India is 2nd largest e-learning market after US; the segment has to grow at 50% for next 5 years: A Kumar, Zee Learn

Zee Learn is large diversified Education company and we have a significant presence in most segments of the Education sector and cater to the entire lifecycle of people’s learning needs, says A Kumar, Managing Director, Zee Learn. In a candid chat with Dimpy Kalra, Zee Business, Mr Kumar said, “Zee Learn’s consolidated total revenue has grown 5.2 times from Rs132 crore to Rs549 crore between FY14-FY19. Excerpts:

Q: You had a very good quarter. Can you tell us a bit about how your company has performed over the last few years?
A: FY15 to FY19, Zee Learn’s consolidated total revenue grew from Rs132 crore to Rs549 crore that is 4.2 times and a CAGR of 43%. In the same period, the consolidated EBITDA grew from Rs30 crore to 158 crore that is 5.2 times and a CAGR of 53%. Almost every quarter consistently we have posted very good results. Our profitability in our core business has constantly increased due to high operating leverage and the EBITDA margin is now 52%. We have also graduated from being present only in core education to supplementary education as well thus becoming a truly holistic education player now. The Indian education sector is a 180 billion $ market right now and continues to grow in double digits given our higher propensity for education and government’s significant spend in this area and hence there is good scope for further growth in our business.

Q: Can you tell us a bit about various parts/offering of your business?
A: Zee Learn is a large diversified Education company. We have a significant presence in most segments of the Education sector and cater to the entire lifecycle of people’s learning needs. For the younger children, we have around 2000 Pre Schools and Daycare centers under the brand names like Kidzee, Mount Litera Junior, Mount Litera World Pre School and Anukram and are the largest such chain in Asia. We also have Digital offerings like Kidzee App and Kidzee Tabs to ensure that the learning for these children extends beyond the school as well.

For the grown-up children, we have around 130 K12 High Schools under the brand name Mount Litera Zee Schools which is among the largest K12 chains in India. We have offerings in the Test Preparation area with around 160 centers and cater to students preparing for Engineering, Medical, MBA and CA through our Lakshya, Chitale classes and MT Commerce brands.

We have offerings in 8th-12th Tutorial classes with around 100 centers in around 50 cities and cater to students of State boards, CBSE and ICSE through our Mahesh Tutorial, MT Science, MT Commerce, Sri Gayatri and Aryan brands.

We have offerings in Training and manpower area with our Liberium Brand and offer innovative and customized solutions to corporates. We have offerings in the area of Vocational and Skilling with brands like Zee Institute of Creative Arts (ZICA), Zee Institute of Media Arts (ZIMA), Zee Institute of Design Arts (ZIDA), Teachers Training and we also work with various government ministries for skilling projects. In the Higher Education area, we are associated with the leading state private university in Dehradun called the Himgiri Zee University.

Q: What is your area of operations and what sort of job creation have you done?
A. We have around 4 Lakh students studying with us in 2,500 schools/centers in 800 cities and have a very strong pan India presence. We have around 50,000 teachers, trainers and staff associated with us across the country.

Q: What is unique about the education delivery in your schools?
A. In the Core education sector, our Kidzee and Mount Litera Schools use our excellent proprietary curriculum called Illume and Litera Octave. These ensure excellence in both academics and extra-curricular activities, ensure the holistic development of the children and make them truly global citizens while being in close touch with their roots.

In the Supplementary education sector, our brands like Mahesh Tutorial, Lakshya, MT Commerce, MT Science etc. use the highly innovative Robomate App and R+ notebook Digital platforms to ensure that each child becomes self-sufficient and can realize his true potential. As a result of our path-breaking pedagogy and delivery model, we have been consistently awarded multiple awards like India’s Most Attractive Pre School Brand, India’s Leading Education Brand, Franchisor of the Year, Brand Excellence in Education etc.

Q: What new things are you planning for your Company from the Business and Financial perspective? What is the balance sheet of the company and also update us about its debt and plans to reduce it?
A: Generally, companies in this segment are asset-light but their asset turns heavy when they start entering school properties. So, when we started with school business then we

So, at the time when we started with the school business then we had 7-8 schools of our own and they were created at an investment of around Rs800 crore. Now, we want to be an asset-light company and that’s why our board has passed an enabling in-principle resolution to divest the real estate assets of Rs800 crore and we have started the work and will complete the work soon. We have a debt of around Rs400 crore and the money collected from this disinvestment will be used in bringing down our debt levels to zero. Our ultimate goal is to be debt-free. The remaining money will be used in two-three different areas like we will strengthen our pre-school and day-care centers brand Kidzee and take it to new places by tying up with new people. Secondly, we will also focus on our manpower and training Liberium company, which is an attractive segment because less capital is required in it and return on capital employed is more in it. Last but not the least, it is a time of digitization and our 100% of our business is digitized but we like to invest more on our digital portfolio like Kidzee app, Kidzee tap, Robomate, R+ notebook etc. to connect with our students who can’t attend the school due to any reason. This will strengthen our financial positions and help us in moving ahead in our business.

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Q: How do you see your company 3-4 years from now?
A: As a good corporate company, we make our medium-term plans. So, we have made a medium-term plan for 2023 and have projected a good growth, organically, and are hopeful that we will be able to achieve it. As part of the Medium-Term Business Plan, we should organically be at a Turnover of Rs1,950 crore from Rs550 crore and an EBITDA will rise to Rs750 crore from Rs160 crore. Also, by FY23, our Schools/Centers should increase from 2,500 to 4,500, our presence should go up from 800 to 1,200 cities and our student numbers should increase from 4 Lakhs to 10 Lakhs.