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CL Educate Ltd Management Discussions

Jul 12, 2024|03:32:32 PM

CL Educate Ltd Share Price Management Discussions


Incorporated in 1996, CL Educate Limited is an asset light technology driven company which operates in 2 segments – EdTech & MarTech. CL Educate has established itself as a market leader in its core businesses, catering to both consumers and enterprises and has a wide range of product offerings delivered through physical and digital channels.

CL Educate – Strengths

- Asset-light, technology-enabled business model

- Strong brand equity with legacy of 27 years

- Strong geographical pan-India presence

- Increased penetration in the Middle East, Singapore, USA, Mauritius, and Indonesia

- Highly skilled in-house content development team, with domain & subject-matter expertise

- Quick and easy adoption of technology

- Long-term customer relationships

- Professional & qualified entrepreneurial management team

- High standards of corporate governance

EdTech Segment

The educational segment of the group comprises business generated and serviced through educational services such as Test Preparation, Content Monetization & Student Mobility. CL Educate offers a bouquet of services which caters to a students entire journey from foundation to preparation for undergraduate entrance exams to preparation for post graduate entrance exams and preparation for Job Oriented exams as well.


• Omni channel presence

• Strong phy-gital business across PG and UG segments with market leadership in preparation for MBA & Law entrance examinations

• Segment with new opportunities, such as, CUET (Common Universities Entrance Test) & Student Mobility business

• Proprietary content, complemented by experienced faculty members & trainers.

• Pan-India reach through ~170+ centers spread across the country and presence in the Middle East, Mauritius & planned expansion in Africa & East Asia .

Aspiration Platform:

Comprehensive platform to fullfill all the needs and requirements of the student to realise his/her potential and make his/her career dreams come true.

MarTech Segment

Unique, integrated, solution-driven services for corporates, comprising:

• Go-to-Market and Capacity Building: Event management, marketing, training & research, improving sales-channel efficiency, and customer loyalty programs.

• Meta-Commerce via the Kestone Metaverse

• Strong international presence – Singapore, USA, Mauritius, Indonesia & UAE.

• VOSMOS platform rated amongst the top 10 platforms globally.

• Caters to some of the top brands of the world including but not limited to – Dell, AWS, Cisco, Google, Accenture, Microsoft, etc.


EdTech Segment: Test Preparation

The market size of the Indian test preparation segment is projected to be around $1.4 Bn in 2022, with an anticipated compound annual growth rate (CAGR) of 30% from 2022 to 2030. It is expected that by the year 2030, the market will reach a substantial value of $9 Bn

[Source: Inc42]

Factors driving the growth of the test preparation market in India include the increasing competition for entrance exams, the rising aspirations of students and parents, the importance of securing a good rank or score for higher education and career prospects, and the growing awareness about the benefits of professional coaching.

The Market

The test preparation market can be broadly classified into:

- Foundation Preparation

- Undergraduate Entrance Exam Preparation

- Postgraduate Entrance Exam Preparation

- International Exam Preparation

Foundation Preparation

Foundation preparation programs cater to students in their early years of education, typically from classes VI to X. These programs aim to lay a solid groundwork in subjects such as mathematics, science, English, and social studies. The objective is to equip students with the necessary knowledge and skills that will form the basis for their future academic pursuits and competitive exams. This includes preparation for Board examinations and typically includes supplementary tuitions provided to students in addition to the classes taken by student in their primary institutions/schools.

Undergraduate Entrance Exam Preparation

Undergraduate entrance exams vary across different fields of study, such as engineering, medical, law, management, design, and more. These exams include well-known entrance tests like the Joint Entrance Examination (JEE) for engineering, National Eligibility cum Entrance Test (NEET) for medical, Common Law Admission Test (CLAT) for law, and various entrance exams for management programs.

Law: Over ~ 60K students registered for CLAT 2022 exam (PG & UG) and ~15K students registered for AILET 2022 for admission in some of the best law colleges. Law is one of the fastest-growing segments of the test-preparation market with a CLAT score accepted by more than 70 law colleges across the country.

IIT-JEE: The Joint Entrance Examination (JEE) is a highly competitive entrance exam in India. It is part of the test preparation segment. It is conducted for admission to undergraduate engineering programs at prestigious Indian Institutes of Technology (IITs), National Institutes of Technology (NITs), Indian Institutes of Information Technology (IIITs), and other centrally funded technical institutions. Over ~1.5 Mn students registered for JEE 2022 examination.

NEET UG: The National Eligibility cum Entrance Test (NEET) is conducted for students seeking admission to undergraduate medical and dental programs in various government and private medical colleges across the country. With over ~2 Mn students registered for NEET 2023, currently it is one of the biggest examinations being conducted in India.

IPM / BBA: IPMAT exam is conducted by IIM Indore for admission to Five Year Integrated Programme in Management. The score is accepted not only by IIM Indore but also by IIM Ranchi, IIM Rohtak, IIM Bodhgaya, IIM J&K, IIFT, NALSAR University Hyderabad, Nirma, and TAPMI for their Integrated BBA+MBA degree. This is one of the fastest growing sub-segments with more and more colleges offering 5 year integrated courses.

CUET: The Common University Entrance Test (CUET), formerly known as Central Universities Common Entrance Test (CUCET), is a nationwide examination conducted by the National Testing Agency. It serves as the gateway to admission for numerous undergraduate, integrated, postgraduate, diploma, certification courses, and research programs offered by 45 central universities and 204 state, private and deemed universities/colleges in India. CUET is the fastest growing sub-segment of the test preparation market in India. While the first edition of the examination saw ~14 Lacs candidate registrations, the 2023 edition saw the registrations rose to ~ 16.85 Lacs. The registrations are expected to rise further as more and more colleges start accepting CUET as the entrance examination. With talks being held to infuse the JEE/NEET examination under CUET umbrella, CUET is set to be crowned as the biggest examination in modern India in terms of number of test takers.

The NTA has declared that foreign, NRI, and OCI students now can apply for CUET 2023 to pursue Study in India. This initiative by the NTA is expected to inspire many foreign students to take the exam and test their abilities and skills. Every year thousands of students from countries like Nepal, Sri Lanka, South Africa, Qatar, UAE, and many more travel to pursue graduation and study in India at various top UG universities.

Post Graduation Entrance Exam Preparation

MBA: The number of candidates appearing for the CAT exam in 2022 witnessed an increase, reaching ~0.26 Mn compared to ~0.23 Mn the previous year. Similarly, the number of test takers for the XAT exam in 2023 was recorded to be close to 0.1 Mn students. CAT and XAT are considered significant exams for securing admission to prestigious institutions like the IIMs and XLRI. The market for these entrance exams has reached a high level of maturity. However, the growing significance of state entrance tests like MHT CET has the potential to expand the market size in the coming years.

International Exam Preparation & Student Mobility

The number of Indian students choosing to pursue higher education abroad has been witnessing rapid growth, surpassing the growth rate of domestic students by more than six times in the past three years. In 2019, the number of Indian students studying abroad reached ~770K. It is projected that this number will more than double by 2024, reaching ~ 1.8 Mn students. These students are expected to contribute significantly to the overseas economy, with an estimated expenditure of $75-85 Bn.

[Source: Redseer Report]

There are several factors contributing to students moving out of the country which includes:

• Attractive salary packages abroad

• High quality of education

• Pursue niche courses

• Gain International exposure

In the past 3-5 years, Canada has become the top choice for Indian students seeking education abroad, surpassing the USA. This shift in preference can be attributed to Canadas liberal immigration policies and its reputation for offering high-quality education and living standards. While the growth of Indian students going to the USA for higher education has been affected by stricter policies in recent years, it is expected to rebound in the upcoming period. This is because the USA is currently experiencing a shortage of skilled labour, making it an attractive destination for students seeking employment opportunities after completing their studies.

Other top destinations include Australia, New Zealand, United Kingdom, UAE, and Ireland. India is considered one of the most important supply markets for these foreign destination colleges and universities and has replaced China as the top supplier of students.

MarTech Segment: The Rise of Hybrid Events

Lifting of the lockdown conditions has reopened avenues of physical events. While the business giants of the tech world have opted to organize more on field events, emerging businesses have found a mix of physical & virtual event to be more suitable to their needs giving rise to the hybrid events.

Hybrid events provide valuable data and analytics. With the ability to track participant engagement, collect feedback, and measure performance metrics, organizers can gain insights to improve future events and tailor their offerings to meet attendee preferences.

Looking ahead, the future of hybrid events appears promising. The COVID-19 pandemic has accelerated the adoption of virtual event technologies, leading to the increased acceptance and demand for hybrid event experiences. Event organizers are progressively incorporating hybrid components into their strategies to create a seamless fusion of physical and virtual engagement. This creates a mutually beneficial situation for both parties involved. On one hand, emerging businesses with budget constraints can effectively engage their audience, while on the other hand, organizers can enhance their margins by reducing variable costs associated with the project.


The Company operates in 2 business segments:

1. EdTech 2. MarTech

Under the EdTech segment it further serves various products which can be broadly categorised into:

• Test Preparation

• Content Monetization

• Platform Monetization & Student mobility

As a part of its test preparation offerings, CL Educate operates under the ‘Career Launcher? brand, offering various products through its Digital & Business Partner channels of distribution. The offerings consist of:

a. Aptitude products for entrance exams like – CAT, XAT, SNAP, CLAT, AILET, Bank, SSC, etc

b. Knowledge Products for entrance exams like – JEE, NEET, GATE, CUET, etc.

c.International Education products like – GRE, GMAT, SAT, TOEFL, IELTS, PTE, etc.

Content Monetization

As a part of its Content Monetization offerings, CL, under the brand name GK Publications, distributes titles under 3 categories: a. Technical (comprising titles for GATE, technical vacancies in government jobs, etc.) b. Non-technical (comprising titles for CAT, Bank/SSC examinations, Civil Services examination, CUET, etc.) c. School business (comprising titles relevant for students preparing for their Board exams) In addition to the above, CL also does B2B content publishing on demand for other institutions, including other online EdTech giants, meeting their content requirement needs. This business is largely inventory free and has considerably lower receivable periods, improving collections and business efficiency, resulting in better profit margins.

Platform Monetization

Under its Platform Monetization & Student mobility, CL offers an array of its products such as:

a. Integrated solutions to educational institutions & universities across India

b. Student Recruitment Services

c. Marketing and Student Outreach services

Operating under the brand CL Media, the institutional business arm of CL Educate offers digital marketing & print solutions, events, and student outreach services to higher education institutions & universities across India.

Working with more than 300 institutional partners, CL Media has helped institutions enroll more than 1 Lac students till date via its annual outreach initiatives including student fairs, seminars, workshops, brand building initiatives, etc.

Over the last year this service has been extended to international universities and specifically to Indian students targeting them via admission consulting support services, allying with Career Launcher?s core test prep business by also offering preparation for international examinations. Additionally the student mobility business provides value added services to students going abroad including document verification, visa assistance, housing and accommodation services, etc. through an allied network of domestic and international partners.

The Student Mobility business includes the following services:

a. Admission Consulting
a. Counselling & Support
b. Guidance & Review – SOPs/Essays/Selection of Colleges
c. Interview preparation


b. Exam Prep
c. GRE d. SAT


c. Visa Consulting
a. Interview Preparation
b. Verification of Funds
c. Online Application & Docket Preparation


d. Value Added Services
a. Accommodation
b. Health Insurance
d. Travel Insurance
e. Education Loans


For the MarTech segment, under the brand name Kestone, the
company offers the following services to corporates:
a. Experiential Marketing & Event Management Solutions
b. Digital & MarComm services
c. Customized Engagement Programs (CEP)
d. Transitioning Biz into Metaverse
e. Strategic Business Solutions

Experiential Marketing and Event Management

Product Launches: Product launches and brand activations are about giving our clients a unique platform to showcase their products to propel them into the market in an effective manner.

Dealer Meets / Sales Conferences / Seminars: In addition to flawlessly-run conferences, Kestone brings vision, flair, and 20 years? experience to the designing & execution of genuinely inspiring meetings.

Exhibitions: Dynamic, successful marketing events, whether in the form of networking hubs of a client?s conference, or a standalone trade fair.

MICE: Tailor-made MICE (Meetings, Incentives, Conferences, and Exhibitions) strategically planned and beautifully executed, designed to build relationships, motivate, and inspire.

Demand Generation

Digital & Marketing Communication (MarComm.) Services

Web Design & Development

Collaboration of the best digital designs, front-end UI

& CSS, and back-end programming minds in the region. Kestone designs websites that convert visitors into customers; and a user experience (UX) that is engaging enough to ensure multiple visits over time.

Content Marketing

The team defends the written word to the end, crafting content that is in sync with the brand, is relevant, and that people want to share—be it in print, online, or via social media.

Social Media Marketing

Kestone puts in place a pioneering combination of traditional marketing, search marketing, and social media to work for a client?s brand, improve direct website traffic, generate brand buzz, and enhance search-engine rankings.

E-Mail Marketing

Kestone has honed its email marketing process to ensure a results-driven approach to messaging, Call-to-Action (CTA), lead capture, and conversion metrics.

Digital Advertising & Media Buying

Kestone makes sure companies get the best ROI in social advertisingthroughstrategicplanning,top-qualityadcreatives, and ongoing campaign measurement & optimization.

Customized Engagement Programs (CEPs)

Loyalty Programs

Designing relevant loyalty programs for a client?s products & services for customer retention, taking care of registrations, and validation of the client?s service offerings.

Rewards Programs

Recommending an impeccable rewards program plan, especially for those customers making frequent purchases from a client; and getting them hooked to the brand.

Audience Generation and Management

Giving the best audience definition for a client?s business plan & program, along with the optimum audience generation possible with audience management for live events.

Pipeline Management

Laying down an approach, both systematic and visual, for a client to sell their products and services to the target audience, while generating the maximum ROI.

Lead Generation Activity

Initiating the maximum customer interest through optimum lead-generation activities; and getting the best potential leads in the market.

Virtual Events Transitioning Business into Metaverse

While this segment is an upcoming space in the array of service offered by Kestone, it is one of the most promising areas with high growth and margin.

Kestone helps transform client?s business from a 2D digital store format into a 3D metaverse enabled store, enabling business through blockchain, giving their customers a better experience rather than a static 2d view.


EdTech Segment

India Expansion

After the worldwide pandemic and the subsequent reopening of physical centers, the EdTech segment experienced a swift rebound in its revenue. The reopening of these physical centers resulted in a surge of prospects, as students returned to the traditional offline setting for the delivery of educational services. The company not only reinforced its partnership with its legacy business partners during the year, it also managed to add in excess of 50 new study centers. The company, as a part of its strategic vision of growing the partner business to 500 centers in upcoming 5 years, has also started setting up dedicated CUET centers. Looking at the market potential and in its advent to capture market share in the CUET market, these exclusive UG product study centers will play a pivotal role in expanding its reach further to Tier II & Tier III cities of the country.

International Expansion & Student Mobility

Keeping in mind the booming student mobility market and the potential which the market holds, the company is looking to expand its reach in various parts of the world. While the company is quite well established in the UAE – Dubai, Abu Dhabi & Sharjah, the expansion in the MENA region through the Business partner route along with improving current operations is already underway. Other than MENA, the company is also looking at East & South Asia for further expanding its reach, with a near term focus on SAARC countries.

Test Prep Highlights

The company has serviced approximately half a Mn test preparation consumers (Paid and Unpaid) in FY23. Total GMV of products sold during FY23 rose to 26,699 Lacs from 20,936 Lacs in FY22. Opening of centers have increased offline enrolments contribution from 34% to 46% in FY23.

MBA & Law Prep continue to be the flagship product categories with the groups contributing nearly 70% of the topline of the test preparation business. Upcoming products such as IPM/BBA & CUET are performing strongly with CUET contributing nearly 1,100 Lacs to the topline.

The UG segment comprising of Law, CUET, IIT-JEE & NEET and IPM/BBA contributed nearly 60% of the test prep business and PG segment contributed 38% of the test prep business.

MarTech Segment

The MarTech segment was the biggest beneficiary due to reopening of the physical world. Physical events have made a strong comeback, however, clients? interest has also been piqued by the advent of hybrid events wherein certain portion of their event could be held in the virtual world.

The MarTech segment has made rapid progress in developing the extended version of VOSMOS and has been able to launch its DIY version.

It has also been steadily developing the Kestone Metaverse (Meta-Commerce platform) and is targeting certain focussed industries such as Real Estate, Hospitality, Retail & E-Commerce, and Education. It has successfully completed the pilot of the Meta-Universe for a well-known chain of hotels and has received an order to build the futuristic Muscat city.

Kestone?s international operations have shown a strong growth in FY23, with revenues increasing by 25%. While physical events have returned, the costs associated with these events have also gone up and thus the margins for this segment are slightly muted as

Kestone Virtual Metaverse

Some of the key features of the Kestone Metaverse for masses include:

Corporate Updates

The company has taken several measures to optimize shareholders value by not only continuously working to improve our financial performance metrics but also implementing shareholder-friendly initiatives to distribute wealth back to shareholders.

As a result, the company has also achieved the status of being a Net Debt Free Company, retaining only the bare minimum amount of debt to maintain its excellent banking relationships with key stakeholders.


Return of Surplus Funds to Shareholders

Buyback 2022-23

In line with its strategy to return surplus funds to shareholders, the Board at its meeting held on May 19, 2022 approved a buyback of its fully paid-up equity shares having face value of 5, via the open market route through Indian Stock exchanges amounting to 1,000 Lacs (Max buyback size excluding buyback tax and related expenses) at a price not exceeding 170 per share (Pre-Bonus price).

compared to the revenue growth. The company expects the margins to improve going further with increased revenue generation from Meta-Commerce and Hybrid projects.

The company has set its sight on International Expansion as a key strategic initiative for FY 24 and looking for operational expansion in USA & Singapore while tapping into a new market in Indonesia by setting up a new base of operations in the country.

Improving Financials & Profitability

The cash position of the company has improved significantly over the last year. The Net Cash position has improved ~50x in FY23 as compared to FY 19 (Pre-COVID). Company currently has nearly ~ 100 Cr of Cash in various forms available at its disposal, this after returning ~10 Cr to its shareholders via a buyback route in FY23 in addition to ~2 Cr of buyback related taxes and expenses.

The company has also generated its highest ever profits of 24.6 Crs for FY23 in its 27 years of existence, surpassing last year?s total comprehensive income by 68.4%, up from 14.6 Crs. This has also resulted in improved comprehensive income margin to 8.2% from 6.7%.

Bonus Issue 2022-23

The company at its meeting held on November 02, 2022 approved and recommended a Bonus Issue of Equity Shares in the ratio of 1:1 i.e. One Equity Share of 5/- each to be issued for each One existing Equity Share of 5/- each held by Shareholders of the Company, as on the record date.

Financial Highlights

(In Lacs)

FY22 FY23 % Change
Revenue from Operations 20,917 29,131 39%
Total Income 21,787 29,771 37%
Operational Expenses 18,868 26,564 41%
Total Expenses 20,027 27,841 39%
EBITDA 2,920 3,208 10%
Profit Before Tax 1,760 1,931 10%
Taxes 343 (379) (211%)
Net Profit After Tax 1,379 2,253 63%
Total Comprehensive 1,458 2,456 68%

Revenue from Operations

The revenue from operations increased by 39% to 29,131 Lacs in FY23 from 20,917 Lacs in FY22. y The EdTech segment recorded a growth in revenue of 34% to 17,596 Lacs in FY23 from 13,104 Lacs in FY22. This was mainly due to the following reasons:

o The reopening of physical centers and an increase in average revenue per user (ARPU) of the products sold contributed to the revenue growth.

o The addition of CUET to the product offerings provided a boost to the overall revenue.

o The reopening of the physical world resulted in an increase in book sales, leading to a 67% growth in the publishing business.

o Platform monetization and student mobility business witnessed a 23% growth, primarily driven by the reopening of colleges and universities.

o The company has also explored student mobility as a new avenue of business to further enhance its earnings potential.

- The MarTech segment recorded a growth in revenue of 48% to 11,536 Lacs in FY23 from 7,813 Lacs in FY22 on the back of steep growth recorded in its international business operations as well as return of physical events.

Segment Wise Revenue

(In Lacs)

FY22 % Contribution FY23 % Contribution
EdTech 13,104 63% 17,596 60%
MarTech 7,813 37% 11,536 40%
Total 20,917 100% 29,131 100%

Cost of Material Consumed & Purchase of Stock-in-Trade

The Cost of Material Consumed has increased by 58% to 753 Lacs in FY23 as compared to477 Lacs in FY22 and the Purchase of Stock-in-Trade has increased by 47% to 35 Lacs in FY23 as compared to 24 Lacs in FY22. This was mainly due to increase in sales in the Test Preparation and Publishing Divisions coupled with an increase in paper prices due to the Russia-Ukraine conflict. The company successfully transferred the impact of a 38% increase in paper prices to its consumers by adjusting the prices of its products.

Employee Benefit Expenses

The employee benefit expenses have increased by 25% to

4,656 Lacs in FY23 from 3,721 Lacs in FY22. The company is investing in people across diverse functions, especially in business development, product development, technology and marketing to generate targeted revenue and capture market share in new lines of business – CUET & Student Mobility.

Service Delivery Expenses

The service Delivery expenses have increased by 46% to 15,819 Lacs in FY23 from 10,857 Lacs in FY22. These includes our franchisee costs – the revenue share that we give back to our franchisees in the EdTech business and any service costs related with our Kestone MarTech business. These are specifically the increased servicing costs to deliver higher revenues and matches the increase in the topline across both the EdTech & the MarTech businesses.

Sales & Marketing Expenses

The Sales & Marketing expenses of the company increased by 61% to 2,104 Lacs in FY23 as compared to 1,303 Lacs in FY22. This was in line with company?s strategy to have a greater market share in various established as well as new verticals such as CUET and Study abroad.

Finance Costs

The Finance Costs have decreased substantially by 54%, despite the working capital requirements to fund the business. The Finance costs are down to 160 Lacs in FY23 from 352 Lacs in FY22. This is inline with a decrease in our borrowings to 1,045 Lacs in FY23 from 1,697 Lacs in FY22. The company has achieved a Net Debt Free condition and is well poised to be a completely Debt Free company should we choose to go that route in the future.

Depreciation & Amortization Expenses

The Depreciation and Amortization expenses have increased by 38% to 1,117 Lacs in FY23 as compared to 807 Lacs in FY22. While the depreciation has decreased by 50% due to sale of fixed assets, the amortization expenses have increased due to ongoing development in EdTech & MarTech segment, such as, the aspiration. Ai platform & Metaverse, respectively. The increase is also due to an increase in Depreciation on Right of Use Asset by 82% as per the compliance requirements of IndAS 116 (Leases).

Other Expenses

The Other expenses have increased by 16% to 2,962 Lacs in FY23 from 2,545 Lacs in FY22. This was mainly due to an increase in office and running & maintenance expense due to opening up of offices and physical centers post COVID.

Exceptional Items

The Company has recorded following items under the category of Exceptional items for FY23:

S No. Particulars (In Lacs)
1. Net Gain on sale of Asset – Greater NOIDA & Indore property 2,425
2. Write-Off Loan given to CLEF (1,215)
3. Loss due to difference between Fair Value and Carrying value of Investment (B&S Strategy Services Pvt. Ltd.)* (569)
3a. Net Write-Off of related receivables* (361)
4. Impairment Loss related to Goodwill – ICE GATE Educational Institute Pvt. Ltd. (296)
Total Exceptional Loss (16)

*Although the company has prudently written off the amount, it does not relinquish its right to pursue legal action against B&S Strategy Services Pvt. Ltd

Key Ratio Analysis

Although the company has seen an increase in its operating and net profits in terms of absolute figures, this growth does not align proportionally with the increase in its topline. While revenue has risen due to the resumption of physical operations in the EdTech and MarTech segments, resulting in students returning to physical centers and the revival of physical events, operating expenses have also surged due to associated cost increases.


Opportunities & Threat


CUET – The Next Big Thing

Post the inaugural edition of the examination in 2022, which saw ~14 Lac students register for the same, the 2nd edition of the examination in 2023 clocked ~17 Lacs students register with more than 240 Universities and colleges taking this examination as the gateway to seats in various streams of study.

CUET expanded its reach globally as the Government of India established examination centers outside the country for admissions to Indian universities. There have been discussions regarding the inclusion of JEE and NEET examinations within the scope of CUET, which would significantly boost its market size. The management anticipates that within five years, the market size of CUET could grow to nearly three to five times its current size.

The Company has already made inroads in the market and has made organic investments in terms of people, product, and marketing to be able to generate a strong word of mouth amongst its target audience.

In FY23, CUET made a significant contribution of approximately 1,100 Lacs to the companys overall revenue. The management foresees CUET becoming the third-largest contributor to the companys revenue in the coming year, and within a span of 5-7 years, it has the potential to become the highest revenue generator given that the potential market size is so much larger than legacy products like MBA and Law.

Student Mobility & Study Abroad

With an anticipated global market size of nearly 6 Mn students who study in non-native countries, this is another segment where the management of the company expects to make deeper penetration in terms of market share. While this segment is currently highly competitive with a large number of national and international players, there are only a limited set of providers that offer a comprehensive bouquet of services, including admission counselling, test preparation (GRE, GMAT, SAT, IELTS, etc.), admission consulting, education loan assistance, and visa guidance.

The company aims to fill this gap and establish itself as a reputed player offering end-to-end solutions within this market space. What benefits the company significantly in this exercise is its unique positioning as having cared for student?s careers for the last 27 years, having found best-fit colleges for them in India and Abroad. Having a core purpose that puts the student first allows the company to compete aggressively with ‘educational consultants? who have traditionally about using student visa as a means towards immigration rather than education.

The company has initiated the establishment of dedicated study abroad centers, offering a comprehensive range of products tailored for aspiring students planning to pursue education overseas. These centers are rapidly expanding across different regions of India. Moreover, the company recognizes the potential in countries beyond India, including the Middle East, Africa and SAARC nations. To tap into these markets, the company is actively seeking business partners, which not only allows for scalable growth but also contributes to the companys revenue and profit margins. This expansion strategy is advantageous for the company as it requires minimal capital expenditure (CAPEX) and offers the potential for significant scalability.

The management expects this market segment to have the potential to become the 4th pillar of the EdTech business in terms of revenue generation in the upcoming 4-5 years.

The Meta-Commerce

The MarTech segment witnessed the emergence of a new subsegment called the Virtual world during the pandemic, allowing users to engage within technology-generated environments and interact with others in real-time. However, with the easing of pandemic restrictions and the reopening of physical spaces, leading tech companies have found the combination of physical and virtual world events, known as the Hybrid Mode, to be more appealing. This has given rise to the Meta-Commerce world, where consumers can interact virtually and enhance their experience using tools like VR glasses.

The company recognizes the tremendous potential in the Meta-Commerce industry and is actively developing models to help small and mid-sized businesses transition from traditional 2D web pages to immersive 3D stores, offering customers a more engaging experience. Notably, the company has undertaken significant projects for a renowned hotel chain in India and has also secured several contracts both within India and internationally.

While undoubtedly exciting, both web 3.0 and the metaverse are at a very nascent stage of adoption, akin to dot coms in the late 1990s. These will take time, development and tectonic shifts to become the go to world of ecommerce for businesses. That being said, it is very much the future of commerce, and having an early first-mover advantage for any business will give it a leg up not just in business but in understanding consumer behaviour from what could well be the new normal in 5-10 years.


Unicorns in the EdTech Space

While the funding winter has undoubtedly impacted the growth trajectory of some of India?s largest unicorns, they continue to hold enormous spending potential and have largely operated in product segments adjacent and not in direct competition with our company?s core business. These organizations, whilst facing cost and profitability challenges of their own, could well decide that the UG Test Prep segments like CUET, IPM and Law deserve greater focus on their portfolio and could use their considerable marketing budgets to disrupt the market-place.

Rising Production expenses due to increase in paper cost

The prolonged war between Russia and Ukraine has led to an increase of 35-40% in paper costs and as a result the production costs typically for the publishing industry has seen a significant rise. Coupled with this is the increase in domestic and international central bank rates have led to increase in inflation. Most of these costs have been passed on to the consumers and the company has also reduced its borrowings to 1,045 Lacs from 1,697 Lacs, thereby reducing the burden of interest.

Slowdown in the Global Economy

Global economic conditions have worsened post the Russia-Ukraine war. While the inflation has risen, the economic conditions of several major economies have declined leading to budgetary cuts typically related to marketing spends of corporates. India has maintained and has outgrown almost all major economies in terms of GDP growth and has not let the global slowdown affect its economy to as much extent, however the effects are being felt in certain sectors / industries. The company has diversified its top line, thereby reducing its dependency on one economy and mitigating the effect of global slowdown. The Company is exploring developing and developed economies in Mauritius, Indonesia, SAARC & Middle East countries to improve its topline and bottom line margins

This will not only help the Company deliver value to its customers in the most efficient way, it will also maximize shareholders value by improving its margins in the long run while adhering strictly to Governance principles and Core values (‘ROOHI?) of the Company.

Internal Financial Control Systems and their Adequacy

As a diversified enterprise, CL Educate continues to focus on a systems-based approach to business risk management.

The management of risk is embedded in the corporate strategies of developing a portfolio of world-class businesses that best match organizational capabilities with market opportunities, focusing on building distributed leadership & succession planning processes, nurturing all-round skills, and enhancing organizational capabilities through timely developmental inputs. Accordingly, management of risk has always been an integral part of the Company?s ‘Strategy of Organization?; and straddles its planning, execution, and reporting processes & systems. The Company?s internal control system is commensurate with its nature, size, and complexities of operations.

The Audit Committee and CFO actively review the risk-control mechanisms, and suggest control-strengthening norms, where required. Respective business heads and the CFO are regularly apprised of Internal Audit findings; and take corrective action (if required) based on the same.

Risk Management - Framework

The Company has a robust risk-management system, which is illustrated below:

Risk Identification

Risk context sets the criterion against which risks are identified and assessed, thus defining the external & internal parameters to be considered. The risk-management policy, framework, and supporting guidance spell out how to manage risks; such as, how to determine probability and impact, as well as instructions on how to translate these into an overall risk level.


We facilitate a risk-assessment process through discussions with the leadership, senior management, and key stakeholders from each business area. For each risk identified, the risk level is rated. The adequacy of action plans to address any remaining control gaps is then assessed. We do this for both new risks identified, as well as those already being monitored. Horizon scanning also takes place throughout the year to aid in the identification of new risks.

Treatment & Mitigation

Once assessed, the most appropriate course of action for each risk is decided, taking into account the size of the gap between its current risk status as against its risk appetite target. This can include ‘avoid? (i.e., not doing something); implementing mitigation or contingency plans to change the probability or reduce the impact of a risk; accepting increased risk in order to pursue an opportunity; or sharing the risk with another party or parties.

Monitoring and Review

The Board, Audit Committee, and Risk Management Committee meet on a periodic basis. This gives them the opportunity to review, challenge, and validate the ERM process and key risks. The discussions revolve around the key risks identified, mitigation plans finalized, owners of risk identified, and progress monitoring. With its operations in many different industry segments, CL Educate Ltd is exposed to both internal & external risks. The Company has in place a structured, robust, and well-documented risk-management policy, which lists the identified risks, their impact, and the mitigation strategy.


Risk Faced Mitigation Approach
Significant operating revenues from a business segment; and, consequently, any failure to sustain, expand, and scale the revenues in that segment The company operates in 2 reportable segments - EdTech & MarTech and within each segment caters to various sub-segments across various regions to reduce concentration of revenue from a particular segment.
The Company is also rapidly expanding its geographical reach by setting up offices in Indonesia, USA, Mauritius and Middle East and acquiring new clients to mitigate the risk of revenue concentration from a few clients/selected geographical areas.
Seasonality of different products/ businesses & significant changes in test patterns and/or number of competitive exams The Company has a wide array of products to offer in its segments to cover the seasonality effect around the year.
The company is also constantly adding new products to its basket of offerings and adapting newer and efficient technology to remain ahead in the efficacy curve.
Quality control across all the centers in the Test Preparation division related to delivery of lectures and study material The Company maintains strict quality control for delivery of lectures and study material through the following means:
a. Aspiration Platform: Aims to cater to all students by regularly updating them on changes in exam patterns, exam dates, and syllabi. It serves as a centralized platform where students can access various value-adding sectional and full-length tests and revision materials.
b. Centralized Sourcing of Material: The study material in the form of books and classroom exercise worksheets being provided to students during classroom sessions are all to be sourced centrally. The same is true for all network centers as well as owned physical centers.
c. Regular Teacher training being provided to all the faculties – Business Partner and Owned locations.
d. Regular Academic Audits of study centers.
e. 360 degree feedback for faculties.
Adherence to the center running and maintenance guidelines The company conducts regular third-party audits of all its study centers nationwide. These centers are evaluated based on their adherence to company policies. Centers that receive excellent ratings are rewarded, while those with lower ratings receive extra attention and support from the company to help improve their governance. This assistance enables them to focus on their business growth while ensuring smooth internal processes.
Inability to attract/hire and retain new, young, and aspiring talent Keeping up with the industry standard salary and motivating employees to take complete ownership of the business processes thereby creating an atmosphere of leadership and trust within the team.
Data breach, cyber security risks and social engineering attacks The Company recognizes the risks related to cyber-attacks and has implemented regular cyber security audits to strengthen its network system against the same.


Risk Faced Mitigation Approach
Economic slowdown in the US The company operates in several markets including India, USA, Mauritius, Singapore, Indonesia & Middle East catering to different sets of customers to prevent the concentration of revenue to just a few customers or limit it to certain geographical regions.
Ability to keep pace with technological advancements and innovations The Company has been developing the Metaverse platform on cutting edge technology and has also launched a DIY (Do-It-Yourself) version of the same. The company is heavily investing on the technology side to keep pace with the latest innovations in terms of offerings to its customers.

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