more interactive features, comprehensive online course content, personalised learning paths and robust assessment tools can attract a wide population of tech-savvy students and improve the scalability and accessibility of Arihant Academys programmes, beyond geographical limitations.

Strategic Partnerships and Acquisitions

The Company can grow faster by partnering with diverse schools, edTech companies and other service providers and by acquiring smaller coaching centres or education platforms. By combining the resources and expertise of different institutions, the Company can create a comprehensive and effective learning environment.

Untapped Potential in Entrance Exam Segments

By conducting detailed market research, the Company can identify emerging or underserved segments in the competitive entrance exam space. This would help in designing specialised coaching programmes that meet specific needs, thereby opening new revenue generating opportunities.

Threats

Increasing Competition

The coaching market is becoming increasingly crowded with the rise of online platforms offering flexible and often cheaper alternatives, alongside the expansion of well-established national coaching chains. This intensified competition could put pressure on Arihant Academys enrolment numbers and pricing strategies, requiring them to continuously innovate and differentiate their offerings to maintain a competitive edge.

Changing Educational Policies

Shifts in school curricula by educational boards or significant reforms in the structure and syllabus of crucial entrance examinations could necessitate substantial and potentially costly adjustments to the Companys teaching methodologies and study materials. The need to adapt quickly to these changes is vital for ensuring the continued relevance and effectiveness of the programmes.

Faculty Attrition

The loss of experienced and skilled teachers to competitors or other opportunities can negatively impact the quality of coaching provided at Arihant Academy. Retaining qualified faculty is crucial for maintaining the institutes academic standards and reputation.

Internal Control Systems and their Adequacy

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

Financial Performance

During the reporting year, Arihant Academy Limited delivered strong financial performance across various financial parameters, including revenue, gross margin and EBITDA.

Particulars	FY 2024-25	FY 2023-24
Revenue	4257.81	3155.46
EBITDA	778.16	347.33
Profit Before Tax	570.9	179.21
Profit for the Year	444.51	154.8
Net Worth	2504.14	2120.18
Operating Profit Margin (%)	18.69%	10.39%
Net Profit Margin (%)	10.96	5.11
Reserves and Surplus	1898.62	1514.66

Human Resources

Arihant Academy Limited believes that its people are its greatest strength and remains focused to building strong teams of talented professionals. Employees are recognised as the most valuable asset and it places a strong emphasis on employee engagement, growth and well-being. The Company creates a positive work environment, encourages collaboration, recognises achievements and promotes a culture of growth and motivation.

Key Financial Ratio

Particulars	FY 2024-25	FY 2023-24	Variance	Remark
Debtors Turnover Ratio	97.23%	127.50%	-23.74%	NA
Inventory Turnover Ratio	NA	NA	NA	NA
Interest Coverage Ratio	-	-	-	-
Current Ratio	1.04%	1.68%	-38.01%	Reduction in current liabilities as compared to previous year.
Debt-Equity Ratio	-	-	-	NA
Operating Profit Margin (%)	14.14%	5.94%	138.05%	Increased due to increment in turnover of Company
Net Profit Margin (%)	10.96%	5.10%	114.48%	Increased due to increment in turnover of Company
Debt Service Coverage Ratio	-	-	-	NA
Return on Equity	19.22%	7.58%	153.62%	Due to increase in profit.
Trade Receivables Turnover Ratio	97.23%	127.50%	-23.74%	NA
Trade Payables Turnover Ratio	58.67%	59.40%	-1.23%	NA
Net Capital Turnover Ratio	1.58%	2.76%	-42.88%	Due to new branches capitalised during the year, the company is in the expansion phase.
Net Profit Ratio	10.96%	5.11%	114.48%	Due to increase in profit.
Return on Capital Employed	22.90%	19.20%	19.29%	NA
Return on Investment	1.64%	-	-	NA

Change in Return on Net Worth Compared to the Previous Financial Year along with a Detailed Explanation and Analysis

The Return on Net Worth for FY 2024-25 was 17.75% and for FY 2023-24 was 7.30%. The Company is in the growth phase and therefore has incurred substantial expenses towards the business growth and for the purpose of fund raising by getting listed on the NSE EMERGE stock exchange.

Forward-Looking Statement

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic and natural calamities, over which we do not have any direct/indirect control.