Zee Learn Ltd Management Discussions.

Economic Overview

Global Economic review

A year ago economic activity was accelerating in almost all regions of the world and the global economy was projected to grow at 3.9 percent in 2018 and 2019. One year later, much has changed: the escalation of US China trade tensions, macroeconomic stress in Argentina and Turkey, disruptions to the auto sector in Germany, tighter credit policies in China, and financial tightening alongside the normalization of monetary policy in the larger advanced economies have all contributed to a significantly weakened global expansion, especially in the second half of 2018. With this weakness expected to persist into the first half of 2019, the World Economic Outlook (WEO) projects a decline in growth in 2019 for 70 percent of the global economy. Global growth, which peaked at close to 4 percent in 2017, softened to 3.6 percent in 2018, and is projected to decline further to 3.3 percent in

2019. Although a 3.3 percent global expansion is still reasonable, the outlook for many countries is very challenging, with considerable uncertainties in the short term, especially as advanced economy growth rates converge toward their modest long-term potential.

While 2019 started out on a weak footing, a pickup is expected in the second half of the year. This pickup is supported by significant policy accommodation by major economies, made possible by the absence of inflationary pressures despite closing output gaps. The US Federal Reserve, in response to rising global risks, paused interest rate increases and signalled no increases for the rest of the year. The European Central Bank, the Bank of Japan, and the Bank of England have all shifted to a more accommodative stance. China has ramped up its fiscal and monetary stimulus to counter the negative effect of trade tariffs. Furthermore, the outlook for US China trade tensions has improved as the prospects of a trade agreement take shape.

Indian Economic review

Indias economy is picking up and growth prospects look bright partly thanks to the implementation of recent policies, such as the nationwide goods and services tax. As one of the worlds fastest-growing economies accounting for about 15 percent of global growth Indias economy has helped to lift millions out of poverty. Indias economy is gaining momentum, thanks to the implementation of several recent noteworthy policies such as the enactment of the long-awaited goods and services tax, and the country opening up more to foreign investors.

Industry Size

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Indias GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19. India has retained its position as the third largest startup base in the world with over 4,750 technology start-ups. Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

Road Ahead

Indias gross domestic product (GDP) is expected to reach US$ 6 trillion by FY27 and achieve upper-middle income status on the back of digitisation, globalisation, favourable demographics, and reforms.

Indias revenue receipts are estimated to touch Rs 28-30 trillion (US$ 385-412 billion) by 2019, owing to Government of Indias measures to strengthen infrastructure and reforms like demonetisation and Goods and Services Tax (GST).

India is also focusing on renewable sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by 2030 which is currently 30 per cent and also have plans to increase its renewable energy capacity from to 175 GW by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by Pricewaterhouse Coopers.

Sector Review Education Sector

With a population of more than 1.3 billion, its no surprise that India runs the largest national school system in the world. While its not often recognized for its quality, education in the south Asian country has been on the rise, and now places in the top half of U.S. News & World Reports rankings of 80 countries for best in education.

With more than 700,000 schools in operation, India certainly has a big job on its hands. Despite the recent improvements in Indian school systems, many parents choose to educate their children in private institutions. In fact, just 70% of school age children attend public schools. That being said, only about 50% of Indian children go to school at all: while registration is compulsory, attendance isnt typically enforced.

Industry Size

Indias education sector offers a great opportunity with approximately 29 per cent of Indias population being between the age group of 0-14 years. Indias higher education segment is expected to increase to US$ 35.03 billion by 2025. The education sector in India is estimated at US$ 91.7 billion in FY18 and is expected to reach US$ 144 billion in FY20. As of December 2018, internet penetration in India had reached 46.13 per cent. Increasing internet penetration will help in education delivery.

India has over 250 million school going students, more than any other country. It also has one of the largest networks of higher education institutions in the world. Number of colleges and universities in India reached 39,050 and 903, respectively in 2017-18. India had 36.64 million students enrolled in higher education in 2017-18. Gross Enrolment Ratio in higher education reached 25.8 per cent in 2017-18. In December 2018, the government of India published that 3.43 million candidates had enrolled in the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2016-20 scheme. Up to January 24, 2019 as many as 2.52 million candidates were trained under the schemes Short Term Training (STT).


There are close to 106 Mn children in 2-5 age group, out of which 60 Mn children go to pre-school or an early childhood education centre. With a market size of US$ 1.18 Bn, India has highest number of preschool children enrolled globally (Source: Kaizen Education, 2014). Currently, India has close to 0.5 Mn private pre-schools including both organised and unorganised. Given the low penetration level of pre-schools it is estimated to grow at 23 per cent CAGR over 2022.

The segment is majorly unregulated in the country with pre-school education not being compulsory. The National Commission of Protection for Child Rights (NVPCR) has formed guidelines for private pre-schools to ensure child safety and bring uniformity and inclusiveness. All pre-schools are required to be registered with NCPCR and ensure police verification of all employees.


The current K-12 school system in India is one of the largest in the world with more than 1.5 Mn schools that have more than 250 Mn students. Private schools account for about 25% of total schools. Based on the differential geography and income-levels of Indian population, three different sub-markets have emerged within private school segments namely, High-End Schools (having fees more than 60,000 per annum), Mid-Market Schools (having fees between 12,000-60,000 per annum) and Affordable Private Schools (having fees under 12,000 per annum). As per rules, schools are formed as non-profit organisations and any surplus generated is needed to be ploughed back into the improvement of the school.

With increasing awareness, private Indian players are collaborating with international brands to provide international standard quality education. Schools are investing in information and multimedia education technologies to provide better education to students. Increase in technology has also influenced the education sector due to which smart classes are gaining acceptance. Technology-driven learning is introducing a qualitative and quantitative difference to education. The introduction of online learning in Indian education system has changed its scenario, with its reach and economical access.

Higher Education

Indias higher education system is the largest in the world with over 70 Mn students and it ranks second in terms of student enrolment in higher education. By 2025, the segment is expected to reach US$ 35.03 Bn. This includes various institutions providing graduate courses in various streams and post graduate courses. Mostly higher education is controlled by government under various central and state universities. However private players are foraying in a big way in post-graduate courses. With increasing need for formal education higher education has become commonplace and increasing number of students are opting for post graduate courses with a view to secure more competitive jobs.

Coaching and Test Preparation Institutes

Test preparation market size is estimated to be US$ 11.27 Bn and Tutoring market size at US$ 9 Bn by 2020. With child development becoming the priority of parents there has been a tremendous rise in coaching institutes which offer both curricular and extra-curricular activities. Coaching classes offer tuitions for all grades, preparation for entrance exams and coaching for higher education as well. In extra-curricular coaching institutes cover everything from day-care to soft skill development to dance, art, craft, computer training etc. there has been a tremendous rise in coaching institutes with increasing competitiveness and growing need for all-round development. Many schools offer extra-curricular activities in their campus to formalise these activities and provide an element of security and assurance to parents.

Manpower training

Teacher training is emerging as a huge need area as teacher quality is a big barrier to improvement in learning outcomes. Despite being the second largest education system in the world, there is serious shortage of good faculty in India. There is a huge need for both pre-service and in-service training for teachers. Of the 9 Mn teachers working in schools (K-12) only 80% are professionally trained. Pre-service teacher training has mainly been in the hands of government and private institutes that provide Bachelors and Masters degree in education. Social enterprises have mainly been driven by non-profit models with some for-profit models emerging given the need of the hour. While there is a strong need to change the policy to revamp teacher training in India, there is huge opportunity for entrepreneurs to design

solutions that can help train teachers to be more effective in the classroom. Source: IBEF June 2018, Technopak Education Outlook June 2017

Opportunities in Education Sector in India

Investments in Education

100 per cent FDI (automatic route) is allowed in the Indian education sector.

An estimated investment of ~US$ 200 billion is required to achieve the governments target of 30 per cent GER for the education sector by 2020.

The government also promotes Public Private Partnership (PPP) and tax concessions to encourage foreign players in the industry.

Immense Growth potential

India has the worlds largest population of about 500 million in the age bracket of 5-24 years and this provides a great opportunity for the education sector.

The education industry in India is estimated to reach US$ 144 billion by 2020 from US$ 97.8 billion in 2016

Policy Support

The continued focus of the Government of India towards liberalising the Education sector, is reflected by the proposed introduction of trend setting bills such as the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010 and the Educational Tribunals Bill, 2010.

The Department of School Education and Literacy has launched SamagraShiksha programme with effect from 2018-19 for the school education sector extending from pre- school to class 12th providing quality education at all levels.

In December 2018, the Government of India published that 3.43 million candidates had enrolled in the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2016-20 scheme. Up to January 24 ,2019, as many as 2.53 million candidates were trained under the schemes Short Term Training (STT).

Education sector in India remains to be a strategic priority of the government. Skill India Mission 2015 aims at skilling around 400 million youths in the country by 2022.

Public Private Partnership (PPP)

Setting up of formal educational institutes under the PPP mode and enlarging the existing ones

In the case of PPP the Government is considering different models like the basic infrastructure model, outsourcing model, equity/hybrid model and reverse outsourcing model.

Government Initiatives

Some of the other major initiatives taken by the Government of India are:

In August 2018, Innovation Cell and Atal Ranking of Institutions on Innovation Achievements (ARIIA) were launched to assess innovation efforts and encourage a healthy competition among higher educational institutions in the country.

In August 2018, Government of India launched the second phase of

‘Unnat Bharat Abhiyan which aims to link higher educational institutions in the country with at least five villages. The scheme covers 750 such institutions.

The allocation for school education under the Union Budget 2018-19 is expected to increase by 14 per cent, to focus on accelerating existing schemes and quality improvement.

In order to boost the Skill India Mission, two new schemes, Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE), have been approved by the Cabinet Committee on Economic Affairs (CCEA), Government of India, with an outlay of 6,655 crore (US$ 1.02 billion) and will be supported by the World Bank.

The Ek Bharat Shreshtha Bharat (EBSB) campaign is undertaken by Ministry of Human Resource Development to increase engagement between states, union territories, central ministries, educational institutions and general public.

Prime Minister Mr Narendra Modi launched the Skill India initiative ‘Kaushal Bharat, Kushal Bharat. Under this initiative, the government has set itself a target of training 400 million citizens by 2022 that would enable them to find jobs. The initiatives launched include various programmes like: Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Policy for Skill Development and Entrepreneurship 2015, Skill Loan scheme, and the National Skill Development Mission.

In December 2018, the Government of India published that 3.43 million candidates had enrolled in the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2016-20 scheme. Up to January 24, 2019 as many as 2.53 million candidates were trained under under the schemes Short Term Training (STT).

Road Ahead for Indian Education Sector

In 2030, it is estimated that Indias higher education will:

Adopt transformative and innovative approaches in Higher education.

Have an augmented Gross Enrolment Ratio (GER) of 50 per cent

Reduce state-wise, gender based and social disparity in GER to 5 per cent.

Emerge as a single largest provider of global talent, with one in four graduates in the world being a product of the Indian higher education system.

Be among the top five countries in the world in terms of research output with an annual R&D spent of US$ 140 billion.

Have more than 20 universities among the global top 200.

SWOT Analysis
Strength Weakness
Easy to Establish Qualified and capable faculty
Government Support Infrastructure especially in rural India
Low operational cost Political intervention in management of school
Plenty of good quality curriculum
Opportunities Threat
Demand for education growing Government Regulation
Population growth Competition
Foreign Tie-ups High faculty attrition
Rapidly growing technology Increasing trend of foreign education

Business performance review

Pre K

Kidzee has more than 1,900 operational pre-schools in over 800 cities across India and Nepal. Kidzee has so far touched the lives of more than 450,000 children since inception in 2003. In FY19 the Company signed 317 pre-schools.

The franchisee owner bears the establishment costs and an upfront franchisee fees. Further, it pays royalty each year under a revenue-share agreement and also student kit fee to franchisor. The franchisor provides the curriculum, content, kits and other necessary support like teacher training and advertising and marketing.

Its proprietary pedagogy, iLLUME sets Kidzee a class apart from other preschool chains. iLLUME is an approach that helps parents and teachers spot the unique potential in each child and help them realize it. Zee Learn offers franchise to local education entrepreneurs, especially women, to run and manage Kidzee preschools.

In FY19, the Company launched the new Kidzee App to fulfill the need gap of all stakeholders Parents, Partners and Teachers. The app allows data to flow seamlessly across these user groups and enables a smooth functioning of the centre.

Kidzee introduced Imagenie based on top class Augmented Reality technology, designed around age-appropriate learning and complements the classroom learning by continuing the learning process at home. Imagenie consists of Coloring sheets for PG and Nursery and Jigsaw puzzles for Jr. and Sr. KG. In FY18, the Company introduced an upgrade to the Sr. KG Kit in the form of new puzzles under the topic ‘Extinct Animals in line with developmental milestones of the children and observing the acceptance of the product by the children over the last year. The Company also introduced a new product under the Imagenie+ umbrella. The new product Spell-English, provides a value added immersive language learning experience for the child based on the basis of developing language the 3 Rs: Reading, ‘Riting and ‘Rithmetic. The product is offered from PG to Sr. KG and is designed to evolve from simple to complex activities beginning with pattern tracing and letter introduction to phonic introduction with rhymes and making sentences. The Company also continues to upgrade the Kidzee Learning Tablet to provide engaging content that is child friendly, age appropriate and developmentally fundamental for children.

K 12

Mount Litera Zee Schools (MLZS) aim to provide Learner-Centred education with an integrated approach - where the child is at the centre of everything. Mount Litera Zee Schools were initiated to bring about a quantum leap in how school education is delivered to the modern day child. The Company partners with local educational trusts under various operating models. The range of services and solutions provided under these partnerships range across school set up assistance, teacher-training, assessment, teaching materials, student learning resources, branding. In addition the Company runs five CBSE COCO schools at Goa, Bhatinda, Karnal, Patiala, and Nagpur having more than 3400 students and also runs an IB school at BKC Mumbai, which has around 500 students.

In FY19 the Company signed 7 and added 7 K12 Mount Litera Zee Schools taking the total count to 129 including 5 COCO schools. The total number of K12 kits dispatched in FY19 is around 64,000. These schools enjoy around 90 per cent retention rate.

Higher Education - HZU

In Higher education, we have a service agreement with the leading UGC approved state private university in Dehradun called the Himgiri Zee University (HZU). HZU is built on a 50 acre pristine campus and has 6 thriving schools of Engineering & Sciences; Management & Law; Agriculture & Forestry; Education & Social work; Clinical Research & Pharmaceutical Sciences and Vocational studies. It has been awarded last year as the Best Private University in Dehradun by ICCI.

Vocational training

Youth today is looking for vocational education outside the ambit or traditional higher education. The Companys Zee Institute of Media Arts (ZIMA), a TV and film training institute, in Mumbai offers professional courses in direction, acting, sound, editing, production and cinematography. Another offering from the company Zee Institute of Creative Art (ZICA) is the nations first full-fledged classical and digital animation training academy offering training in classical 2D, modern 3D animation, VFX, visual effects, graphic design and web design in over 16 cities across India.

In FY19 ZICA introduced 3 new programs in interior design, digital marketing and digital photography. The institute has strong emphasis on creating a stimulating environment for the students. ZICA focuses on the application of principles of art and design and fundamentals of animation to computer based digital animation and web design. A well laid out assessment procedure ensures the students acceptability as distinguished professionals in the world of Animation. ZICA training academy is equipped with high-end animation tools, 2D animation facilities, 3D software, visual FX Labs and Imaging Technologies. ZICAs placement cell provides placement assistance to all ZICA students across the country. ZICA students have been placed in production studios like Double Negative, Prime Focus, Maya Digital, Famous Studios, Creative Box, INNOV Reality, Contiloe Films etc. ZICA has launched one of its kind online learning platform for its students "E-Studio" enhancing their knowledge and skills.

ZIMA has international standard curriculum for all courses and a cutting-edge technology and infrastructure offering programs aligned in "School of Film & TV" and "School of Journalism". It is Indias first STEINBERG Certified Training Centre for Sound Design & Recording programs. It has a highly experienced faculty from Film, TV and Journalism industry. ZIMA offers courses in most domains of filmmaking, with creative courses like script writing, direction, acting, music and film appreciation or technical courses of cinematography, sound recording, editing and even production designing and integrated courses. Currently, ZIMA is operational at Mumbai, Noida and Jaipur and will be shortly launching their new center in Kolkata.

During FY19, Masterclass sessions and guest lectures were conducted by various industry professionals like Ms Deepti Naval (Bollywood actress), Mr. Rakesh Bedi (actor / director), Mr. Rohit Makwana (Assistant Editor Ek Villian, Aashiqui 2, Alone), Mr. Sumesh Lekhi (DOP and Film Maker), Mr. Suraj Gunjal (Assistant Editor Bombay Talkies, Ankhon Dekhi, Shab). AESTHETICS 2019 Youth conclave was organised in Jan 2019 offering one of its kind platform for the to showcase their creative work and attract subject matter experts, studios and production houses to provide exposure and know-how to the students and professionals. The event had guest speakers from various companies like ZEE5, Adobe, Unity, MSI Global, Quidich Innovation Labs, DigiQuest.

Manpower Training

With increasing awareness manpower training is gaining centre-stage among corporate who dedicate substantial time and resources to train their employees. Most organisations prefer to seek external help from training organizations to train their new joiners on general skills, and temporary staffing companies to manage payrolls, compliance and other HR aspects related to such contingent workforce. Liberium provides a one stop solution to the corporate by providing assistance to the corporate HR team to recruit the right resources, provide training on client specific required skills and place the associates on Liberium rolls to efficiently manage staff. Additionally on boarding & induction sessions conducted by Liberium help to motivate and engage the associates.

Liberium assists in effective hiring, rapid backfilling, soft skill training, strict adherence to compliance, quick turnaround time on associate/client queries, legal support, and performance and productivity tracking. Liberium help provides lateral hiring assistance, comprehensive solutions around payroll processing, training and HR business process outsourcing.

Test Prep / Tutorials

Mahesh Tutorials helps students with Secondary Education & foundation courses for competitive exams. It also has brands like Lakshya, MT Science, MT Commerce, Mahesh PU College, Sri Gayatri Academy and Aryan Foundation help students with higher secondary education and entrance exams.

Financial Review - Consolidated Results

During FY19, the Company signed 317 new Kidzee Pre Schools and 7 Mount Litera Zee K12 Schools, expanding its network to more than 800 cities in India. The Company strengthened its leadership position in the school segment with over 1900 Kidzee Pre-Schools and 129 Mount Litera Zee K12 Schools. Through network of pre-school centres, K-12 schools and Youth centres, the Company served 230,000+ students during Fy19.


The Companys total income increased by 102 per cent to 54,925 Lakhs in FY19 from 27,254 Lakhs in FY18 largely on account of MT Educares revenue ( 18,839 Lakhs) been consolidated for the first time with Zee Learn. Growth is also aided by 11 per cent growth in revenue from educational services /activities, 14 per cent growth in lease rentals and 67 per cent growth in revenue from Training, Manpower and related activities.


Total expenditure increased by 121 per cent to 43,472 Lakhs in FY19 from

19,698 Lakhs in FY18.

Operational Expenses

Operational expenses increased by 223 per cent to 14,537 Lakhs in FY19 from 4507 Lakhs in FY18 largely on account of MT Educares expenses ( 9711 Lakhs) been consolidated for the first time with Zee Learn. The increase in other operational expenses commensurate to increase in sales.

Employee Benefit Expenses

Employee benefits expenses increased by 80 per cent to 14,157 Lakhs in FY19 from 7,879 Lakhs in FY18 primarily on account of consolidation of MT Educare Ltd and 100% subsidiary Liberium Gloabal Resources Pvt Ltd, which is engaged into Training, Manpower and related activities.

Other Expenditure

Other expenditure increased by 69 per cent to 7258 Lakhs in FY19 from 4,290 Lakhs in FY18 largely on account of Marketing, advertisement and publicity expenses, travelling and conveyance expenses and legal and professional expenses (largely on account of consolidation of MT Educare Ltd)

Finance Costs

Finance costs increased by 148 per cent to 4731 Lakhs in FY19 from

1911 Lakhs in FY18 largely on account of consolidation of MT Educare Ltd.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses increased by 151 per cent to 2789 Lakhs in FY19 from 1112 Lakhs in FY18 on account of consolidation of MT Educare Ltd

Profit After Tax

The profit after tax increased by 69 per cent to 8339 Lakhs in FY19 from 4928 Lakhs in Fy18.


Share Capital

The equity share capital increased by 1.83 lakhs from 3,258.95 Lakhs as on March 31, 2018 to 3,260.79 Lakhs as on March 31, 2019 on account of issuance of equity shares to employees under employee stock ownership plan.

Other Equity

Other equity saw an increase of 7,773.62 Lakhs from 32,080.16 Lakhs as on March 31, 2018 to 39,853.77 Lakhs as on March 31, 2019 largely on account of Net Profits earned during the year.

Non-Current Liabilities

Non-Current liabilities saw an increase of 8,803.50 Lakhs from 48,260

Lakhs as on March 31, 2018 to 57,063 Lakhs as on March 31, 2019

Financial Liabilities

Financial Liabilities saw an increase of 11,008 lakhs from 24,074 Lakhs as on March 31, 2018 to 35,082 Lakhs as on March 31, 2019 majorly on account MT Educares Term loan 10,416 lakhs

Other Liabilities

Other Liabilities saw decrease of 2,557 Lakhs from 24,026 Lakhs as on March 31, 2018 to 21,469 Lakhs as on March 31, 2019 largely on account of discounting of security deposit received at present value as per IND AS.

Current Liabilities

Current liabilities saw an increase of 19,500 Lakhs from 10,122 Lakhs as on March 31, 2018 to 29,622 Lakhs as on March 31, 2019 on account increase in trade payables, tax liabilities and other liabilities.


Non-Current Assets

Non-Current Assets saw a net increase of 40,857 Lakhs from 85,745 Lakhs as on March 31, 2018 to 126,602 Lakhs as on March 31, 2019 on account of increase in fixed assets, goodwill, financial asset and deferred tax asset on acquisition of MT Educare.

Current Assets

Current assets saw a decrease of 13,326 Lakhs from 7,976 Lakhs as on March 31, 2018 to 21,302 Lakhs as on March 31, 2019 largely on account of acquisition of MT Educare.

Standalone Results


The Companys total income increased by 12 per cent to 22, 662 Lakhs in FY19 from 20,202 Lakhs in FY18 aided by 25 per cent growth in revenue from Course fees / Royalty on account of higher enrolments vis-a-vis FY18.

Total Expenditure

Total expenditure increased by 7 per cent to 13,993 Lakhs in FY19 from

13,066 Lakhs in FY18 largely on account of finance cost and operational cost.

Operational Expenses

Operational Expenses increased by 7per cent to 4826 Lakhs in FY19 from

4,507 Lakhs in FY18 commensurating to increase in sales.

Employee Benefit Expenses

Employee benefits expenses increased by 3 per cent to 2,952 Lakhs in

FY19 from 2,873 Lakhs in FY18 on account of annual salary hike.

Other Expenditure

Other expenditure decreased by 5 per cent to 3,841 Lakhs in FY19 from 4,037 Lakhs in FY18 largely on account of reduction of freight cost and legal and professional charges.

Finance Costs

Finance costs increased by 49 per cent to 1,997 Lakhs in FY19 from 1,336 Lakhs in FY18 on account of IND AS adjustment on 10.40% Secured Redeemable Non- Convertible Debentures.

Depreciation and Amortisation Expenses

depreciation and amortisation expenses increased by 21 per cent to 377

Lakhs in FY19 from 312 Lakhs in FY18.

Profit After Tax

The profit after tax increased by 35 per cent to 6,170 Lakhs in FY19 from

4,576 Lakhs in FY18.


Share Capital

The equity share capital increased by 1.83 Lakhs from 3,258.95 Lakhs as

on March 31, 2018 to 3,260.79 Lakhs as on March 31, 2019.

Other Equity

Other equity saw an increase of 5,905.83 Lakhs from 32, 109 Lakhs as on March 31, 2018 to 38,015 Lakhs as on March 31, 2019 largely on account of Net Profits earned during the year.

Non-Current Liabilities

Non-Current liabilities saw an increase of 4,399 Lakhs from 17,304 Lakhs

as on March 31, 2018 to 21,703 Lakhs as on March 31, 2019.

Financial Liabilities

Financial Liabilities saw an increase of 1428 Lakhs from 11,808 Lakhs as on March 31, 2018 to 13,236 Lakhs as on March 31, 2019 on account of IND AS adjustment

Other Liabilities

Other Liabilities saw an increase of 2,962 Lakhs from 5340 Lakhs as on March 31, 2018 to 8,302 Lakhs as on March 31, 2019 largely on account of discounting of security deposit received at present value as per IND AS.

Current Liabilities

Current liabilities saw an increase of 5,326 Lakhs from 8,454 Lakhs as on March 31, 2018 to 13,780 Lakhs as on March 31, 2019 on account of working capital demand loan.


Non-Current Assets

Non-Current Assets saw a net increase of 6,881 Lakhs from 45,441 Lakhs as on March 31, 2018 to 52,322 Lakhs as on March 31, 2019 on account of increase in financial assets (amount invested in MT Educare Ltd)

Current Assets

Current assets saw an increase of 8752 Lakhs from 15,685 Lakhs as on March 31, 2018 to 24,437 Lakhs as on March 31, 2019 on account of ICD issued to DVPL.

Internal Controls

The Companys internal control system has been designed keeping in mind the size and nature of operations to ensure strict compliance with applicable legislation. Internal audit team conducts periodic reviews about the business operations and periodically apprises the Board to ensure timely decision-making. The Board ensures that timely measures are taken in case of any deviation from budgeting.

All financial statements are properly documented. The management information system (MIS) forms an integral part of the companys control mechanism. This enables the Company to strictly adhere to all applicable procedures, laws, rules and statutes.

Human Resource

Intellectual capital is one of the key resources for the Company to ensure business sustainability and growth. The Company has a diverse employee base with unique creative skills, technical knowledge and functional proficiency. The experienced and talented pool of employees plays key roles in enhancing business efficiency, devising strategies, setting-up systems and evolving business. Nurturing people is a key organizational goal and leadership mandate. The Company conducts regular trainings to the employees to ensure skill upgradation and personnel development to enhance employee productivity. HR policies nurture a work culture that leads to employee satisfaction, unflagging motivation, and high retention rate. Employees have a sense of belongingness and feel empowered in driving business profitability. HR policies ensure proper awareness, encourage communication, and provide opportunities for employees to give feedback through periodic mailers, group announcements for key organisational updates, regular open forums attended by CEO and senior leadership team. The Companys three pronged strategy for people development encompasses providing challenging work, encouraging strong cross-functional interaction and provide structured training programmes.

Corporate Social Responsibility (CSR)

The Company follows a unified towards CSR at Essel Group level, wherein CSR contributions of the group entities are pooled in and used to fund high cost long-term projects aimed at building Human capital and creating lasting impact on the society.

Additionally, through its I Care Outreach to prevent child abuse the Company conducted 607 workshops touching 90,350 parents. The initiative is aimed at sensitizing maximum adults about the incidence of child abuse to create an abuse-free and nurturing environment for every child. The Company also furthered the causes of ‘Beti Bachao Beti Padhao and ‘Sukanya Samridhi Yojana campaign across all its centres.

Key Ratios

Ratios where there has been significant changes from FY18 to FY19

Consolidated Ratio
FY19 FY18
Debtors Turnover Ratio 6.54% 12.07%
Inventory Turnover 12.93 3.92
Interest Coverage 2.74 4.76
Current Ratio 62.6% 54.7%
Debt Equity Ratio 0.71 0.73
Operating Profit Margin 25.1% 33.8%

For the purpose of calculation, Average Debtors (Average of opening and closing) and Average Inventory (Average of Opening and Closing) has been considered.

The changes has been largely on account of consolidation of MT Educare for the first time in FY19.

Ratios where there has been significant changes from FY18 to FY19

Standalone Ratio
FY19 FY18
Debtors Turnover Ratio 7.27% 4.54%
Debt Equity Ratio 0.44 0.38

For the purpose of calculation, Average Debtors (Average of opening and closing) has been considered.

The changes has been discussed in detailed in financial analysis

Opportunities and Risk and Concerns


Large population with rapid urbanisation, increased disposable incomes and dual working families

Growing popularity of formal educational institutes

Willingness of parents to opt for private education versus Government education facilities

Low penetration of formal pre-schools and coaching institutes and huge demand supply gap

Growing popularity of private schools versus Government schools

Low percentage of trained teachers in the system with a need for the same

The Company plans to bid for government schools for providing Information and Communication Technology education platform

The Company plans to enter EPO segment by providing solutions for process out sourcing and remote tutoring and classroom support to overseas students

Risk and Concerns

Poor track reord of Indian education companies impacting sentiment of parents

Complex regulatory environment

Rising real estate and rental costs

Increased competition form unorganised players restircting increase in fees and compensating for increased expenses

Limited availability of quality teachers

Business Outlook

The Company has a strong presence in the pre-school and K-12 spaces of education sector. With the acquisition of MT Educare to be accomplished in the next financial year, the Company expects to expand its footprint in the coaching institute space. MT Educare is strong brand in Western and Southern India with strong brands like Lakshya, Mahesh Tutorials, Chitale classes and Robomate. Robomate is a very robust digital offering which has a potential of improving face-to-face classroom training courses and provide online methodology for reaching students across geographies including outside India.

The acquisition will also provide the students of Mount Litera system access to very high-end content, curriculum, tutorials, test preparation opportunities from Mahesh Tutorial especially for the students of the higher classes of IXth, Xth, XIth and XIIth. At the same time, MT Educare will get access to around 2,00,000 students of the Company and franchisee network of almost 2000 people who can be considered for becoming franchisees of offerings from MT Educare so as to provide it a pan-India base.

MT Educare has a strong presence in Government Vocational business and the Company is present in B2C Vocational business. The acquisition will also help strengthen the presence of the Company in the vocational business.

The Company is working to make its balance sheet asset light by divesting the real estate portfolio of the owned, operated schools. In case the Company is able to REIT out or divest these assets while continuing to have the schools, it will help improve financial parameters and release significant funds which can be invested for future growth.