CL Educate Ltd Management Discussions

Overview

Founded in April 1996, CL Educate Limited began as a single coaching center focused on one product. Today, it stands as a well-diversified, technology-enabled leader in the education sector. The company has expanded its offerings to include a broad range of products across both physical and digital channels, catering to consumer and enterprise markets. It operates in the EdTech & the MarTech segments.

CL Educate has established itself as a market leader in test preparation and training services, publishing and content

development, marketing and sales services for corporates, and integrated solutions for educational institutions. This growth and diversification have been driven by a team of highly qualified professionals, including alumni from prestigious institutions such as IIT and IIM, who share a commitment to excellence.

Over its twenty-eight-year journey, CL Educate has transformed into a nationwide conglomerate. The company has successfully adopted an asset-light, technology-enabled model, effectively leveraging synergies across its diverse business segments.

KEY STRENGTHS

Asset Light & Technology Driven

Long-term Customer Relations

Strong Brand Equity: Legacy of 28 Years

High Standards of Corporate Governance

Quick Adaptation to Changing Environment

Professional & Qualified (IIM/IIT) Entrepreneurial Management Team

Global Presence:

11 Countries, 3 Continents

Highly Skilled In-house Content Development Team

Consumer Centric: Develop & Deliver Products as per the Needs of the Consumer

ENVIRONMENT

Edtech segment

Test Preparation & Coaching

The Indian test preparation market is a dynamic and competitive Landscape, offering a wide range of courses and services tailored to various segments. The market size is substantial, with an anticipated growth of $9.20 Bn by 2027. This growth is fueled by the rising demand for specialized preparation resources and platforms.

The test preparation market can be segmented based on the mode of delivery into online and offline categories. The online test preparation segment is projected to grow at a CAGR of 42.3% during this period, driven by the increasing adoption of digital solutions and the expanding internet penetration in Tier-2 and Tier-3 cities.

The Market

Based on type of course and the audience to which the exam caters, the Indian test preparation market can be further classified into:

•Foundation Programs

•Undergraduate Entrance Exam Preparation

•Postgraduate Entrance Exam Preparation

•International Exam Preparation

•Job-based Entrance Exam Preparation

Foundation Programs

These programs are designed to help students build a solid foundation for their intermediate studies and prepare them for competitive exams. Serving as a precursor to undergraduate entrance examinations such as JEE and NEET, these foundation programs cover academic classes VI to X. They are meticulously crafted to ensure a smooth transition from class X to classes XI and XII, which are crucial years for students aspiring to pursue undergraduate programs post-class XII. The foundation programs market is expected to witness robust growth in the coming years, with a projected CAGR of 15% from 2024 to 2028. The growing adoption of digital platforms for Board exam preparation, combined with the traditional offline coaching centers, is expected to further expand this market segment. The emphasis on a strong academic foundation to succeed in competitive exams also bolsters the demand for these programs, ensuring sustained growth and development in the foundation programs market.

The undergraduate entrance exam preparation segment is crucial, encompassing various competitive exams across different fields. This includes entrance exams for Law (CLAT, AILET), Medical (NEET), Engineering (JEE), various other universities (CUET), IPMAT (IPM - IIM Program) etc.

Law: Law entrance exams in India are aptitude-based examinations designed for students aspiring to pursue legal education. These exams serve as gateways to prestigious law schools and universities, offering undergraduate and postgraduate programs in law. The most prominent law entrance exams in India include - Common Law Admission Test (CLAT) and All India Law Entrance Test (AILET). CLAT is a national-level entrance exam conducted by the Consortium of National Law Universities (NLUs) for admissions to undergraduate (LLB) and postgraduate (LLM) law programs in 26 NLUs and other participating institutions. AILET is conducted by the National Law University, Delhi (NLU Delhi), exclusively for admissions to its undergraduate (BA LLB) and postgraduate (LLM) law programs. While the number of registrations in CLAT 2024 stood over 1 Lac students for both Postgraduate & Undergraduate levels, nearly 18,000 students registered for AILET 2024.

Apart from the 26 NLUs which accept CLAT scores, 61 non-NLU affiliate universities will also use CLAT 2024 scores for admissions to five-year integrated UG and PG law programmes commencing in the Academic Year 2024-2025.

Apart from CLAT & AILET, Law School Admission Test (LSAT - India) conducted by Law School Admission Council is another examination which is fast gaining in popularity.

JEE (Joint Entrance Examination): Undergraduate engineering examinations are knowledge-based tests for students seeking admission to engineering colleges in the country. These exams are highly competitive and are key to securing seats in prestigious engineering colleges. The most prominent undergraduate engineering entrance exams in India include - JEE (Main) & JEE (Advanced). JEE Main is conducted by the National Testing Agency (NTA) for admission to undergraduate engineering programs (B.E./B.Tech) at Indian Institutes of Information Technology (IIITs), National Institutes of Technology (NITs) and other centrally funded technical institutions (CFTIs). It also serves as a qualifying exam for JEE Advanced. Nearly 12.30 Lacs students registered for JEE Main held in 2024. Of which nearly 1.90 Lac student qualified for JEE Advanced.

NEET (National Eligibility cum Entrance Test): Like JEE, NEET is also a knowledge-based entrance examination conducted by the National Testing Agency (NTA) for admission to undergraduate medical programs (MBBS/BDS) in medical and dental colleges across India. With over 24 Lac registrations, NEET is one of the biggest examinations conducted in India.

IPM/BBA/Hotel Management: The Integrated Program in Management Aptitude Test (IPMAT) is a national-level entrance exam conducted for admission to the five-year Integrated Program in Management (IPM) offered by prestigious Indian Institutes of Management (IIMs). Nearly 15,000 students register for the IPMAT exam annually. While it is primarily conducted by IIM Indore and IIM Rohtak, the scores are also accepted by a range of renowned institutions such as IIM Bodh Gaya, IIM Ranchi, NIRMA University, NALSAR University, IIFT Kakinada, TAPMI Manipal, and TAPMI Bangalore. This segment is one of the fastest-growing areas within test preparation, with an increasing number of colleges now recognizing and accepting the IPMAT score.

Popular entrance examinations for admission to Bachelor of Business Administration (BBA) programs include the CUET (Common University Entrance Test), NPAT (NMIMS Programs After Twelfth), SET (Symbiosis Entrance Test), and the Christ University Entrance Test.

For Hotel Management programs, key entrance exams include the NCHM JEE (National Council for Hotel Management Joint Entrance Examination), IIHM eCHAT (International Institute of Hotel Management Electronic Common Hospitality Admission Test), AIMA UGAT (Undergraduate Aptitude Test), and the IHM Aurangabad Entrance Exam.

Post-Graduate Entrance Exam Preparation

Post-Graduate entrance examinations in India are critical for students aspiring to pursue advanced degrees in various fields such as engineering, management, medicine, law, and other specialized disciplines. These exams are designed to assess the knowledge, skills, and aptitude of candidates, ensuring they meet the rigorous academic and professional standards required for postgraduate studies.

CUET (Common University Entrance Test): The Common University Entrance Test (CUET) is a national-level entrance exam in India designed to streamline the admission process for undergraduate programs across various central universities and other participating institutions. Conducted by NTA, it facilitates admission to 46 central universities, 40 state universities, 29 deemed universities, 156 private universities & 10 government institutions. With nearly ~13.47 Lac registrations for CUET UG and ~4.62 Lac registrations for CUET PG for the 2024 edition, CUET is destined to become the biggest examination in the country. With ongoing talks to bring NEET & JEE also under the umbrella of CUET, the exam is expected to cater to more than 60 Lac students in next 5-7 years.

MBA (Master of Business Administration): MBA entrance exams in India are pivotal for students aspiring to pursue a Master of Business Administration (MBA) or equivalent management degrees. These exams are designed to assess the aptitude & analytical skills of candidates, facilitating admission to prestigious business schools across the country including the likes of IIM, XLRI, MDI and so on. CAT (Common Admission Test), XAT (Xavier Aptitude Test), SNAP (Symbiosis National Aptitude Test), NMAT (NMIMS Management Aptitude Test), MAT (Management Aptitude Test) are some of the well-known entrance exams which serve as a gateway into various institutes. The number of candidates appearing for CAT saw a massive increase by 30% to 3.3 Lacs in 2023 and around 1.35 Lac students appeared for XAT in 2024.

GATE (Graduate Aptitude Test in Engineering): The Graduate Aptitude Test in Engineering (GATE) is a prestigious national-level examination conducted by the Indian Institute of Technology (IIT) and the Indian Institute of Science (IISc) for admission to various postgraduate programs in engineering, technology, and architecture. GATE scores are also used by several Indian public sector undertakings for recruiting graduate engineers in entry-level positions. The number of candidates appearing for GATE increased to 8.26 Lacs in the 2024 edition as compared to 6.70 Lac candidates in the 2023 edition.

As of 2023, nearly 13 Lac students are studying outside of the country, with Andhra Pradesh /Telangana, Punjab, Maharashtra as leading Indian states for outgoing students. This number is expected to increase manifold in the upcoming years. In 2019, Indian students spent an estimated $37 Bn on education abroad. This expenditure experienced a 9% surge in 2022, reaching a substantial $47 Bn. If the sector continues to grow at the current rate of 14%, the projected spending by Indian students on overseas education is expected to skyrocket to an astounding $70 Bn by the year 2025. Some of the

key examinations include - GRE, GMAT, SAT, IELTS, TOEFL etc. In 2023, the number of students pursuing higher education rose by 35% compared to the previous year. Approximately 70% of these students were postgraduates seeking advanced research opportunities and international exposure in their fields, while the remaining 30% were undergraduates beginning their global academic journeys. Each year, the growing number of Indian students studying abroad is building a strong academic legacy, resonating throughout international education.

Several factors contribute to migration of Indian students to other countries:

•Quality of Education: Students seek world-class education and exposure to diverse academic environments that offer advanced curriculum, research opportunities, and access to state-of-the-art facilities.

•Better Career Opportunities: International degrees often enhance employability and career prospects, with global firms valuing the diverse skill sets and experiences gained abroad.

•Cultural Exposure and Personal Growth: Studying abroad allows students to experience new cultures, languages, and lifestyles, fostering personal growth, independence, and a global perspective.

•Specialized Programs: Many students pursue niche programs or courses that may not be available or as developed in India, allowing them to specialize in their areas of interest.

•Global Networking: Building a global network of peers, mentors, and professionals is a significant advantage, offering long-term benefits in terms of career and personal connections.

The United States was the top choice for Indian students due to its innovative teaching methods and prestigious institutions. UK followed, known for its blend of tradition and modernity in education. Australia and Canada were also popular, attracting students with their multicultural societies and high standards of living. Lastly, Germany and the Netherlands saw a notable influx of Indian students thanks to their forward-thinking programs and affordability.

The job-based entrance exam preparation market in India is a dynamic and competitive sector focused on preparing candidates for various government and private sector job entrance exams. As per various reports, the recruitment & promotion exams market size is estimated between Rs.1,600 Cr and Rs.1,650 Cr at present and is expected to grow at a CAGR of 10-11% over the next 5 years. The market caters to a wide range of entrance exams, including those conducted by the Union Public Service Commission (UPSC) for civil services, Staff Selection Commission (SSC) for various government jobs, Banking exams like IBPS PO/Clerk, Railway exams, State Public Service Commission exams, and exams for positions in sectors like defence, education, and healthcare.This segment has huge growth potential given that there is increased

focus on hirings in the public sector with almost 10 Lac posts to be filled. For example, Railway Recruitment Board (RRB) & Railway Recruitment Cells (RRC) exams are some of the sought-after exams announced by the Indian Railways. The governments focus on infrastructure development and modernization of the Indian Railways is expected to drive further growth in RRB recruitment in the coming years. RRB & RRC conduct different exams for different posts such as RRB - JE (Junior Engineer), RRB - NTPC (Non-Technical Popular Category), RRB - Group D, RRB - ALP (Assistant Loco Pilot) etc. The exact number of vacancies varies with each notification but generally ranges from thousands to tens of thousands across various regions and categories.

MarTech segment

For CL Educate Limited, the MarTech segment mainly involves - experiential marketing, physical & virtual events, digital & social media marketing along with Meta-Commerce.

Technology integration, particularly the rise of virtual and hybrid events, has significantly boosted the growth of the corporate event industry. The ability to host events online expands reach and engagement, meeting the demands of a globalized business landscape.

Post Covid, now that the world has returned to normalcy, physical events have returned in full swing. For those companies, looking to be cost effective, hybrid events have emerged as the best option to reach out to their audiences, gather information and opinions about their products. The hybrid event revolution signifies a growing trend in the event management market where events are designed to combine both physical (in-person) and virtual (online) elements. This trend has gained significant momentum in recent years and is closely related to the market dynamics of the event management industry, driving increased demand for event management services. The advent of digital technology and the impact of the pandemic accelerated the adoption of virtual events. Many organizations realized the benefits of reaching a broader and more diverse audience by incorporating virtual components into their events. This led to the evolution of the traditional in-person event model into a hybrid approach, where attendees can choose to participate in-person or virtually, or a combination of both.

The Meta-commerce industry in India, though in its nascent stage, is rapidly gaining momentum as businesses and consumers alike explore the potential of virtual and augmented reality (VR/AR) in commerce. Meta commerce refers to the buying and selling of goods and services within the metaverse—a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space.

BUSINESS

SEGMENTS

Established in 1996 as a single center with a single product, the company has embarked on a remarkable 28-year journey of growth and diversification. Through both organic and inorganic strategies, we have successfully adapted to ever-changing market dynamics and consumer needs.

Organic Growth: We have launched numerous products and business lines to stay ahead of market trends. Key milestones include:

•Student Mobility Business (2008): Expanding into new sectors with the Media Division.

•MarTech Business Expansion (2016-2023): Establishing operations in Singapore, USA, and Indonesia.

•International Student Mobility Business (2022): Further diversifying our offerings to meet global demand.

•CUET (2022): Developing and launching various test preparation products related to the newly launched Common University Entrance Test (CUET).

Inorganic Growth:Our strategic acquisitions have significantly bolstered our capabilities and market presence. Notable acquisitions include:

•Law School Tutorials (2003)

•Kestone (MarTech Business - 2008)

•GK Publications (2011)

•ICE GATE (2017)

•361 Degree Minds (2024)

These acquisitions have augmented our current offerings and strengthened our market position.

Our product offerings across various verticals can be primarily classified into 2 major segments:

a)EdTech

b)MarTech

EdTech Segment

The EdTech segment comprises the following verticals:

•Test Preparation & Coaching

•Publishing & Content Monetization

•Student Mobility & Platform Monetization

Test Preparation & Coaching

CL Educate, through its Career Launcher brand, delivers a comprehensive suite of test preparation products via digital and business partner channels. These offerings encompass:

Aptitude Products: Preparation for entrance exams such as CAT, XAT, SNAP, CLAT, AILET etc.

Knowledge Products: Preparation for entrance exams like JEE, NEET, GATE, and CUET.

International Education Products: Preparation for international exams such as GRE, GMAT, SAT, TOEFL, and IELTS.

This diversified portfolio addresses a wide spectrum of educational needs, catering to both domestic and international exam aspirants.

Publishing & Content Monetization

As part of its content monetization strategy, CL Educate, through its brand GK Publications, offers a diverse range of titles categorized as follows:

Technical Titles: Includes preparation material for exams such as GATE and for technical vacancies in government jobs.

Non-Technical Titles: Covers material for exams like CAT, Bank/SSC examinations, Civil Services examination, and CUET.

School Titles: Provides resources for students preparing for their Board exams.

In addition to these categories, CL Educate also engages in B2B content publishing on demand for other institutions, including prominent online EdTech companies. This segment operates with minimal inventory, enhanced collections and business efficiency, which in turn results in improved profit margins.

Student Mobility & Platform Monetization

Under its Platform Monetization and Student Mobility segment, CL Educate provides a comprehensive array of services and products, including:

•Integrated Solutions for educational institutions and universities across India.

•Student Recruitment Services.

•Marketing and Student Outreach Services.

Operating under the brand CL Media, this institutional business arm offers digital marketing, print solutions, events, and student outreach services to higher education institutions and universities nationwide. With over 400 institutional partners, CL Media has successfully enrolled more than 100,000 students through its annual outreach initiatives, including student fairs, seminars, workshops, and brand-building activities.

As a part of its forward integration strategy, the company has also launched a Common Application Form Zone or the Discounted Form Zone wherein the aspiring applicants can apply for multiple colleges and universities through a common form, thereby saving thousands of rupees.

Advantages of the Discounted Form Zone:

Exclusive Discounts on Applications for Students

Easy to Apply

Centralized Application Tracking

How it WorksRs.

Explore List of B Schools

Get the Offer Applicability Status, Post Selection of Institute Seal the Deal, Pay the Application Fee

Upload the Payment Acknowledgment on the Discounted form Zone

Grab your Discount

Expansion and Services

These services have also been extended to international universities, specifically targeting Indian students. The Student Mobility segmer complements Career Launchers core test-prep business by offering preparation for international examinations. Additionally, it provide value-added services to students going abroad, including document verification, visa assistance, and housing services, through a networ of domestic and international partners.

Student Mobility Services

Admission Consulting

•Counselling & Support

•Guidance & Review for SOPs, essays, and college selection

•Interview Preparation

Exam Preparation

•IELTS / TOEFL

•GMAT

•GRE

•SAT

Visa Consulting

•Interview Preparation

•Verification of Funds

•Online Application

& Docket Preparation

Value-Added Services

•Accommodation

•Health Insurance

•FOREX Services

•Travel Insurance

•Education Loans

Through these comprehensive offerings, CL Educate ensures that students receive holistic support throughout their educational journey, both domestically and internationally.

Under the brand name Kestone, the company provides a suite of

services to corporates in the MarTech segment, including:

•Experiential Marketing & Event Management Solutions

•Digital & MarComm Services

•Customized Engagement Programs (CEP)

•Transitioning Businesses into the Metaverse

•Strategic Business Solutions

Experiential Marketing and Event Management

•Product Launches: Providing unique platforms for clients to showcase products and effectively enter the market.

•Dealer Meets / Sales Conferences / Seminars: Designing and executing inspiring events with over 20 years of expertise.

•Exhibitions: Creating dynamic marketing events, from conference networking hubs to standalone trade fair.

•MICE (Meetings, Incentives, Conferences, Exhibitions): Strategically planned and beautifully executed events to build relationships, motivate, and inspire.

Demand Generation Digital & Marketing

Communication (MarComm) Services

•Web Design & Development: Creating websites that convert visitors into customers and ensure engaging user experiences (UX).

•Content Marketing: Crafting brand-aligned content that is relevant and shareable across print, online, and social media.

•Social Media Marketing: Combining traditional marketing, search marketing, and social media to enhance brand presence, drive website traffic, and improve SEO rankings.

•Email Marketing: Implementing a results-driven approach to messaging, CTAs, lead capture, and conversion metrics.

•Digital Advertising & Media Buying: Ensuring the best ROI in social advertising through strategic planning, quality ad creatives, and campaign optimization.

Customized Engagement Programs (CEPs)

•Loyalty Programs: Designing and managing loyalty programs for customer retention and service validation.

•Rewards Programs: Creating effective rewards programs for frequent customers to enhance brand loyalty.

•Audience Generation and Management: Defining and generating the optimal audience for business plans and live events.

•Pipeline Management: Developing systematic and visual approaches for selling products and services to target audiences, maximizing ROI.

•Lead Generation Activities: Initiating lead-generation activities to attract potential leads and customer interest.

Virtual Events and Transitioning Business into the Metaverse

•Metaverse Transition: Transforming 2D digital stores into 3D metaverse-enabled stores, enhancing customer experiences through blockchain technology.

These services, offered by Kestone, are designed to help corporates optimize their marketing efforts, engage effectively with their target audience, and achieve strategic growth.

OPERATIONAL

HIGHLIGHTS

EdTech Highlights

•Under the brand Career Launcher, the company serviced approximately half a Mn test preparation consumers (Paid & Unpaid) in FY24. Total Gross Market Value of the products sold stood at Rs.28,417 Lacs in FY24 as compared to Rs.26,669 Lacs in FY23 .

•MBA & Law Prep continue to be the flagship product categories with the groups contributing nearly 67% of the topline of the test preparation business. Upcoming products such as IPM/ BBA & CUET are performing strongly with both contributing nearly Rs.1,750 Lacs to the topline.

•UG segment consists of Law, CUET, JEE, NEET, Tuitions & IPM/ BBA courses. Together they contribute nearly 59% of the total test preparation business while PG segment contributed 38%. International Education & Study abroad segment while still in nascent stage contributed 3% of the remaining business.

The International Education vertical saw the opening of dedicated centers in India as well as abroad. The company ramped up the operation of its company operated centers in 2024 while also opening centers in Dhaka (Bangladesh), Lagos (Nigeria), Kathmandu (Nepal), Nairobi (Kenya) and Accra (Ghana).The company is looking to sign up more business partners in several other South-East Asian countries. Keeping in view the international markets, the company has opened a new subsidiary - CL Singapore Hub Pte Ltd based out of Singapore which will cater to all the international EdTech business.

Result Highlights

CL students continue to outperform at the highest levels.

They have achieved highest honours in UG as well PG segment.

Brief highlights of the same are as given below:

The MarTech International segment saw a 34% increase in its topline to Rs.3,263 Lacs in FY24 from Rs.2,434 Lacs in FY23. This was achieved on the back of an increase in number of international clients particularly in Indonesia and the US. The India segment saw muted growth in its topline due to marketing spend constraints by the IT & FMCG sectors. However, the company was quick to react to this slowdown and mitigated the effect by adding new clients in other sectors such as the financial services sector.

The company is consistently investing in enhancing its proprietary Metaverse platform, VOSMOS, by developing and adding new features. Concurrently, it is making significant progress with its Meta-Commerce product. Given the promising outlook of the Meta-Commerce market, these investments are anticipated to yield substantial returns in the coming year. The company will continue to pursue higher margin clients in India and make further inroads in the international market.

STAKEHOLDER VALUE CREATION

Return of Surplus funds to the shareholders:

Buyback 2.0

Similar to last year the Board of Directors of the company in its meeting held on August 02, 2023 approved the buyback of fully paid-up equity shares of face value of Rs. 5/- each from its shareholders/beneficial owners (other than those who are promoters, members of the promoter group or persons in control) from the open market through stock exchange mechanism for an aggregate amount not exceeding Rs. 1,500 Lacs (Indian Rupees One Thousand Five Hundred Lacs only).

While the company had approved Rs. 1,500 Lac worth of buyback of shares from the open market, the company was not able to complete the same. The buyback was mainly impacted by the new rules & regulations introduced by SEBI particularly for open market buybacks.

These new rules and regulations include:

•Create a separate window on stock exchanges to undertake buy-back.

•The company shall not purchase more than 25% of the average daily trading volume (in value) of its shares or other specified securities in the ten trading days preceding the day on which such purchases are made.

•The company shall not place bids in the pre-open market, first thirty minutes and the last thirty minutes of the regular trading session.

•The companys purchase order price should be within the range of (+/-) 1% from the last traded price.

Acquisition of ThreeSixtyOne Degree Minds Consulting Pvt Ltd.

ThreeSixtyOne Degree Minds Consulting Pvt Ltd (‘361DM) is an Online Program Management (OPM) company. OPM enables universities to offer educational programs through online, digital learning thereby becoming their digital twin. The global market size of the OPM industry is quickly growing from $4.2 Bn in 2022 and is expected to reach $11.5 Bn in 2030.

361DM was already an associate of CL Educate Limited, with the parent company holding around 11.72% equity shares of the company. CL Educate further increased its holding in 361DM by subscribing to additional shares via Rights Issue and the ongoing process of divesting its holding in its subsidiary - ICE GATE Educational Institute Pvt Ltd to 361DM.

Synergies & Rationale for Acquisition

Complementary business to CL

•Add new growth markets for us.

•Enable us to reach newer and larger audiences.

Larger chunk of the customers wallet

•Create opportunities in cross selling and upselling to common audiences.

Synergies with existing business

Platform Monetization - Work with 400+ partner universities.

•Will give 361DM easy access to above universities.

•Similar to Platform Monetization clients conversations happen mostly at Owner / Director level.

•International partnerships like SP Jain - Dubai etc. can also be explored.

Supply side growth in universities/programs offered should be very manageable.

FINANCIAL HIGHLIGHTS

			(Rs. In Lacs)
	FY23	FY24	% Change
Revenue from Operations	29,131	31,855	9%
Total Income	29,771	33,241	12%
Operational Expenses	26,564	29,452	11%
Total Expenses	27,841	31,080	12%
EBITDA	3,208	3,789	18%
Profit Before Tax	1,931	2,161	12%
Taxes	(379)	602	-
Net Profit After Tax	2,253	1,581	-30%
Net Profit After Tax (Adjusted for One-Time Benefits)	1,394	1,560	12%

Revenue from Operations

The revenue from operations increased by 9% to Rs. 31,855 Lacs in FY24 as compared to Rs. 29,131 Lacs in FY23. The following reasons can be attributed to the increase:

EdTech segment revenue increased by 13% to Rs. 19,951 Lacs in

FY24 from Rs. 17,596 Lacs in FY23

•The segment saw an increase in all its verticals -

•Test Preparation Segment grew by 12% on the back of increase in number of paid enrolments.

•Publishing & Content Monetization segment grew by 19% on the back of increase in number of books sold and decrease in sales return.

•Platform Monetization & Student Mobility segment grew by 35% on the back of new client acquisition and increase in average ticket size per client.

MarTech segment saw an increase in revenue by 3% to Rs. 11,904

Lacs in FY24 from Rs. 11,535 Lacs in FY23

•While growth in the Indian subcontinent was subdued due to marketing spend constraints in the IT and FMCG sectors, the international business experienced significant topline growth. The primary contributors to this increase were the subsidiaries in Indonesia and the US.

•To mitigate the impact of the slowdown in India, the company has onboarded several new clients in the financial services sector, which is expected to further bolster revenue going forward.

Segment wise revenue				(Rs. In Lacs)
Revenue	FY23	% Contribution	FY24	% Contribution
EdTech	17,596	60%	19,951	63%
MarTech	11,535	40%	11,904	37%
Total	29,131	100%	31,855	100%

Operating Expenses

Cost of Materials Consumed

The cost of materials consumed increased by 25% to Rs. 942 Lacs in FY24 from Rs. 753 Lacs in FY23. This increase was primarily driven by higher sales in the Test Preparation and Publishing Divisions. Although paper prices were initially high due to the Russia-Ukraine conflict, they decreased in the latter half of the year, allowing the company to benefit from the lower purchase price.

Employee Benefit Expenses

The employee benefit expenses have increased by 9% to Rs. 5,096 Lacs in FY24 from Rs. 4,656 Lacs in FY23. The company is investing in talent across various functions, particularly in business development, product development, technology, and marketing, to drive targeted revenue growth and capture market share in new business lines.

Service Delivery Expenses

The service delivery expenses increased by 7% to Rs. 17,132 Lacs in FY24 from Rs. 16,040 Lacs in FY23. This includes the revenue share returned to our business partners in the EdTech business, with franchise expenses increasing in proportion to our revenue. Faculty expenses for company-owned and digital business rose by 59% as the company hired and retained top talent to drive results and support new business lines.

In addition to franchise expenses, this also encompasses project service costs related to the MarTech business for servicing various events. These expenses decreased by 4% due to improved cost efficiencies in the MarTech segment.

Sales & Marketing Expenses

The sales & marketing expenses increased by 16% to Rs. 2,433 Lacs in FY24 from Rs. 2,103 Lacs in FY23. The company is continuing its expansion into new business lines and is acquiring new clients in the platform monetization & the MarTech business.

Other Expenses

Other expenses increased by 41% to Rs. 3,876 Lacs in FY24 from Rs. 2,741 Lacs in FY23. These expenses include a non-cash component in the form of bad debts, where the company has prudently written off the entire receivable balance related to its discontinued vocational business amounting to Rs. 214.76 Lacs. Despite this, efforts to recover the outstanding amounts from the relevant authorities are ongoing. Additionally, office and center running expenses increased by 18% to Rs. 740 Lacs in FY24 from Rs. 627 Lacs in FY23 as the company made its way out of the pandemic and all employees returned to offices nationwide.

Non-Operating Expenses

Finance Costs

On a net debt basis, the company remains debt-free, though it maintains certain overdraft and cash credit facilities for liquidity during off-peak months. The finance costs have increased by 53%, primarily due to a 110% rise in interest expenses on financial lease liabilities, an adjustment in accordance with IND AS 116. The expenses recorded increased to Rs. 113 Lacs in FY24 from Rs. 54 Lacs in FY23.

Depreciation & Amortization

The depreciation & amortization expenses have increased by 24% to Rs. 1,383 Lacs in FY24 from Rs. 1,117 Lacs in FY23. The company is investing in product and technology development to create intangible assets, esp. content for the EdTech segment, and meta-commerce and VOSMOS for the MarTech segment. These development costs are capitalized, reflecting their potential to generate future revenues and cash flows. The company remains committed to investing in the development of such assets, which are expected to drive and sustain future revenue growth.

Exceptional Items

On the account of obtaining management control in 361DM in lieu of being the major shareholder of the company and certain one-time write-offs taken in one of our subsidiaries, the company has recorded a one-time exceptional gain of Rs. 135 Lacs in FY24.

Balance Sheet Highlights

Cash & Cash Equivalents (Along with Bank Balances & Long-term Fixed Deposits)

Despite doing a buyback of Rs. 1,064 Lacs (including buyback taxes & related expenses), the company on a gross level has improved its total cash position to Rs. 11,533 Lacs in FY24 from Rs. 10,935 Lacs in FY23. The company is generating healthy cash from operations which stood at Rs. 2,557 Lacs in FY24 as compared to Rs. 2,331 Lacs in FY23.

Non-Current & Current Borrowings:

Although the company remains net debt-free, it utilizes certain overdraft and cash credit facilities to effectively manage day-to-day operations. These facilities are primarily allocated to the MarTech segment, which is relatively capital-intensive and requires upfront expenses for executing event-related projects. The borrowings were also elevated due to the addition of borrowings of Rs. 220 Lacs on account of consolidation of now subsidiary - 361DM which was earlier an associate. The company recorded a year-end balance of total borrowings of Rs. 2,108 Lacs in FY24 as compared to Rs.1,046 Lacs in FY23.

KEY RATIOS

The company had a healthy growth in its topline and its EBITDA figures. While in FY23, the company did receive certain tax one-time reversals, however the same reverted to normalcy in FY24. Adjusted for one-time tax reversals, the companys profit increased by 12% to Rs. 1,560 Lacs in FY24 from Rs. 1,394 Lacs in FY23.

The company has seen positive movement in terms of current & debtor turnover ratio due to better collection cycle in various verticals of business resulting in lower debtors at the end of the year despite a 10% increase in revenue as compared to last year. The inventory turnover ratio remains at similar levels as last year showing continued focus on being inventory light and printing only the requisite inventory. While the revenue has grown by almost 10%, the operating margin has remained flat. This is mainly due to expenses done by the company in People, Product & Technology into its new lines of business. The company is confident that these investments will payoff in the upcoming year. The capital being deployed by the company continues to show positive returns with RoCE moving to 8% for FY24 from 7.3% in FY23.

While last year saw a one-time benefit of tax reversal, however on an adjusted basis, the company has marginally improved its net profit margin and Return on Equity.

STRATEGY & ROAD MAP

Opportunities and Threats

Opportunities

Undergraduate Test Preparation Segment

While the UG segment contributes to nearly 60% of the companys topline, CL Educate sees a huge potential which is yet to be uncovered. At present, the UG segment consists of entrance exam preparation for Law, IPM/BBA/HM, CUET & JEE/Medical courses. Although the segment of Law (UG) has seen a slight downward trend, IPM/BBA has emerged as the rising star for the company. With increasing number of universities accepting the IPMAT exam and more and more colleges offering the 5-year integrated courses, this is one of the fastest-growing verticals for the company.

In addition to IPM-related exams, CUET remains a key area of focus for the company. Positioned as one of the largest exams in the country, the third edition garnered a total of 14 Lac registrations. The company has witnessed a 47% increase in enrolment numbers compared to the previous year and is committed to further investing in personnel, product development, and technology within this domain.

Furthermore, despite a slight decrease in Law enrollments attributed to the shift in the exam cycle from May to December, the central governments initiative to conduct biannual Board examinations is anticipated to support students in preparing for both Board exams and law entrance exams concurrently. This strategic move is expected to bolster demand for express or crash courses, which typically span 3-4 months and offer high profit margins.

International Student Mobility & Test Preparation Expansion

Anticipating a global market of nearly six million students studying abroad, this segment presents a strategic opportunity for the company to expand its market share. While the current landscape is highly competitive with numerous national and international players, few providers offer a comprehensive suite of services including admission counselling, test preparation (GRE, GMAT, SAT, IELTS, etc.), admission consulting, education loan assistance, and visa guidance.

The company aims to distinguish itself by filling this service gap and establishing a strong reputation as a provider of end-to-end solutions in the study abroad market. A key advantage for the company lies in its 28-year legacy of prioritizing student career guidance, both in India and internationally. This customer-centric approach enables the company to differentiate itself from traditional ‘educational consultants who often focus more on immigration than educational outcomes.

To strengthen its foothold in this market, the company has initiated the establishment of dedicated study abroad centers across various regions of India. These centers cater to aspiring students planning to pursue education overseas and are expanding rapidly. Additionally, the company has also started building its network and establishing partnership across various countries such as Bangladesh, Kenya, Ghana, Nigeria and Nepal. The company is actively looking to increase its reach further in the South-East Asian regions. The company is working with various strategic partners in the US, UK and Australia to enhance its university outreach and student mobility business.

International Expansion - MarTech Segment & Rise of Meta-Commerce

With the resurgence of physical events and the emergence of hybrid events, the MarTech International segment experienced significant revenue growth. Leveraging synergies with its Indian counterpart, this segment achieved enhanced cost optimization, resulting in improved margins overseas.

The substantial contributions from Indonesia and the US bolstered both the segments revenue and margins. Meanwhile, amidst a slowdown in the Indian IT and FMCG sectors, international expansion emerges as the optimal strategy to broaden global presence, acquire new clients, and further enhance margins. The company is looking to make further inroads in the US, Middle East, Indonesia and Singapore markets.

Threats

Unauthorized Reproduction, sale & distribution of Copyrighted Material (Piracy)

Piracy poses a significant threat to the publishing sector in India, impacting both physical books and digital content.

Impact on Publishers

•Revenue Loss: Piracy results in direct revenue loss for publishers as sales are diverted to unauthorized copies. Publishers lose potential earnings from legitimate sales.

•Market Distortion: The presence of pirated copies distorts market dynamics, affecting pricing strategies and market demand. Legitimate publishers find it challenging to compete with lower-priced pirated copies.

•Brand Reputation: Pirated copies often compromise the quality and integrity associated with a publishers brand. Readers may receive poor-quality editions, affecting their perception of the publishers offerings.

Downfall of the Unicorns

The emergence of unicorns was initially perceived as a disruptive force in the sector, but their subsequent decline has evoked a sense of apprehension among consumers, shareholders, and investors alike. Before the onset of the funding slowdown, unicorns heavily utilized investor capital to expand their workforce, technology capabilities, and market presence. While these investments initially garnered attention, their subsequent downturn has tarnished the reputation of the EdTech sector in the eyes of the investor. As a result, even companies demonstrating strong governance practices are encountering challenges in accurately valuing their enterprises.

Slowdown in the US & European Economy - Impact on MarTech Segment

The slowdown in the US and European economies can have significant impacts on the event management industry globally. Here are some key effects:

•Reduction in Corporate Spending: Many events, especially large conferences and corporate gatherings, rely on corporate budgets. A slowdown in the US and Europe typically leads to reduced spending by companies on events. This can result in fewer events being organized, smaller budgets for existing events, or even cancellations.

•Impact on Sponsorships and Partnerships: Many events depend on sponsorships from companies based in the US and Europe. A slowdown in these economies can lead to reduced sponsorship budgets or a delay in committing to sponsorships. This affects the financial viability of events and their ability to secure necessary funding.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

As a diversifed enterprise, CL Educate continues to prioritize a systematic approach to managing business risks.

Risk management is integrated into the corporate strategy, which focuses on developing a portfolio of high-caliber businesses aligned with organizational capabilities and market opportunities. This strategy emphasizes distributed leadership, succession planning, skill enhancement, and organizational capability building through timely developmental interventions. Risk management has always been an integral component of the companys organizational strategy, spanning planning, execution, and reporting processes.

The companys internal control framework is tailored to its nature, size, and operational complexities. The Audit Committee and CFO actively oversee risk-control mechanisms and recommend enhancements as needed. Business heads and the CFO regularly receive updates on Internal Audit findings and take corrective actions as necessary.

Risk Management Framework

The company maintains a robust risk-management system structured as follows:

• Risk Identification: Risks are identified and assessed against predefined criteria, considering both external and internal factors. The risk-management policy, framework, and guidance provide direction on managing risks, including assessing probability, impact, and translating these into overall risk levels.

•Assessment: A comprehensive risk-assessment process involves discussions with leadership, senior management, and key stakeholders from each business area. Each identified risk is rated, and action plans are evaluated for addressing control gaps, both for new and existing risks. Ongoing horizon scanning helps identify emerging risks throughout the year.

•Treatment & Mitigation: Based on the risk assessment, appropriate actions are determined. These actions may involve avoidance (deciding not to pursue a certain course of action), mitigation or contingency planning to reduce the probability or impact of risks, accepting increased risk to seize opportunities, or sharing risks with other parties.

•Monitoring and Review: The Board, Audit Committee, and Risk Management Committee meet periodically to review and validate the Enterprise Risk Management (ERM) process and key risks. Discussions focus on identified risks, finalized mitigation plans, risk ownership, and progress monitoring.

EDTECH SEGMENT

Types of Risk	Risk Faced	Mitigation Approach
Operational Risk	Revenue concentration within a particular business segment and consequent failure to maintain, grow, and scale these revenues	The company operates in two reportable segments, EdTech and MarTech, serving various sub-segments across multiple regions to diversify revenue streams. It is also rapidly expanding geographically by establishing offices in the USA, Mauritius and the Middle East, aiming to acquire new clients and mitigate the risk of revenue concentration from a few clients or specific regions.
Business Risk	Seasonality of products/ services along with changes in exam patterns or change in number of exams being conducted	The company offers a diverse range of products within its segments to mitigate the impact of seasonality throughout the year. Additionally, the company continually expands its product portfolio and adopts cutting-edge technology to maintain a competitive edge in efficiency and effectiveness.
Quality Control Risk	Ensuring consistent quality control in the Test Preparation division across all centers for service delivery	To mitigate quality control risks, the company implements strict measures for service delivery:
		• MyZone Platform: This platform keeps students updated on exam patterns, dates, and syllabi, offering centralized access to sectional and full-length tests as well as revision materials.
		• Centralized Sourcing of Materials: All study materials, including books and classroom exercise worksheets, are sourced centrally for consistency across all network and owned centers.
		• Teacher Training: Regular training is provided to faculty at both business partner and owned locations to ensure high teaching standards.
		• Academic Audits: Frequent audits of study centers are conducted to maintain academic quality.
		• 360-Degree Faculty Feedback: Comprehensive feedback mechanisms are in place to continually assess and improve faculty performance.
		These initiatives ensure high standards and consistency in the delivery of educational services across all centers.
Human Capital Risk	Failure to manage and retain key talent can impact the companys ability to deliver services effectively and maintain competitiveness	Maintaining industry-standard salaries and encouraging employees to take full ownership of business processes fosters a culture of leadership and trust within the team. To further enhance employee morale, the company has introduced various monetary and nonmonetary incentives, such as an ESOP scheme to retain key employees and monthly HR activities to improve team coordination and understanding..
Technology & Data Risk	Failure to protect sensitive data can result in data breaches, reputational damage, and financial losses	The company recognizes the risks related to cyber-attacks and has implemented regular cyber security checks to strengthen its network system against the same

MARTECH SEGMENT

Economic Risk	Economic instability in key markets can affect corporate spending on events and marketing, leading to revenue fluctuations	The company operates across diverse markets, encompassing India, USA, Singapore, Indonesia, and the Middle East, serving distinct customer segments.
		This strategy mitigates the risk of revenue concentration from a few customers or specific geographical regions.
		The company has added new clients across multiple sectors to reduce its dependence on any one customer/sector.
Technology Advancement Risk	Rapid changes in technology require continuous investment in new tools and platforms, which can be costly and resource intensive.	The company is advancing its Metaverse platform with state-of- the-art technology and has introduced a DIY (Do-It-Yourself) version. Significant investments in technology underscore its commitment to staying at the forefront of innovation and enhancing customer offerings.

Environmental, Social and

Governance (ESG) Vision

With a proud Legacy of 28 years, the organization deeply values its key stakeholders—customers, shareholders, and employees. Acknowledging the vital role each plays in shaping its success, the company is dedicated to creating exceptional value for both external and internal customers. Committed to excellence, the organization is mindful of its broader impact and has crafted its policy aligning with its internal Environmental, Social, and Governance (ESG) framework, to ensure a sustainable and impactful future for all stakeholders.

Environmental Goals

Digital Transformation

Emphasize the shift from physical to digital publications, reducing the dependency on printed materials, and encouraging e-learning solutions to minimize the carbon footprint.

Waste Management

Implement a waste reduction strategy that includes recycling and responsible disposal of printed materials. Encourage the return and recycling of outdated books and publications.

Green Event Management - Virtual Events

Enhance the VOSMOS platform to be energy-efficient, minimizing the carbon footprint associated with online events. Encourage clients to opt for virtual over physical events when possible.

Social Goals

Inclusive Marketing

Ensure that marketing campaigns are inclusive and represent diverse communities, avoiding stereotypes and promoting equality.

Diversity & Inclusion

Foster a diverse and inclusive workplace by implementing non-discriminatory hiring practices and ensuring equal opportunities for all employees, regardless of race, gender, age, or disability.

Training & Development

Provide ongoing training and career development opportunities for employees, particularly in emerging technologies like 3D web models and digital marketing.

Workplace Safety

Ensure a safe and healthy working environment for all employees, whether they are engaged in physical event management or digital operations.

Local Impact

Support local communities in the regions where CL Educate operates (India, USA, Singapore, Indonesia) through community-driven projects, and partnerships with local organizations.

Governance Goals

Board Diversity and Independence

•Establish a diverse board of directors with a mix of skills, experiences, and backgrounds.

•Ensure a majority of independent directors on the board. Transparency & Accountability:

Maintain transparency in all business dealings, ensuring that financial reporting, advertising practices, and contractual obligations are clear and honest.

Ethics & Compliance:

•Adhere to all relevant local and international laws and regulations in the regions where CL Educate operates, particularly concerning data privacy, labor laws, and environmental standards.

•Develop a comprehensive code of conduct applicable to all employees and partners.

•Conduct regular ethics training for all employees.

Third-Party Vendor Management:

Establish a rigorous vendor selection process to ensure that third-party partners, especially those involved in printing and event management, comply with ethical and environmental standards.

Stakeholders Engagement:

Regularly engage with stakeholders, including employees, customers, investors, and the communities served by CL Educate, to gather feedback and improve ESG practices.

Digital Platforms:

Ensure that the VOSMOS platform and other digital services adhere to the highest standards of data security and privacy, protecting the personal and financial information of all users.

Sustainable Innovation:

Invest in R&D to develop new, sustainable technologies and solutions, particularly in the areas of digital education, experiential marketing, and 3D web models.