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‘We are not done with acquisitions yet’: Veranda Learning’s Kalpathi

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Chennai-based Veranda Learning Solutions, which acquired nearly a dozen companies in the last two years, is looking for more inorganic opportunities to scale up business and to further expand its course offerings.

“As far as acquisitions are concerned, we are not done yet,” said Suresh Kalpathi, Executive Director and Chairman, Veranda Learning Solutions. He was speaking to businessline post company’s Q1 results.

On Wednesday, the company posted a positive EBITDA for the first time at ₹5.64 crore for the first quarter against a negative EBITDA of ₹13 crore in the same quarter of the previous fiscal. Its revenue also doubled year-on-year to ₹69 crore in the latest quarter.

Kalpathi said while the company is open to acquisitions, all future deals will be measured against EBITDA and not just sales or revenue multiples. “We will acquire only businesses that are profitable. We don’t believe in turning around loss-making businesses,” said Kalpathi.

Inorganic growth

The Kalpathi AGS Group-owned Veranda Learning Solutions is built on acquisitions. In November 2020, it acquired Chennai-based test-prep company RACE Academy for ₹100 crore. It was followed by Edureka (₹245 crore) in September 2021. The company also signed a definitive agreement to acquire management test-prep institute, T.I.M.E. for ₹287 crore and CA test-prep provider JK Shah Education in October 2022. In May this year, the company acquired seven ed-tech start-ups valued at ₹400 crore.

With all these acquisitions, the platform today offers a bouquet of training programmes running from competitive exam preparation including State Public Service Commission, to banking, insurance, railways exams, IAS, and CA, and upskilling programmes.

Kalpathi said the acquisitions are beginning to show results in the form of higher revenues and positive EBITDA.

Daily collections

The company is targeting a pro forma EBITDA of ₹100 crore in FY24. Kalpathi said daily cash collections is an important metric to analyse the performance of the ed-tech business and added that the platform’s cash collections have jumped four times to around ₹1.4 crore per day from ₹30 lakh per day last year.

“While we are projecting to double over revenues to ₹400 crore in FY24, our daily cash collections itself is running ahead of that number,” he added.

Veranda Learning’s student enrolment across courses jumped to 4-lakh in FY23 from 60,000 in FY22. Kalpathi said the company is looking to achieve a million student milestone across business units.





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