Career Point
This company is synonyms with IIT entrance exam tests at the hub of coaching classes in Kota, Rajasthan. But it looks like Q4FY16 has not been all that good for the company.
It reported a 20% (YoY) drop in consolidated net sales at Rs.20 crore – again not the season for new enrolments. Being a coaching class, maximum expense of the company goes on manpower and 60% of its total costs is on employees. It managed to bring down total costs by 32% and that helped double the EBITDA from Rs.3 crore to Rs.6 crore. Margins improved from 12% to 30%.
It ended the quarter with a 24% drop in consolidated net profit at Rs.3 crore though it ended FY16 on a super note – net profit was up 133% at Rs.14 crore. EPS for FY16 stands at Rs.7.97 (face value Rs.10).
Its borrowings as at 31st March 2016 stood at Rs.47 crore and cash is very small at less than Rs.2.5 crore.
For FY17, the company has hiked fees by 7% and we could the effect of this on the margins. The conmpany’s tie-up with National Skill Development Corporation is expected to be a new vertical in current fiscal which could contribute well to the earnings.