Coaching classes take online route amid Covid-19 spread: CRISIL SME Tracker

Small and medium enterprises (SMEs) in the coaching industry, which account for 70-80 per cent of admissions across the country, have started taking the online route to retain enrolments amid the Covid-19 pandemic and the extended lockdown to contain it. CRISIL’s interactions show that most players, even SMEs, have managed to reach students amid the lockdown by switching to online channels.

However, a few smaller ones have found it difficult to cope. Given a lack of online infrastructure that can help ramp up enrolments for the upcoming academic season, these players are likely to see erosion in their share of enrolments in the current fiscal year. 

For the industry overall, revenue growth is likely to be impacted owing to lower collections during the lockdown. Growth in fees will be impacted owing to a shortened academic year and the reduced incomes of households.

Given the restrictions on movement, enrolments — especially in Kota and other hubs — will be a key monitorable. It is likely that students will prefer to access classes through online channels, or enrol in local classes even when the lockdown is lifted and other restrictions are eased.

Over the medium term, however, growth is expected to return to healthy levels, considering that the industry is structurally growth-oriented.