You are here » Home » Companies » Company Overview » CL Educate Ltd

CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01011
BSE 00:00 | 16 Nov 116.00 -6.00
(-4.92%)
OPEN

118.00

HIGH

118.00

LOW

116.00

NSE 00:00 | 16 Nov 116.05 -5.70
(-4.68%)
OPEN

122.95

HIGH

122.95

LOW

115.20

OPEN 118.00
PREVIOUS CLOSE 122.00
VOLUME 1399
52-Week high 330.95
52-Week low 106.60
P/E 53.70
Mkt Cap.(Rs cr) 164
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 118.00
CLOSE 122.00
VOLUME 1399
52-Week high 330.95
52-Week low 106.60
P/E 53.70
Mkt Cap.(Rs cr) 164
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CL Educate Ltd. (CLEDUCATE) - Chairman Speech

Company chairman speech

Introduction

The year 2017-18 started with our getting listed on March 31st 2017.Needless to say this was and will remain one of the most cherished milestones for alL ofus at CL Educate. The team had toiled hard and Long to cross this milestone that is afantasy to any entrepreneur or founding group.

A new phase of entrepreneurship: "A pubLic start-up"referring to CL being Listed whiLe having the enthusiasm and energy of a start-up is how Isee the year gone by.

The end of life as a private company entrepreneur aLso marked thebeginning of a new chapter in our lives. As they say you need to die to go to heaven. Ina similar way if we need to get to the nirvana of a large and respected listed companywe needed to go through the journey of the past one year.

The attributes the parameters the way to view the business haschanged significantly in my own mind overthe past year. In many ways we are gettingheaLthier and stronger by the day in my view. The focus on asset-lightness ROCE growthetc. are of a different order now. Yet we aLso are very mindfuL of the fact that ineducation it is a medium term to Long term business. India continues to present a verysignificant opportunity for an education services pLayer who has some of the abovementioned attributes. I sincereLy look forward to this challenging journey as a listedentity to make it a rewarding one for aLL including the shareholders.

Some of the big rocks of 2017-18 were:

Consumer business

Big test prep segments added:

Together GATE CA and CiviL services add up to a market size of aLmost2.0-2.5 million aspirants. The current mainstays of CL test prep (MBA and Law) incomparison add up to a market size of 250000 (or 0.25 miLLion). That's one big rock wehave moved in the past year.

Post IPO we added three significantly large segments of test prepincluding GATE (ICEGATE) CA and IAS (Eten). These acquisitions have happened at variouspoints in time during the year. The business and culture integrations on the ground theoptimization of costs including that of manpower technology and Go to Market etc. havetaken longer than what we had planned for.

The Eten Business has now been consolidated under the common networkbusiness head and all redundancies removed. We are aLso moving towards adoption of newertechnologies thus reducing bandwidth requirements and costs. With operations and networkattrition having stabilized and a rationalized operating structure in pLace by integratingthe existing network and Eten network under a common business head we are Looking forwardtowards cost rationalizations too.

On an annuaLized basis these acquired businesses have aggregated toabout 20 crores of revenues in 2017-18 of which onLy about 10 crores has accrued to CL(timing of the deal and minority adjusted). On the other hand aLL the investments havehappened as envisaged whose benefits are likely to be visible over FY2019. In short theabove mentioned test prep acquisitions were in investment phase in three significantlylarge market segments. If executed well these couLd turn into net cash generatingproducts in a year. At worst two.

Over a three year perspective these three have the potential toovertake the revenue contribution by MBA and Law. More interesting ways of bulking ofrevenues and profits is a distinct possibility in the super-fragmented market that testprep is.

Focus on tech-Led scalable products:

We increased our stake in Accendere from 51pc to lOOpc invested intech backbone and taken this research collaboration platform to about 35000 innovatorsnow sourced from over 100 universities and a dozen corporates. The version2 of wainconnectplatform was launched. This pLatform has begun to contribute to margins already. Thegrowth of wainconnect will add a significant business size as well as not- easy-to-repLicate moat around our business. The implementation of National Institutional RankingFramework (NIRF) by the Government in 2016 has added a compelling factor into thebehaviors of colLeges and universities. This business adds to our reach into theuniversities even for the core business.

Corporate business:

The institutional and corporate business is looking more and morerobust with continuous expansion of the client / customer base and addition of many 1sttime Large & strategic customers. Our continuous endeavor for the past few year ofmaking investments in creating new technology products and owned IP property has nowstarted paying off. During the Last year we created two new properties Inquizitive Mindsone of the largest Quiz shows of the country with a reach to over 1000 schooLs andcoLleges and MeLting Pot. We continuously work towards enhancing our customer base andproduct offering to enable a robust and profitable growth over the next couple of years.For corporate business we have expanded to 2 more international geographies with openingof Offices in Dubai and US.

How does the future look?

Three factors that continue to augur well for a company Like CL are:

1. Rising Disposable incomes and focus on education:

India's GDP is expected to doubLe from US $ 2.5 trillion in 2018 to US$5 trillion in 2025 and per capita Income wouLd move from about US$ 1900 per person toabout US$ 3600 per person. With such a dramatic increase in income the disposable incomefor a Large segment of the population would increase even more significantly resulting infar greater spend in Education and Education related Services

Consumption of educational or test prep services will continue to risein the Light of more disposable incomes across various strata of the socio-economicpyramid. This spans both urban and rural geographies. The fact that education isculturally vaLued is an added sweetener for a consumer driven company like CL.

2. Broadband and Internet penetration:

India had am internet penetration in June 2018 to about 500 millionpeopLe of which about 60% was claimed to be broad band with 3G or 4G connectivity. This isexpected to rise to about 830 Million peopLe with internet access by 2021 with a largerproportion of population being on 4G by 2021 and some seLected population on even 5G.

In such a scenario the ability to launch program and take it to theconsumers in different formats (in CL centers and into homes and mobiLe devices) becomesan easier proposition. These two segments (@center and @home/devices) are independentcustomer segments and CL wilL stay focused on catering to both these groups with equalvigour and customization's.

3. Rapidly evolving career landscape:

Newer courses newer careers newer exams emerging professionalcertifications which may be termed continuous education /skiLL upgradation are aLL whitespaces that will see sustained action over the next few years as India grapples withchallenges such as employability for the youth and continued empLoyability ofprofessionals. This is an opportunity for CL Educate by staying close to her knitting orstrengths namely (i) understanding of subjects/ exam patterns (ii) pedagogy (iii) deLivery(physical and digital) and (iv) data anaLytics for better outcomes.

In sum I wouLd urge you to look at China as an economy and theemergence of giants in education such as New OrientaL TAL Education VIPKid etc over thepast decade. My beLief is that India will also see the rise of such successful Listededucation services companies over the coming 5-7 years. That might be a Long perspectivefor a short term investor. However for a company like CL that's the perspective thatweighs heavily in my mind when I am taking decisions on a day to day basis. At the sametime we are absolutely mindfuL that we need to win the battLe every year to be able tosee our progress to such heights.

With appreciation

Satya Narayanan .R