Veranda Learning Solutions is targeting revenues of around Rs 600 crore in FY25, with Ebitda expected to double from the Rs 65 crore achieved in the previous fiscal year.
In FY24, the company’s revenue more than doubled to Rs 362 crore, up from Rs 161 crore in the prior year, aided by inorganic expansion. The company achieved an Ebitda of Rs 65 crore in FY24 compared to losses in FY23. While it reported a net loss of Rs 76 crore, this was a slight improvement from the net loss of Rs 79 crore in FY23.
Despite the operational turnaround, the company’s stock has underperformed. Veranda Learning’s CEO, Suresh Kalpathi, attributed this to the relentless negativity surrounding the edtech space over the past two years. “With a lot of negative news coming out around some players in the past two years, the entire sector was seriously devalued,” Kalpathi told Fe.
“Much of the investor frenzy around some of the leading online education startups pre-2022 led to high valuations based on expectations rather than actual value. Once that euphoria faded amid concerns around lofty valuations and corporate governance issues at certain players, investor money started drying up for the entire sector,” Kalpathi added. “This skepticism, coupled with increased interest in emerging sectors like defence and AI, among others, led to edtech being relegated to the background.”
Kalpathi, however, remains optimistic about Veranda’s future trajectory. “We had indicated that we’d deliver a strong FY24 operating performance, and we have. Some of the brands we have acquired have a legacy of 10-40 years with strong recall. A lot of the acquisitions we made before FY24 have already started paying off, which is reflected in our FY24 numbers,” he said.
Kalpathi highlighted Veranda’s acquisition of the 40-year-old JK Shah classes, which provides coaching for chartered accountancy, as an example of its strategy to buy profitable, reputable education brands with long operating histories. “It was one of the few companies that we acquired which actually had Rs 100 crore of cash, forget having zero debt,” he said.
“We now need to pause and demonstrate to the market that we are not a player who just aggregates numbers but that we build value and bring in operational efficiencies. Today we are in most of the spaces we want to be in. It’s now a question of organically building out the depth in each vertical and creating synergistic value across our ecosystem,” the CEO added.
Kalpathi is confident that consistent delivery on operational and financial metrics will rebuild investor confidence in Veranda’s business model. “Hopefully, some of that will slowly start reflecting. Because I think to an extent, the market wants to see proof of performance. We have shown good signs in FY24, and are confident of building on it in the coming year,” he said.