Zee Learn Ltd Management Discussions

Economy review Indian economic overview

India has reinforced its position as one of the fastest-growing major economies globally. Real GDP is estimated to grow by approximately 7.7% in FY 2026, compared with 7.1% in the previous year, reflecting sustained economic momentum. Growth has been supported by resilient rural demand, healthy agricultural output and a gradual recovery in industrial activity. Government initiatives, including Production Linked Incentive (PLI) schemes, continue to support manufacturing, while the services sector remains a key contributor. Continued public investment in infrastructure has further strengthening overall economic expansion.

The Indian economy also benefited from improving macroeconomic stability during the year, supported by moderating inflation, healthy tax collections, rising credit growth and resilient banking sector fundamentals. Increasing urbanisation, improving disposable incomes and rising middle-class aspirations continued to support consumption across education, healthcare, lifestyle and technology- oriented sectors, thereby strengthening domestic demand conditions. Simultaneously, the Governments continued focus on infrastructure development, digitalisation, manufacturing expansion and human capital development further reinforced Indias long-term economic fundamentals.

In line with its long-term vision of building a knowledge-driven and future-ready economy, the Government continued to emphasize investments in education, skilling and digital infrastructure through the Union Budget 2026—27. Enhanced allocations towards educational infrastructure, technology-enabled learning and skill development initiatives are expected to support workforce productivity, innovation and employment generation over the medium to long term. Additionally, increasing internet penetration, expanding digital ecosystems and rising adoption of technology- led services are likely to create sustained opportunities across consumer-oriented and knowledge-based sectors.

Outlook

The Indian economy remains positive, with India expected to continue as one of the fastest-growing major economies globally. Real GDP growth for FY 2026—27 is projected at 6.6%, supported by resilient domestic demand, continued government capital

expenditure and gradual recovery in private consumption. Real Private Final Consumption Expenditure is also projected to witness healthy growth, reflecting improving consumer sentiment, rising disposable incomes and sustained demand across key sectors of the economy.

The Union Budget 2026—27 further reinforced the Governments infrastructure-led growth strategy through an increased capital expenditure outlay of H12.2 lakh crore. Continued investments across roads, railways, urban infrastructure and energy are expected to strengthen connectivity, logistics efficiency and overall economic activity. While geopolitical uncertainties, commodity price volatility and global economic slowdown may pose near-term challenges, Indias strong structural fundamentals, ongoing digital transformation and continued focus on human capital development are expected to support long-term sustainable growth.

Indian GDP Growth Trend

(in %)

P- Projected

Source: MoSPI Provisional Estimates FY2025-26,

RBI*

Indian education industry

The Indian education sector continues to undergo significant transformation, supported by policy reforms, increasing public expenditure, digital adoption and a stronger emphasis on foundational and skill-based learning. The Union Budget 2026— 27 allocated approximately HI.39 lakh crore to the Ministry of Education, marking one of the highest-ever allocations for the sector and reflecting the Governments continued focus on improving accessibility, quality and learning outcomes across the education ecosystem. Of the total allocation, around H83,562 crore has been earmarked for School Education and Literacy, while H55,727 crore has been allocated towards Higher Education.

India currently operates one of the worlds largest education systems, catering to over 24.69 crore students through an extensive institutional network supported by nearly 1.01 crores teachers. Enrolment levels across primary and upper primary education remain robust, with Gross Enrolment Ratio (GER) reaching 90.9% at the primary level and 90.3% at the upper primary level. Meanwhile, GER at the secondary and higher secondary stages stood at 78.7% and 58.4%, respectively, reflecting ongoing efforts towards achieving the National Education Policy (NEP) 2020 target of universal enrolment by 2030. In parallel, school dropout rates across primary, upper primary and secondary education levels have continued to decline, reflecting improved student retention, stronger educational accessibility and enhanced participation within the formal education system.

The sector is also witnessing accelerated adoption of technology- enabled learning models, digital infrastructure and competency- based education frameworks. Government-led initiatives such as PM eVIDYA, DIKSHA, Samagra Shiksha and PM-SHRI are strengthening digital learning access, teacher capability enhancement and modern classroom infrastructure across the country. In FY 2026— 27, budgetary allocation towards flagship programmes such as Samagra Shiksha, PM-POSHAN and PM-SHRI witnessed further increases, while new initiatives including Atal Tinkering Labs (ATL) are expected to strengthen innovation-led learning and STEM education. Additionally, increasing integration of artificial intelligence, vocational education and experiential learning methodologies is supporting the transition towards a more future- ready and outcome-driven education ecosystem.

The Indian education sector remains positive, driven by sustained policy support, rising investments in digital and academic infrastructure, favourable demographics and increasing demand for quality education. Continued implementation of NEP 2020, expansion of technology-enabled learning frameworks and stronger focus on foundational literacy, employability and skill development are expected to support long-term sectoral growth. Increasing penetration into Tier II and Tier III markets, rising private participation and enhanced focus on innovation-led education delivery models are likely to further strengthen the sectors growth trajectory over the coming years.

Expenditure and allocation to the Ministry of Education

Indias preschool industry

Indias pre-school and childcare industry is witnessing robust growth, supported by increasing urbanisation, rising participation of women in the workforce and growing awareness regarding the importance of early childhood education. The sector is gradually transitioning from an unorganised structure towards organised and branded preschool networks offering curriculum-based learning and integrated childcare solutions. The Indian pre-school and childcare market was valued at approximately USD 5.1 Billion in FY 2025 and is projected to reach nearly USD 12.0 Billion by FY2034, registering a CAGR of 9.16% during 2026—2034. The growing prevalence of dual-income households and nuclear families has significantly increased the demand for professional childcare and structured learning environments across urban India. In addition, increasing parental preference for experiential learning, cognitive skill development and activity-based education is further strengthening the growth trajectory of the industry.

The industry is also benefiting from strong policy support and structural reforms aimed at strengthening foundational learning in India. The National Education Policy (NEP) 2020 recognises three years of pre-school education (Balvatika) as part of the restructured 5+3+3+4 education framework, with the foundational stage covering children aged 3 to 8 years. The policy has significantly increased the focus on Early Childhood Care and Education (ECCE), encouraging organised preschool participation and curriculum standardisation. Further, the Government launched the three-month play-based Vidya Pravesh programme in July 2021 to improve school preparedness and facilitate smoother transition into Grade-I for children from diverse educational backgrounds, including Balvatika, Anganwadi Centres (AWCs) and private play schools. The organised private sector continues to dominate the industry with nearly 89.2% market share, while full-day care services account for around 64.5% of the overall market demand.

Looking ahead to FY 2025—26, the Indian preschool industry is expected to maintain a positive growth momentum driven by favourable demographics, policy-level emphasis on foundational education and rising awareness regarding structured child development. Increasing expansion into Tier II and Tier III cities, stronger franchise-led growth models and rising adoption of technology-enabled learning platforms are expected to support industry scalability and accessibility. Moreover, government initiatives promoting ECCE integration, school preparedness and institutional linkages are likely to further formalise the sector and create long-term opportunities for organised preschool operators across the country.

Indias K-12 industry

Indias K-12 education industry continued to witness structural expansion, supported by increasing private school enrolments, rising parental preference for quality education and accelerating digital adoption across learning ecosystems. The implementation momentum of the National Education Policy (NEP) 2020, growing penetration of smart classrooms, AI-enabled learning tools and hybrid education models further strengthened the sectors transformation trajectory. The Indian K-12 education market reached approximately USD 103.05 billion in FY 2025 and is projected to reach approximately USD 276 billion by FY 2034, growing at a CAGR of 11.57% during FY 2026—2034, reflecting sustained demand for modern curriculum frameworks, skill-based education and technology-integrated learning platforms. Additionally, increasing investments in education infrastructure, expansion of organised private schooling networks and heightened awareness regarding holistic student development continued to support industry growth during the year.

The Indias K-12 education industry remains constructive over the medium term, driven by favourable demographics, policy- led reforms and rising investments in digital and experiential learning ecosystems. The sector is expected to benefit from increasing adoption of personalised learning solutions, expansion of international and blended curriculum models and deeper integration of artificial intelligence and data-driven teaching methodologies. Furthermore, improving internet penetration, growing affordability of digital devices and government initiatives promoting inclusive and technology-enabled education are likely to broaden access across both urban and semi-urban regions. The continued shift toward premium schooling formats, STEM-focused education and outcome-oriented learning frameworks is anticipated to create long-term growth opportunities for organised education players, while strengthening the overall scalability and resilience of the Indian K-12 ecosystem.

India K-12 Education Market Growth Trend

Opportunities in Indias education industry

Opportunities	Description
Growing Middle-Class Income & Education Spending	Rising disposable income and increasing parental focus on quality education are boosting demand for private schools, coaching institutes, skill-based program sand international curriculum schools. This trend is further supporting premiumization and expansion across organized education providers.
Expansion of Skill Development & Employability Programs	Industry demand for skilled professionals in AI, data analytics, fintech, healthcare and advanced manufacturing is accelerating vocational education, certification programs and industry-integrated learning. The growing emphasis on employability is encouraging institutions to align courses with evolving industry requirements.
Government Support & Increased Budget Allocation	Higher government expenditure on education infrastructure, digital classrooms, PM eVIDYA, Samagra Shiksha and research initiatives is strengthening sector growth and accessibility. Various public-private partnership initiatives are also supporting modernization of educational infrastructure and content delivery.
Growing Demand for Higher Education & Global Partnerships	Indias large youth population and increasing aspiration for quality higher education are encouraging foreign university collaborations, research partnerships and expansion of private universities. The internationalization of education is expected to enhance research capabilities and global exposure for Indian students.

 

Challenges	Description
Infrastructure Gaps in Rural Areas	Many schools continue to face inadequate classrooms, limited digital infrastructure, teacher shortages and poor internet connectivity, especially in remote regions. These limitations continue to impact the quality and consistency of education delivery across rural India.
Shortage of Skilled Teachers & Faculty	The industry faces challenges in recruiting and retaining qualified educators capable of delivering technology-driven and skill-oriented education. Continuous faculty training and upskilling remain critical to meeting evolving educational standards.
Affordability & Income Disparity	High-quality private education remains expensive for a large section of the population, creating unequal access to learning opportunities. Economic disparities continue to widen the gap between urban premium education and affordable rural education systems.
Regulatory & Policy Uncertainties	Frequent policy changes, compliance requirements, accreditation norms and approval processes can impact operational efficiency and investment decisions. Delays in implementation and varying state- level regulations also create operational complexities for institutions.
Intense Competition Across Segments	The sector faces growing competition from private institutions, global education platforms, EdTech companies, coaching centers and international universities entering the Indian market. Increasing competition is exerting pressure on pricing, student acquisition and overall profitability.

Company overview

Zee Learn Limited is one of Indias leading education companies with a diversified presence across the preschool, K-12 and vocational education segments. The Company operates through well-recognised brands including Kidzee, Mount Litera Zee Schools (MLZS), Zee Institute of Media Arts (ZIMA) and Zee Institute of Creative Art (ZICA), delivering learner-centric education solutions across India and Nepal. Over the years, the Company has built strong brand equity supported by its focus on academic excellence, innovative pedagogy, curriculum development and technology- enabled learning solutions.

The Company continued to strengthen its education ecosystem through strategic initiatives such as Litera Nova, Value Added Services (VAS) across the K-12 segment and ZNIUS, its integrated curriculum solution designed to meet the evolving needs of educational institutions. Zee Learn also continued to leverage its robust franchise-led business model, digital capabilities and infrastructure investments to expand its reach and enhance operational effectiveness. In line with its long-term growth strategy, the Company further strengthened its presence in the broader education ecosystem through its investment in Vidyasea, an AI- driven study abroad and career guidance platform. Backed by an experienced management team and a strong operational framework, Zee Learn remains focused on driving sustainable growth, innovation and quality education delivery across its business verticals.

Operational highlights

Kidzee continued to strengthen its position in the Early Childhood Care and Education segment during FY26, supported by its expanding franchise network and growing student base. The network increased to 2,500+ pre-schools, strengthening its presence across target markets. The franchise model continued to provide partners with infrastructure, branding, curriculum, teacher training, academic delivery and operational support. The Pentemind programme remained central to the learning proposition, with differentiated experiences across Standard, Classic and Select tiers. The Company remained focused on expanding its reach, strengthening enrolments and enhancing the overall value proposition for franchise partners and families.

Zee School

The K-12 business continued to strengthen its presence through the expanding network of 130+ Mount Litera Zee Schools, contributing to the Companys broader education ecosystem. The business remained focused on delivering a holistic and competency- driven learning experience aligned with evolving educational requirements. The launch of Litera Nova supported the transition towards personalised, technology-enabled and interdisciplinary learning. The schools also expanded their offering through value- added initiatives spanning STEM, robotics, mentorship, literacy, sports and music. These initiatives supported deeper student engagement while strengthening the overall proposition of the K-12 network.

Literal

During FY26, Litera Nova continued to support the Companys transition towards personalised and technology-enabled education, aligned with NEP 2020 and NCF 2023. The curriculum integrates neuroscience-based learning with AI and AR technologies, supported by the NOVA App for digital access and classroom engagement. Its Unique Learner Profile enables educators to understand individual learning styles, pace and preferences and tailor instruction accordingly. Interactive learning tools, digital content and teacher dashboards further supported competency- driven education and student progress monitoring. Nationwide teacher training and implementation support helped facilitate adoption across the school network.

Value Added Services

The Company continued to broaden its K-12 proposition through a range of value-added services designed to enhance students academic, creative and developmental experience. Initiatives included Model United Nations, STEM and robotics labs, structured mentorship and reading and literacy programmes. Specialised sports coaching, including a dedicated cricket academy, further expanded the extracurricular offering. The introduction of a School of Music provided structured training in vocal and instrumental performance, supporting artistic development. Collectively, these offerings strengthened the breadth of the education proposition and supported a more holistic student experience.

ZIMA

The vocational education portfolio continued to provide industry- oriented training through ZICA and ZIMA, supporting the development of skills for the media and creative industries. ZICA operates in different cities and offers programmes spanning animation, VFX, gaming and design, supported by practical training, centralised assessments, masterclasses and placement support. ZIMA provides specialised programmes across direction, cinematography, editing, audio engineering, acting and film and television production. Both institutes continued to operate through a structured franchise model, supported by academic training, setup assistance and operational guidance.

UNIOC KING BRIIIIANCf

During FY26, the Company continued to scale ZNIUS, its comprehensive curriculum and school solutions platform aligned with NEP 2020 and NCF-SE 2023. The programme covers core academics alongside digital literacy, coding, STEAM, financial literacy and soft skills for Grades 1—8. Technology-enabled classrooms, including interactive flat panels and teacher tablets, support immersive learning, while parent portals and teacher enablement tools strengthen progress monitoring and instructional support. ZNIUS was offered through Ignite for scholastics and Advanced for co-scholastics, with 7 schools signed up during the financial year and full operational rollout underway

FINANCIAL REVIEW - STANDALONE PROFIT & LOSS

The Company delivered a strong and broad-based financial performance during FY26, reflecting continued momentum in its core education business and focused execution of its growth strategy. The Company continues to strengthen its leadership position in the school education segment through its extensive and diversified network of 2,500+ Kidzee pre-schools and 130+ Mount Litera Zee Schools (K—12), with its integrated network of pre-schools, K—12 schools and youth centres serving 2,30,000+ students. This expanding education ecosystem provides a strong platform for deeper market penetration, wider brand reach and sustainable revenue growth. The expansion of the franchisee school network, increase in student enrolments and introduction of new products e.g. Znius and value-added offerings supported the strengthening of the Companys revenue base and enhanced its ability to monetise its broader ecosystem. At the same time, the Company continued to invest in people, marketing, operational capabilities and educational content to build capacity for future growth. These investments were accompanied by a continued focus on productivity, cost discipline and efficient resource deployment, while a reduction in the finance cost burden provided additional support to profitability. The improvement in earnings was further aided by a significant exceptional write-back relating to historical credit facilities; being non-recurring in nature, this should be viewed separately from the Companys underlying operating performance. Overall, FY26 reflects a combination of business expansion, strategic investments, improved cost and financial efficiency, and a one-time exceptional benefit, with the Company continuing to focus on strengthening its core education platform, scaling its network, enhancing operating leverage and building a sustainable and increasingly recurring earnings base for long-term shareholder value creation.

Income

The Company delivered a healthy improvement in its operating performance during FY26, with Revenue from Operations increasing by 14% to H31,257 lakhs, compared with H27,384 lakhs

in FY25. The growth reflects the Companys ability to leverage its expanding operating platform and strengthen its underlying revenue base. A key contributor to the growth was the increase in student enrolments, supported by the continued expansion of the Companys network through the addition of franchisee schools. The expanding franchise network provides the Company with a broader platform for revenue generation while enabling it to deepen its presence across its target markets.

The Company also continued to diversify and enhance its revenue streams through the development and implementation of new business products and value-added offerings, including branding kits. These initiatives demonstrate the Companys focus on identifying emerging opportunities within its ecosystem and improving monetisation across its existing network.

Operational income increased by 13% during FY26, reflecting continued emphasis on operational efficiency, disciplined execution and strategic initiatives. The Companys financial performance was further supported by focused planning, effective execution and targeted marketing initiatives aimed at strengthening brand visibility, supporting student growth and expanding the Companys market presence.

Total Expenditure

The Companys total expenditure increased by 16% to H24,433 lakhs in FY26, compared with H21,121 lakhs in FY25, against a 14% growth in Revenue from Operations. The movement in the cost base was largely in line with the Companys efforts to build capacity ahead of and alongside business growth. The increase in expenditure was primarily driven by higher employee-related costs and other operating expenses associated with the Companys expanding scale of operations. The addition of franchisee schools and growth in student numbers required the Company to strengthen its operational, academic, sales and support infrastructure, resulting in a corresponding increase in the resources required to service the enlarged business base.

The Company recognises that growth in the cost base must ultimately translate into a stronger and more scalable revenue engine.

Accordingly, the focus is not merely on controlling expenditure, but on improving the productivity and commercial contribution of the resources deployed across the business. The Company remains focused on driving revenue growth in a capital- and cost-conscious manner, with emphasis on improving employee productivity, optimising operating costs and ensuring that investments in human capital translate into measurable business outcomes.

Operational Expenses

Operational expenses increased by 13% to H7,652 lakhs in FY26 from H6,756 lakhs in FY25. The increase remained below the 14% growth in Revenue from Operations, reflecting continued operating discipline as the business scaled.

The increase primarily reflects the Companys continued investment in supporting a larger operating platform, while maintaining a strong focus on cost productivity and efficient resource deployment. The Company remains focused on ensuring that incremental operating costs are aligned with corresponding growth in revenue-generating activities.

Employee Benefit Expenses

Employee benefits expenses increased by 25% to H6,489 lakhs in FY26 from H5,195 lakhs in FY25, primarily driven by the increase in employee headcount from 397 in FY25 to 525 in FY26. The expansion in workforce reflects a deliberate investment in strengthening the Companys capabilities and execution capacity to support its growth trajectory and the scaling of business operations.

The Company remains focused on ensuring that this investment in human capital translates into higher productivity, revenue growth and improved profitability. Management continues to adopt a disciplined approach to workforce expansion, with emphasis on aligning employee costs with business growth and measurable outcomes, thereby ensuring that investments in talent contribute to sustainable long-term value creation for shareholders.

Marketing and Advertisement Expenses

Marketing expenses increased by 120% to H 2,945 lakhs in FY26 against H 1,322 of FY25, reflecting a strategic increase in investment towards customer acquisition, brand visibility and revenue-generating initiatives. The higher spend was aligned with the Companys growth objectives and focused on expanding its market reach and strengthening the foundation for sustainable, scalable revenue growth.

The increase in marketing investment was accompanied by higher Revenue from Operations, demonstrating improved conversion of marketing efforts into business growth. The Company continues to adopt a disciplined, outcome-oriented approach to marketing expenditure, with greater emphasis on campaign effectiveness, customer acquisition economics and measurable returns. This ensures that incremental marketing investments are deployed efficiently and contribute to sustained revenue growth, improved operating leverage and long-term value creation.

Finance Costs

Finance costs decreased by 65% to H790 lakhs in FY26 from H2,241 lakhs in FY25, primarily due to the retrospective revision of the terms of an unsecured borrowing from a promoter group entity. During the year, the borrowing of H12,332.20 lakhs was transferred to another promoter group entity, with the interest terms revised from interestbearing to interest-free retrospectively with effect from 1 April 2025.

The resulting reduction in finance costs has had a positive impact on the Companys overall cost structure and profitability for FY26. The lower interest burden provides greater flexibility in the deployment of operating cash flows and enables the Company to direct a larger portion of its resources towards business operations and growth initiatives. Management remains focused on maintaining an efficient financing structure and prudent financial management to support sustainable improvement in profitability.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased by 123% to H1,124 lakhs in FY26 from H504 lakhs in FY25, primarily due to higher amortization of intangible assets relating to knowledge- based educational content for students. The increase reflects the systematic recognition of the investment made in developing and strengthening the Companys educational content and intellectual property, which supports its long-term learning offerings and business platform.

The higher amortization charge is a non-cash expense and represents the allocation of the cost of these educational content assets over their estimated useful lives. The underlying content remains an important business asset, with the Company focused on maximizing its utilization across its educational offerings and converting these investments into sustainable revenue growth over the long term.

Profit Before Tax (PBT)

The Companys Profit Before Tax (PBT) increased by 60% from H7,455 lakh in FY25 to H11,928 lakh in FY26, primarily on account of the write-back of H4,058 lakh relating to outstanding credit facilities, recognised as an exceptional item during the year. In addition to the above, the Company recorded an increase in revenue during FY26, reflecting growth in its underlying business operations. While the exceptional write-back has been the principal driver of the significant increase in PBT during FY26, the increase in revenue demonstrates positive momentum in the Companys core business and provides a more relevant indicator of the underlying operating performance.

The Company remains focused on strengthening its core operations, improving revenue generation and enhancing sustainable profitability, with future financial performance expected to be increasingly driven by the underlying business

Year on Year PBT % to Operating revenue increased from 27% of FY25 to 38% in FY 26.

Profit after tax

The Companys Profit After Tax (PAT) increased significantly to H9,056 lakh in FY26 from H5,418 lakh in FY25, registering a growth of 67% year-on-year. PAT as a percentage of Revenue from Operations also improved to 29% in FY26, as compared to 20% in FY25.

FINANCIAL REVIEW - STANDALONE BALANCE SHEET

Non-Current Assets:

Non-current assets increased marginally from H39,923 lakh in FY25 to H40,176 lakh in FY26, remaining broadly stable overall. The key movement within this category was the significant increase in intangible assets from H334 lakh to H1,743 lakh, primarily reflecting continued investment in educational content and knowledge-based assets. This investment is aligned with the Companys strategy of strengthening its educational platform and building capabilities for long-term growth.

Current Assets:

Current assets increased from H77,201 lakh in FY25 to H88,865 lakh in FY26, reflecting a stronger short-term asset position. The increase was supported by higher cash and cash equivalents, which rose from H2,198 lakh to H5,439 lakh, trade receivables from H1,888 lakh to H2,399 lakh, and other financial assets from H69,522 lakh to H77,688 lakh. The improvement in current assets strengthens the Companys liquidity and provides greater flexibility to meet working capital and operating requirements.

Total Assets:

The Companys total assets increased from H1,17,123 lakh in FY25 to H1,29,041 lakh in FY26, reflecting an overall strengthening of the asset base. The increase was primarily driven by growth in current assets, while the non-current asset base remained broadly stable. This provides the Company with a stronger financial platform to support its expanding operations and future strategic initiatives.

Equity / Net Worth:

Net Worth increased significantly from H16,284 lakh in FY25 to H25,385 lakh in FY26, primarily reflecting the Companys improved profitability during the year and the favourable impact of the writeback of the outstanding credit facility recognised as an exceptional item. The resulting strengthening of the net worth provides the Company with a stronger financial foundation and greater flexibility to support its ongoing business expansion and provides a positive impact on shareholder value and financial resilience.

Non-Current Liabilities:

Non-current liabilities declined from H18,721 lakh in FY25 to H18,087 lakh in FY26. Non-current borrowings remained stable at H12,332 lakh, while lease liabilities reduced from H1,260 lakh to H801 lakh. The relatively stable long-term borrowing position,

together with the reduction in lease liabilities, reflects a broadly stable long-term financing structure.

Current Liabilities:

Current liabilities increased from H82,119 lakh in FY25 to H85,568 lakh in FY26, despite current borrowings declining from H7,302 lakh to H3,552 lakh. The movement was primarily attributable to an increase in other financial liabilities and other current liabilities. The Company continues to focus on effective working capital and liability management to maintain adequate liquidity while supporting the scale-up of its operations.

Overall Financial Position:

Overall, the Companys balance sheet strengthened during FY26, with total assets and net worth increasing meaningfully, supported by improved liquidity and a reduction in current borrowings. The Company remains focused on prudent capital allocation, efficient management of financial resources and maintaining a balanced financial structure to support sustainable business growth and longterm shareholder value creation.

FINANCIAL REVIEW - CONSOLIDATED PROFIT & LOSS

The Group delivered a strong improvement in its consolidated top line during FY26, 18% growth over previous year, the growth was broad-based, with ZLL continuing to be the principal contributor, while DVPL and Liberium also recorded healthy growth in their respective revenue streams. However, the increase in the consolidated cost base remained higher than the growth in revenue, primarily reflecting continued investments in employee resources, business development, operating capabilities and asset creation across the Group. As a result, profit before exceptional items and tax declined at the consolidated level. The reported PBT and PAT nevertheless improved significantly during FY26, primarily due to the exceptional gain recognised during the year, including the substantial write-back recognised by ZLL.

Income

Consolidated Revenue from Operations recorded a healthy growth during FY26, increasing by 18% to H43,906 lakh from H37,194 lakh in FY25. ZLL continued to be the largest contributor to the Groups revenue and maintained steady growth of 14%, supported by the continued expansion of its core education business. At the same time, the subsidiaries recorded stronger growth rates, with DVPLs revenue increasing by 79% and Liberiums revenue increasing by 19%. The performance reflects the Groups continued expansion across its businesses and demonstrates growing scale beyond the core operations of ZLL.

The faster growth achieved by DVPL and Liberium has progressively strengthened the diversity of the Groups revenue base and provides an opportunity to build multiple engines of future growth. While the increase in revenue across the subsidiaries is encouraging, the key

focus remains on translating this top-line growth into sustainable operating profitability through improved cost efficiency, better operating leverage and stronger monetisation of their respective business platforms. Management remains focused on supporting the subsidiaries through their scaling phase while maintaining the growth momentum and profitability of ZLL, thereby creating a more balanced and sustainable consolidated earnings profile over the medium to long term.

Total Expenditure

Consolidated total expenditure increased by 21%, from H34,369 lakh in FY25 to H41,719 lakh in FY26, compared with an 18% increase in Revenue from Operations. The higher cost growth primarily reflects continued investments across the Group in employee capabilities, business expansion, marketing, financing and operating infrastructure. The increase was particularly influenced by the scaling requirements of the subsidiaries, which are currently investing in building their respective business platforms. Management remains focused on improving cost productivity and ensuring that incremental expenditure translates into higher revenue, better operating leverage and sustainable profitability as the businesses mature.

Operational Expenses

Consolidated operational expenses increased by 13%, from H6,756 lakh in FY25 to H7,652 lakh in FY26, broadly in line with the expansion of the Groups operating activities. The increase was entirely attributable to ZLL, as DVPL and Liberium did not report operational costs under this category. The growth in operational expenses remained below the growth in consolidated revenue, indicating reasonable cost discipline within the core operating business. The Company continues to focus on efficient resource utilisation and maintaining a scalable operating cost structure as the Group expands its business and network.

Employee Benefit Expenses

Consolidated employee benefit expenses increased by 23%, from H13,290 lakh in FY25 to H16,334 lakh in FY26, reflecting continued investment in human capital across the Group. The increase in employee costs reflects the Groups focus on strengthening its organisational capabilities and creating the resources required to support future growth. While the higher employee cost has impacted the current consolidated cost structure, the underlying objective is to improve workforce productivity, enhance execution capabilities and support revenue expansion across the businesses. Management remains focused on ensuring that investments in human capital translate into measurable improvements in revenue generation, operating efficiency and profitability, particularly as the subsidiaries continue to scale their operations.

Other Expenditure

Consolidated Other Expenses increased by 40% to H9,533 lakh in FY26, reflecting higher business activity and continued investment across the Group. ZLLs other expenses increased by 30%, primarily

driven by higher operating, marketing and business development initiatives, while DVPLs expenses increased significantly as it continued to scale its operations. Liberiums other expenses remained broadly stable with moderate growth. The Group remains focused on ensuring that increased expenditure is aligned with revenue growth, improved productivity and stronger operating leverage.

Finance Costs

Consolidated finance costs remained broadly stable, declining marginally from H3,869 lakh in FY25 to H3,810 lakh in FY26. ZLLs finance costs declined significantly by 65% to H790 lakh, providing meaningful support to its profitability. This benefit was substantially offset by DVPL, where finance costs increased by 82% to H3,867 lakh, primarily reflecting its higher financing requirements. Management remains focused on optimising the Groups financing structure and improving cash generation at DVPL to reduce the financing burden as the business scales.

Depreciation and Amortization Expenses

Consolidated depreciation and amortisation increased by 21% to H4,391 lakh in FY26, primarily driven by ZLL and DVPL. ZLLs charge increased significantly due to higher amortisation of educational content and other intangible assets, while DVPL continued to carry a substantial depreciation charge. These are predominantly non-cash expenses and reflect investments made in long-term operating and knowledge-based assets. The Group remains focused on improving asset utilisation and ensuring that these investments translate into higher revenue and operating returns.

Profit Before Tax

Consolidated PBT increased significantly by 106%, from H3,288 lakh in FY25 to H6,778 lakh in FY26. The substantial improvement was primarily attributable to the favourable movement in exceptional items, particularly the exceptional write-back recognised by ZLL.

At the entity level, ZLLs PBT increased from H7,455 lakh to H11,928 lakh, while DVPLs loss before tax increased from H5,034 lakh to H5,202 lakh. Liberium moved from a PBT of H128 lakh to a loss of H757 lakh, reflecting the impact of exceptional items at the subsidiary level. Consequently, although ZLL continued to generate strong profitability, the subsidiary-level losses continued to moderate the Groups consolidated earnings.

FINANCIAL REVIEW - CONSOLIDATED BALANCE SHEET

Non-Current Assets:

Consolidated non-current assets stood at H67,812 lakh in FY26, compared with H71,070 lakh in FY25, representing a decrease of around 5%. The movement was primarily due to the transfer of Investment Property under Development of H3,387 lakh in FY25 into investment property during FY26. Accordingly, investment property increased from H45,548 lakh to H46,351 lakh. Other intangible

assets also increased from H8,693 lakh to H9,544 lakh, reflecting continued investment in educational content and other intangible assets. DVPL remains the principal contributor to the Groups investment property and intangible asset base, highlighting the significant asset platform being developed within the subsidiary.

Current Assets :

Current assets increased significantly by around 15%, from H79,861 lakh in FY25 to H91,469 lakh in FY26. The increase was supported by higher cash and cash equivalents, trade receivables and other financial assets. Cash and cash equivalents more than doubled from H2,604 lakh to H5,663 lakh, strengthening the Groups immediate liquidity position. Trade receivables increased from H4,051 lakh to H4,729 lakh, broadly in line with the expansion in revenue, while other financial assets increased from H69,522 lakh to H77,688 lakh and continued to constitute the largest component of current assets. The improvement in liquidity provides greater financial flexibility to meet operating requirements and support future growth initiatives.

Total Assets:

The Groups total assets increased by approximately 6%, from H1,50,931 lakh in FY25 to H1,59,281 lakh in FY26. The increase was predominantly driven by the growth in current assets, which more than offset the reduction in non-current assets. ZLL continued to account for the largest portion of the consolidated asset base, while DVPL also maintained a substantial asset base primarily through investment property, intangible assets and right-of-use assets. The overall increase in assets indicates continued expansion of the Groups financial and operating platform.

Equity / Net Worth:

Consolidated equity increased from approximately H19,610 lakh in FY25 to H23,503 lakh in FY26, an improvement of around 20%. Other equity increased from H16,339 lakh to H20,232 lakh, primarily reflecting the profitability generated during FY26 and the resulting strengthening of accumulated reserves. ZLL remained the principal contributor to the Groups equity, with its equity increasing from H16,284 lakh to H25,385 lakh on a standalone basis. The improvement in consolidated net worth strengthens the Groups capital base and provides greater financial resilience. However, the impact of exceptional items should be considered separately while assessing the recurring quality of earnings and long-term sustainability of the increase in equity.

Non-Current Liabilities:

Consolidated non-current liabilities increased from H43,574 lakh to H45,017 lakh, representing an increase of approximately 3%. The increase was primarily attributable to higher non-current borrowings, which increased from H25,121 lakh to H27,196 lakh, partly offset by a reduction in lease liabilities from H3,769 lakh to H3,412 lakh. DVPL accounted for a substantial portion of the Groups long-term borrowings, reflecting the financing deployed towards its asset and business platform. The Group continues to focus on aligning long

term borrowings with the productive asset base and future cashgenerating capacity of the respective businesses.

Current Liabilities:

Consolidated current liabilities increased by approximately 3%, from H87,747 lakh in FY25 to H90,761 lakh in FY26. Notably, current borrowings declined significantly from H10,395 lakh to H6,644 lakh, indicating a reduction in short-term borrowing (mainly due to write back of credit facilities) and providing some relief to nearterm liquidity. This benefit was partly offset by an increase in other financial liabilities from H67,065 lakh to H71,139 lakh, along with higher trade payables and other current liabilities. The movement highlights the importance of continued working capital discipline and effective management of operating and financial obligations as the Group expands.

Overall Financial Position:

Overall, the consolidated balance sheet reflects a strengthening financial position, characterised by growth in total assets, higher net worth, significantly improved cash balances and lower shortterm borrowings. At the same time, the Group continues to carry a substantial liability base, particularly through long-term borrowings and other financial liabilities. From a shareholder perspective, the key positive is the improvement in liquidity and equity, while the key area of focus remains the efficient deployment of the Groups substantial asset base and the ability of subsidiaries, particularly DVPL, to generate sufficient operating returns from the assets and investments already created. Management remains focused on prudent capital allocation, working capital optimisation, financing discipline and improving the return generated from the Groups consolidated asset base.

INTERNAL CONTROL

The Company has established a comprehensive internal control framework across the Group, designed to support operational efficiency, safeguard assets, ensure the reliability of financial reporting, and promote compliance with applicable laws and regulations. The control environment is structured around identification and assessment of key operational, financial and compliance risks, with appropriate controls and monitoring mechanisms implemented based on the nature and significance of such risks. The framework is periodically reviewed to ensure that it remains aligned with the evolving scale and complexity of the Groups operations.

The Group follows a clearly defined segregation of duties and delegation of responsibilities across key processes, thereby reducing the risk of errors, omissions and unauthorised transactions. Appropriate checks and approval mechanisms are embedded within critical business and financial processes, while robust IT controls, including access controls, system security measures, regular updates, firewalls and monitoring mechanisms, are implemented to protect information, systems and data.

Financial and operational controls are supported by regular reconciliations of accounts, financial records, receivables, payables and inventory, with identified variances reviewed and resolved on a timely basis. A structured management reporting system enables management to monitor key operating and financial parameters, assess business performance and take timely corrective actions. Internal audits are conducted periodically by qualified professionals to independently evaluate the adequacy and effectiveness of the control environment and recommend improvements wherever required.

The Company continues to strengthen its internal control framework in line with the expanding scale of the Group and its diversified operations. Key business and financial indicators, emerging risks and significant changes in the business environment are monitored on an ongoing basis, with material matters appropriately escalated to the senior management and the Board. Overall, the Group remains focused on maintaining a strong, transparent and responsive control environment that supports sustainable growth, effective risk management and sound corporate governance.

Key ratios Standalone

Ratio	2025-26	2024-25
Current ratio (in times)	1.04	0.94
Debt equity ratio (in times)	0.63	1.21
Debt service coverage ratio (in times)	0.81	0.46
Return on equity ratio (in %)	36%	33%
Net profit ratio (in %)	29%	20%
Return on capital employed (in %)	29%	28%

Consolidated

Ratio	2025-26	2024-25
Current ratio (in times)	1.01	0.91
Debt equity ratio (in times)	1.44	1.81
Debt service coverage ratio (in times)	0.39	0.25
Return on equity ratio (in %)	16%	6%
Net profit ratio (in %)	9%	3%
Return on capital employed (in %)	15%	11%

Business outlook

Zee Learn Limited remains focused on strengthening its financial and operational foundations while pursuing a more diversified and sustainable growth strategy. With continued emphasis on financial recovery and disciplined management of legacy financial obligations, the Company aims to rebuild business momentum, improve operating performance and create scalable revenue opportunities across its education ecosystem. The Company will continue to strengthen its established platforms across early learning through Kidzee, school education through Mount Litera

Zee Schools, and creative and vocational education through ZICA and ZIMA, while expanding into technology-enabled education and school management solutions.

Going forward, the Company will pursue an asset-light, franchise- led growth model, with emphasis on network expansion, centre- level productivity and stronger franchise-partner support, particularly across Tier-2 and Tier-3 markets. Technology, AI and digital transformation will remain key enablers, including the development of a unified cloud-based ecosystem, enhanced parent engagement solutions and scaling of Znius as a technology-led curriculum and school management platform. The Company will also explore opportunities in creative and vocational education and other emerging education solutions to diversify revenue streams. While legacy financial exposures, competitive intensity and external uncertainties require continued discipline, the Company remains focused on maintaining a lean operating structure, strengthening execution capabilities and building a more resilient platform for sustainable long-term growth and stakeholder value creation.

Human Resources

Human resources continued to remain a key focus area for the Company, with sustained emphasis on talent development, employee engagement and organisational capability building. During the year, the Company strengthened its people practices through focused learning and development initiatives, leadership capability enhancement, digital HR interventions and employee engagement programmes aimed at fostering a collaborative and performance-driven work culture. The Company also continued to invest in employee well-being, workplace improvement initiatives and talent acquisition to support future growth requirements. Employee relations remained cordial and harmonious throughout the year, reflecting the Companys continued commitment towards building an inclusive, motivated and future-ready workforce.

Risk mitigation

Zee Learn is exposed not only to broad macroeconomic risks such as political, economic, technological, regulatory and environmental disruptions, but also to several business-specific risks associated with its education-centric operating model. These include regulatory and policy risks arising from changes in education regulations, affiliation standards and compliance requirements, which may influence operations, curriculum implementation and long-term strategic planning. The Company also faces franchise and operational risks, where inconsistencies in quality standards, compliance practices, or brand representation across franchise centres may adversely affect its reputation, stakeholder trust and service delivery standards. In addition, intellectual property risks related to the unauthorised use, duplication, or misuse of proprietary curriculum content and brand assets could lead to legal implications and reputational concerns.

Execution risk remains another critical area, as the timely and efficient implementation of projects, including the delivery of study materials, training programmes and assessments, is essential for sustaining revenue streams and maintaining stakeholder confidence. Ensuring delivery commitments are met within defined timelines, quality parameters and budgetary limits is crucial for operational success. Any shortcomings in execution arising from logistical challenges, resource limitations, or quality related issues may result in financial losses, reputational impact and loss of business opportunities.

Recognising that risk is an integral part of business operations, Zee Learn follows a proactive and systematic risk management approach focused on identifying, assessing, mitigating and monitoring risks rather than avoiding them. The Company continues to enhance its project management capabilities and operational control mechanisms to minimise potential disruptions and maintain service excellence. Its Enterprise Risk Management (ERM) framework is deeply integrated into business operations and encompasses risk identification, classification, prioritisation, mitigation, monitoring and reporting processes.

The Company adopts both bottom-up and top-down risk management approaches to ensure comprehensive risk coverage. While business units are responsible for identifying and mitigating operational-level risks, Senior Management provides strategic oversight over legal, operational, strategic and macroeconomic risks. This integrated framework enables Zee Learn to effectively manage both internal and external challenges while safeguarding its operational stability, brand reputation and long-term growth objectives.

Internal controls

The Company has established a comprehensive internal control framework across the Group, designed to support operational efficiency, safeguard assets, ensure the reliability of financial reporting, and promote compliance with applicable laws and regulations. The control environment is structured around identification and assessment of key operational, financial and compliance risks, with appropriate controls and monitoring mechanisms implemented based on the nature and significance of such risks. The framework is periodically reviewed to ensure that

it remains aligned with the evolving scale and complexity of the Groups operations. The Group follows a clearly defined segregation of duties and delegation of responsibilities across key processes, thereby reducing the risk of errors, omissions and unauthorised transactions. Appropriate checks and approval mechanisms are embedded within critical business and financial processes, while robust IT controls, including access controls, system security measures, regular updates, firewalls and monitoring mechanisms, are implemented to protect information, systems and data.

Financial and operational controls are supported by regular reconciliations of accounts, financial records, receivables, payables and inventory, with identified variances reviewed and resolved on a timely basis. A structured management reporting system enables management to monitor key operating and financial parameters, assess business performance and take timely corrective actions. Internal audits are conducted periodically by qualified professionals to independently evaluate the adequacy and effectiveness of the control environment and recommend improvements wherever required.

The Company continues to strengthen its internal control framework in line with the expanding scale of the Group and its diversified operations. Key business and financial indicators, emerging risks and significant changes in the business environment are monitored on an ongoing basis, with material matters appropriately escalated to the senior management and the Board. Overall, the Group remains focused on maintaining a strong, transparent and responsive control environment that supports sustainable growth, effective risk management and sound corporate governance.

Cautionary statement

This Management Discussion and Analysis may include forward looking statements that reflect the Companys views on the industry, future goals, projections and expectations. These statements are based on current assumptions and are subject to risks and uncertainties. Actual outcomes may differ significantly from those expressed or implied. The Company is not obligated to update or revise any forward-looking statements in light of future events or new information. Readers are advised not to rely heavily on these statements