Educational institutions' income to rise 11-13% in FY26, FY27: Crisil

Rising enrolments and fee hikes across segments will help educational institutions log an 11 to 13 per cent increase in their total income in financial years 2025–26 (FY26) and 2026–27 (FY27), according to a report by rating agency Crisil.

 

The report added that operating margins are expected to remain steady at 27 to 28 per cent as these institutions will incur higher staff salaries and other related costs.

 

With rising enrolments, institutions will also incur capital expenditure to create additional capacity and improve infrastructure. However, credit profiles are expected to remain stable as strong cash flows will limit reliance on external debt.

   

The report includes an analysis of 107 educational institutions, comprising K–12 (kindergarten to Class 12) and higher education institutions — engineering, medical and other streams — accounting for almost Rs 26,000 crore in income.

 

It stated that FY26 will mark the sector’s fifth straight year of double-digit growth, driven largely by higher household spending on education as incomes improve.

 

The report further stated that the K–12 segment, which accounts for a third of the sector’s revenues, is expected to grow at a steady rate of 9 to 10 per cent, supported by rising urbanisation and affordability, along with annual fee revisions at private schools.

 

Higher education, on the other hand, will see a moderate 3 to 4 per cent enrolment growth in arts, science, commerce and diploma courses that account for the bulk of higher education intake.

 

However, engineering courses will continue to log healthy demand despite turbulence in the job market amid the global slowdown and issues related to visas and immigration restrictions in the United States.

 

In medical education, demand for undergraduate MBBS courses has continued to surpass supply, even as other courses in nursing, pharmacy and physiotherapy, among others, witnessed moderate demand.

 

“The government’s thrust on increasing the number of undergraduate and postgraduate medical seats and augmenting education infrastructure will drive enrolments for medical courses in the near term,” the report added.