Chennai, 14th February 2025: Veranda Learning Solutions Limited, a public listed Education company (BSE: 543514, NSE: VERANDA) and a pioneer in the industry offering end-to-end Education services and solutions, announced its financial results for the third quarter and nine-month period ended December 31, 2024. During the quarter, the pre adjusted operating revenue stood at Rs. 110.33 crores, reflecting a 20% year-on-year growth from Rs. 91.84 crores. The company has achieved an EBITDA of Rs. 11.96 crores adjusted for one-time impacts. Overall, the total pre-adjusted operating revenue for 9MFY25 stood at Rs. 367.93 crores, as compared to Rs. 259.12 crores in 9MFY24.
Q3FY25 was impacted by a combination of academic and market factors. On one hand, delays in notifications by Government for the competitive exams relating to public sector hiring impacted revenues. On the other hand, changes in the CA exam pattern and delayed results announcement led to lower-than-expected enrolments & delayed bookings, shifting revenue recognition to the upcoming quarters. The lower CA foundation pass rates affected student demand, with only 13,000 students passing in 2024 compared to over 40,000 in 2023. However, these challenges are transient in nature and are expected to normalize moving forward.
Veranda 2.0 – Veranda Learning Solutions has successfully executed the first phase of its growth strategy, which focused on rapid scale-up through the acquisition of marquee brands. As the company transitions into the second phase—integrating these acquisitions, unlocking synergies, and driving organic growth—it has undertaken a one-time, comprehensive review of all the businesses as well as assess and standardize practices across companies.
In addition, Veranda has adopted conservative estimates for expected credit loss, aligning such estimates at its subsidiaries with the parent company. During the current quarter, based on the prevailing business environment and with the objective of enhancing synergies between its business units, some subsidiaries have renegotiated their existing contracts and arrangements as well as reassessed the useful life of certain intangible assets, leading to accelerated amortisation of these assets.
Additionally, Veranda has considered impairment of certain assets considering the current and future pipeline of revenue contracts, and global challenges in the territories and industries in which its customers operate. Further, legal advisory costs that are one-time in nature were also accounted for during this quarter, in line with the repayment of related financial liabilities.
While these adjustments have led to a short-term one-off impact mostly non-cash in nature, Veranda has made significant progress in fortifying its operational foundation. With disciplined risk management, improved gross margins, and a more streamlined business model, the company remains set for long-term growth and has set the stage for a strong performance in the coming quarter and coming financial year.
Key Segment Wise Operational Highlights:
1. Academics:
Veranda’s academic segment, which provides management and support services to K-12 schools, presently services five CBSE schools and two international Cambridge schools
9MFY25 result review –This Segment grew its revenue to Rs. 20.57 crores this year. During the same period the EBITDA grew from Rs. 3.41 crores to Rs. 11.48 crores. EBITDA margin stood at 55.79%.
Operational Outlook: The full year EBITDA is expected to scale to over Rs. 15 crores. Plans to sign up and manage five new schools in Q4FY25 with significant increase in numbers of schools planned over the coming years.
2. Commerce Test Preparation:
JK Shah Classes recorded a 26.87% year-on-year revenue increase in 9MFY25, with EBITDA reaching Rs 36.55 crores.
9MFY25 result review – The overall Commerce segment grew its revenue from Rs. 82.27 crores to Rs. 138.20 crores year-on-year. During the same period the EBITDA grew from Rs.30.26 crores to Rs. 60.92 crores.
Operational Outlook: Recent acquisitions of BB Virtuals and Navkar Institute will fuel expansion in both online and offline markets. The company is also expanding its managed commerce colleges with a target of tying up with 100 new colleges in the coming years. With the addition of these assets to the Commerce segment, the proforma revenue is expected to be Rs. 280 crores and proforma EBITDA of Rs. 113 crores.
3. Government Test Preparation:
Veranda RACE revenue recorded a 34.72 % year-on-year growth in 9MFY25, with future growth planned through geographic expansion
9MFY25 result review – This segment grew its revenue by 39.85%, increasing from Rs. 80.80 crores to Rs.112.99 crores, contributing 30.71 % of the total revenue.
Operational Outlook: The company is targeting significant growth through expansion of its product offerings in government exam preparation segment.
4. Vocational Training:
Veranda’s vocational training segment, powered by brands like Edureka and Six Phrase, continues to thrive. This segment leverages Veranda’s existing student base to cross-sell vocational courses.
9MFY25 result review – This segment grew its revenue from Rs. 86.09 crores to Rs. 95.92 crores year-on-year and EBITDA grew by over 70% compared to the same period last year.
Operational Outlook: EBITDA growth for this segment is expected to be driven by leveraging cross-selling opportunities within the group. Revenue for the full year is expected to be Rs. 129.48 crores.
Consolidated Financial Highlights:
| Particulars (Rs. Crores) | Q3 FY25
|
Q3 FY25
(Pre Adj.) |
Q3 FY24 | Y-o-Y | Q2 FY25 | Q-o-Q | 9M FY25
|
9M FY25
(Pre Adj) |
9M FY24 | Y-o-Y | |
| Revenue from Operations | 99.15 | 110.33 | 91.84 | 20% | 138.62 | -20% | 356.75 | 367.93 | 259.12 | 42% | |
| Other Income | -0.77 | 1.23 | 3.51 | 1.83 | 8.49 | 10.49 | 6.99 | 50% | |||
| Total Income | 98.38 | 111.56 | 95.36 | 17% | 140.45 | -21% | 365.24 | 378.42 | 266.11 | 42% | |
| Gross Profit | 51.49 | 62.67 | 55.06 | 14% | 84.17 | -26% | 208.10 | 219.28 | 150.07 | 46% | |
| Gross Profit Margin (%) | 51.93% | 56.80% | 59.95% | 60.72% | 58.33% | 59.60 | 57.92% | ||||
| Operating Expenses | |||||||||||
| Advt. & Business Promotion | 14.05 | 14.05 | 10.62 | 32% | 15.83 | -11% | 45.93 | 45.93 | 35.36 | 30% | |
| Corporate Costs | 6.35 | 6.35 | 5.35 | 19% | 6.22 | 2% | 18.43 | 18.43 | 10.11 | 19% | |
| Other Expenses | 30.06 | 30.06 | 23.16 | 30% | 31.43 | -4% | 90.13 | 90.13 | 67.13 | 47% | |
| Non-Operating Expenses | |||||||||||
| ESOPs/RSU | 1.49 | 1.49 | 2.25 | -34% | 2.12 | -30% | 5.31 | 5.31 | 4.89 | -1% | |
| One time expenses | 32.18 | – | – | – | 32.18 | – | – | ||||
| EBITDA | -33.40 | 11.96 | 17.19 | -30% | 30.40 | -61% | 24.61 | 69.97 | 39.57 | 77% | |
| Finance Cost | 33.20 | NA | 19.91 | 33.23 | 96.35 | NA | 38.67 | ||||
| Depreciation | 25.07 | NA | 17.70 | 24.22 | 71.63 | NA | 42.82 | ||||
| Depreciation One Time | 114.47 | NA | 114.47 | NA | |||||||
| Tax Expenses | -3.21 | NA | -3.71 | 3.32 | – | 0.62 | NA | -4.34 | |||
| PAT | -202.94 | -16.71 | -30.37 | -258.46 | -37.57 | ||||||
Key Consolidated Financial Highlights:
- Total Income (Pre-Adjustment) for Q3FY25 stood at Rs. 111.56 crores, marking a 17% year-on-year growth from Rs. 95.36 crores in Q3FY24 ,while maintaining Gross Margin of 56.8%. Total Income (Pre-Adjustment) for 9MFY25 grew to Rs. 378.42 crores, representing an impressive 42% year on year growth , driven by strong performance across the business segments.
- The EBITDA (Pre Adjustment) for the quarter stood at Rs. 11.96 crores reflecting the typical seasonality of the third quarter, which has historically been a lean period. Additionally, delays in government exam notifications, changes in the CA exam pattern and results have led to a deferral of bookings into the subsequent quarter. However, this is expected to normalize moving forward.
- For 9MFY25 , EBITDA (Pre-Adjustment) reached Rs. 69.97 crores, marking a substantial 77% year-on-year increase from Rs. 39.57 crores in 9MFY24, highlighting the company’s strong operational momentum and strategic execution.
- The Finance cost for the quarter stood at Rs. 33.20 crores, which includes Rs.21.30 crores cash interest (including accrued premium) on the NCDs raised by the company and Rs. 7.26 crores in non-cash expenses pertaining to the acquisition related liabilities.
- The Depreciation cost for the quarter stood at Rs. 139.54 crores, which includes a one-time non-cash accelerated depreciation charge of Rs 114.47 crores recorded for intangible assets.
Veranda Learning Solutions – Management Statement on Q3FY25 Performance
Mr. Suresh S. Kalpathi, Executive Director and Chairman of Veranda Learning Solutions, added, “We have made strong progress towards our goal of becoming a leading education company. I am pleased to announce that we have successfully completed the first phase of our strategy—building a portfolio of strong brands and offerings that encompass the entire lifecycle of a student. With this, we mark the end of our acquisition-led growth phase and now embark on the next phase, which will be largely driven by the organic expansion of our current offerings. Additionally, we will leverage synergy benefits through brand extensions and resource sharing.
As we consolidate our acquisitions, we have conducted a comprehensive strategic review of our existing practices and intangible assets and set the stage for designing and adoption of industry best practices. This has led to one-time adjustments, primarily non-cash, to adopt a more conservative approach and provide a clearer reflection of our business performance. In this process, we reassessed all assets and identified certain intangible assets for write-off, considering changes in the competitive landscape. This non-cash depreciation adjustment will positively impact the company’s financials going forward.
Furthermore, we reviewed all alliances and acquired businesses, impairing assets with relatively stagnant long-term value and limited growth potential. This strategic refinement allows us to focus our resources on high-potential area while the rationale behind these acquisitions has been realized, and synergies have been leveraged.
Additionally, seasonal factors and shifts in the pattern of exams and notifications have led to a moderate Q3 performance. However, we are confident of a strong performance in the coming quarters as we continue executing our strategic initiatives.”
Veranda Partners with Nursing Europe AS(NE)
Veranda has partnered with Nursing Europe AS to train and place Indian nurses in Europe, addressing critical staffing shortages. This initiative is projected to generate ₹200 crores in revenue over the next 3-5 years. Veranda’s acquisitions enable cross-selling opportunities, from K-12 to vocational training, driving deeper product penetration and operational efficiencies. Veranda Learning remains on track for continued growth, with a focus on expanding its national footprint, strengthening online offerings, and capitalizing on synergies across its diverse portfolio. The company is well-positioned to lead India’s education sector in the coming years.
Veranda Learning Solutions to Raise funds for Strategic Acquisitions and Expansion
Veranda Learning Solutions has announced plans to raise funds through a preferential issue of equity and warrants to fund acquisition of residual stakes in BB Virtual, an online platform for CA aspirants, and Navkar Digital Institute, a leading CA coaching provider in Gujarat. The acquisitions of these brands will help strengthen Veranda’s position in the education sector, particularly in commerce coaching.