investor presentation q1 results - ixicse.maheshtutorials.com/images/investor/q1.pdf · 2010 2011...
TRANSCRIPT
Investor Presentation – Q1 Results
The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of this information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by MT Educare Limited (MTEL). This presentation may contain ‘forward - looking statements’ – that is, statements related to our future, not past, events. In this context, forward - looking statements often address our expected future business and financial performance and often contain words such as ‘expects,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes,’ ‘seeks,’ or ‘will.’ Forward – looking statements by their nature address matters that are, to different degrees, uncertain. For us, the uncertainties arise from the change in consumer behavior, trends in financial markets, integration of acquired businesses; and from various matters outside our control environment which include both regulatory and non-regulatory in nature. These uncertainties may cause our future results to be materially different than those expressed in this presentation. We do not undertake to update our forward – looking statements
Disclaimer
2
Index
3
Business Overview
Key Differentiators
Industry in a growth phase
Q1 Results and Financial Overview
Shareholding Pattern
51
188
2007 2012
27,324 29,227 31,774
11,240 11,52714,524
14,16317,546
20,236
2010 2011 2012
School Section Science Section Commerce Section
Coaching services being provided by Mr. Mahesh Shetty since
1988 under the brand name ‘MAHESH TUTORIALS’
Diversified product offering from school tutorial to
vocational trainings
Network consists of 196 coaching centres across 4 states of
which 14 are franchisees and rest are company managed
One of the leading coaching service providers in
Maharashtra with 147 centres in Mumbai.
66,534 students serviced* in FY12; 870 faculty as of June 30,
2012 at owned centres. Additionally, 164 resident faculty
Helix, the private equity investor, invested in the company in
November, 2007. Listed in April 2012
Growing No. of Centres
Rising Number of Students Serviced* With Large Pool of Faculty Member
58,300 52,727
5
502209
181School Section
Science Section
Commerce Section
Additionally, 164 faculty members as resident faculty members
* - The number of students from whom revenue has been recognized, in whole or part, based on the distinct courses availed by them during the relevant fiscal in the coaching centres operated by the company
‘Result oriented’ education support and coaching services provider
66,534
Franchisee Students Serviced not included
Business Overview
Science Section Commerce Section Others School Section
XIth and XIIthstandard
Test prep for the
engineering and medical
entrance examinations
XIth and XIIthstandard
Bachelor degree in
Commerce (UVA)
CA-IPCC , CA Final, CA-CPT
CS-Entrance
IXth and Xth standard
Maharashtra, Gujarat,
Karnataka State Board
CBSE
ICSE Board
INK VIII
Study Mate*
Coaching for Masters in
Business Administration
degrees
Government Programmes
Preschool, etc
6
In the Secondary and Higher Secondary School Pursuing graduate degrees
Undertaking CA examinations.
A coaching services provider for students…
Preparing for competitive examinations
* - Coaching services at six locations in Delhi and Gurgaon through a joint venture with HT Education Ltd.
Business Overview – Capturing the entire Value Chain
7
CA,
MBA
Basic Graduation – UVA (FY SY and
TY)
Entrance Examinations – ISEET, NEET, CA-CPT,
CS - Foundation
Junior College (Std XI and XII)
School Section (Std. VIII to X) – State Boards, CBSE, ICSE
Creates a strong goodwill
and base for future growth
Test-Prep Business across education spectrum
Graduation courses supported by skill development programs
Major Professional Courses
Junior Colleges: Management Contracts
Servicing students throughout their education cycle
Strong base ensures enough Capacity for higher end courses
Location of Centres
8
Mumbai, Mah. State Board • English Medium - 56 • Marathi Medium - 12 ICSE - 8 CBSE - 11 XI, XII and CET - 28 XI, XII and CPT, Graduate Courses, CA IPCC, CA Final - 32
► Gujarat Secondary and Higher Secondary Education Board - 3
► XI, XII and CET - 2
Rest of Maharashtra Mah. State Board • English Medium - 14 ICSE - 2 CBSE - 3 XI, XII and CET - 12
Karnataka Secondary Education Examination Board - 5 XI, XII and CET - 5
Tamil Nadu CA
147
31
10
5
3
9
Location Count Reconciliation
Particulars Nos.
As of 1st April 2012 110
Less: Closed Locations
On Relocations 5
Actual Closures # 5
Add: New Locations
On Relocations 9
Fresh Locations 7
As of 30th June 2012 116
New Locations added during the quarter: Mumbai - 5 Pune – 4*
*The addition of 4 locations in Pune was under agreement entered into with Behere’s Commerce Coaching Classes for sharing of infrastructure facilities and involved no regular capital expenditure for setting up a center. # - Four out of the five closures during the quarter are on account of closing down franchisee locations.
Coaching Centre A unit where coaching services are provided by our Company for a particular stream (Science, Commerce, CBSE, ICSE etc.) More than one coaching centre may exist at the same coaching location.
Coaching Location Physical location where coaching services are provided.
10
New Avenues of Growth
• In the last quarter, the company has entered into two new agreements for PU College Tie-ups in Karnataka in Tumkur & Hubli. As of 30th June 2012, the total number of PU College Tie-ups in Karnataka stands at 5. • The company had also entered into an agreement with Bunts Sangha to provide integrated college education & test prep coaching in the college in Fiscal 2012. Post degree college admissions in June, the first batches of the integrated college course have already started. • MT Educare entered into a tie-up with Behere’s Commerce Classes, one of leading coaching services provider in the city of Pune, whereby MT Educare will utilize its infrastructure to provide coaching to students of Std. IX, X and Std. XI and XII in the Science Stream on a revenue sharing basis. This enables the company to expand its reach without incurring any incremental capital expenditure. Also, MT Educare has entered the higher CA market in Pune in this quarter. • Content can be considered as one of MT Educare’s biggest strengths and planned monetization by way of sale of educational CDs containing Std. IX and X content in digital format is underway.
Organized and Diversified Player
Large Pool of Quality Faculty
Members
Result Oriented Quality Methods
of Coaching
Corporatized Structure and Experienced
Management Team
No one man show or ‘Star Teacher’ concept 12
Key Differentiators…
Well Recognized Brand &
Experience
7 of top 35 in CA Final
May 2012
20+ students > 90% in HSC + CET
Mar 2012
1,556 scored ≥ 90% in Xth Std. Exam
A.Y 2012
147 Centers at 93 locations in Mumbai
Jun 30, 2012
Currently operates 35 centers at in Rest of Maharashtra, T.N. , Gujarat & Karnataka
14 Franchisee Centers
1,034 faculty members
300+ faculty Post Graduates (CA, BMA, B.Ed)
Multiple faculty teaching each subject
Continuous training
Increased visibility amongst governments and international educational institutions
Assisted in raising capital from private equity investors
Scientific coaching methods and system
Focus on conceptual knowledge and holistic development
Technology to supplement coaching
Jun 30, 2012
Career Counselling:
Through seminars and exhibitions
Symphony:
A mix of music, yoga and diet controlling techniques to reduce stress, enhance memory and improve communication skills.
Hum Se Poocho:
A 24 hour helpline during exam time.
Counselling Sessions:
To facilitate communication between the teachers, students and parents on the students’ requirements.
Value Added Services
Prepared by faculty heads from reference material
Theory and concept of various subjects are addressed in an efficient and simple manner
Unique Study Material
Based on experimental learning
Audio Visual Technology, Animation & Graphics
Conducive environment
Leads to greater retention
Interactive Course Delivery
Close attention to individuals’ needs & helping them in their day-to-day academics
Close monitoring of the attendance
Regular parent-teacher meetings
Close Monitoring and Reviewing
Series of tests and examinations are conducted for each course
Printed model answer paper, along with the marking scheme
Mock board examinations for school section
Tests & Examination Series
COURSE
DELIVERY
PROCESS
13
…Teaching Methodology
Large Addressable Market
15
24,418
40,187
75,629
2006-07E 2010-11P 2014-15P
Market Size - Classroom based coaching industry
Rs. Cr
13% CAGR
17% CAGR
Rising disposable income
Increasing household spend
on education
Infra bottlenecks for formal education
Increasing private sector participation
Growth in addressable market
INDIAN EDUCATION SYSTEM
Informal Education
Vocational Education
Formal Education
Open & distance learning
Multimedia in Pvt Schools
ICT in public schools
Play School
Higher Education
K-12 Coaching Classes
The Indian coaching industry is expected to grow from Rs. 40,187 crore in 2010-11 to Rs. 75,629 crore in 2014-15.
Strong structural factors aiding the growth of this sector A large market opportunity
No. of Students appearing in various examinations
Source: Crisil Source: Crisil
Source: Websites of JEE, IIT Delhi, AIEEE, MHRD, Annual report of ICAI, Maharashtra Directorate Of Medical Education and Research
1,325,936
1,061,566
769,929
1,065,100
468,240
282,096
135,617
574,259
120,195
100,151
80,077
0 400,000 800,000 1,200,000
MSB Higher Secondary
CBSE Xth
CBSE XIIth
AIEEE
IIT JEE 2011
Com Ent Exams, Mah.
All India Pre Med/Pre-Dental Test …
CA CPT
CA PCC
CA IPCC
CA Final
Comfortably positioned in the industry
16
India - Bifurcation of Avg. Annual Education Exp. per reporting student
Private
Coaching28%
Tution
Fee
32%Transport
17%
Books/
Stationery8%
Uniform6%
Exam
fees/ payments
6%
Others
3%
Private
Coaching
37%
Tution
Fee
29%
Transport
15%
Books/ Stationery
7%
Uniform5%
Exam
fees/
payments4%
Others
3%
Maharashtra - Bifurcation of Avg. Annual Education Exp. Per reporting student
Maharashtra Coaching market size and growth
Highly competitive organized market to stabilize price
High cost of operation (especially real estate)
Rising CET enrolments
Highest share of B.Com & CA enrolments
Highest penetration of organized coaching
3,2814,085
5,096
2010-11P 2012-13P 2014-15P
Largely private tution based coaching market
Low base of CA (commerce) market
Rising CET enrolments
Science stream dominated market
Increasing higher secondary enrolments
1,0671,375
1,773
2010-11P 2012-13P 2014-15P
Karnataka Coaching market size and growth
(Rs. Crs.)
(Rs. Crs.)
Source: CRISIL
Q1 FINANCIALS – STANDALONE AND CONSOLIDATED
18
Particulars
For the quarter ended 30th June,
2012
For year ended 31st March, 2012
For the quarter ended 30th June,
2012
For year ended 31st March, 2012
Standalone Consolidated
Fee Income 3,470.19 12,491.11 3,552.54 12,715.34
Other Operating Income 147.25 341.09 138.19 342.01
Total Revenue 3,617.44 12,832.20 3,690.73 13,057.35
Direct Costs 2,100.95 6,756.15 2,145.07 6,977.15
Personnel Costs 523.34 1,760.71 538.78 1,798.68
SD&A Costs 565.14 1,934.05 573.75 1,971.13
EBIDTA 428.01 2,381.29 433.13 2,310.39
Finance Costs 0.32 4.79 0.32 4.79
Depreciation 208.39 763.81 214.08 781.63
Other Income 139.36 404.49 135.19 396.75
PBT 358.66 2,017.18 353.92 1920.72
Income Tax 106.10 640.45 106.10 636.73
PAT (Before Minority Int.) 252.56 1,376.74 247.82 1,284.00
Minority Interest - - 0.15 (39.19)
PAT 252.56 1,376.74 247.67 1,323.19
` in Lakhs
Seasonality of Business
19
Strong seasonality in Revenues and Margins due to diverse product offerings across quarters
Q1
Q2
Q3
Q4
Apr - Jun
Jul - Sep
Oct - Dec
Jan - Mar
21%-23%
20%-22%
24%-26%
32%-34%
Fees %
Key Contributors to Fee Income
IX, X (PY and CY batches), XII + Test Prep (PY Sci. and Comm. batches)
IX, X (PY and CY batches), XI + Test Prep (CY Sci. and Comm. batches), XII + Test Prep (PY Sci. and Comm. batches)
IX, XI + Test Prep (CY Sci. and Comm. batches), XII + Test Prep (CY Sci. and Comm. batches)
X (CY batches), XII + Test Prep (CY Sci. and Comm. batches), Higher CA
Expenses being more or less fixed in nature are spread evenly across quarters
Accordingly, margins in Q2 and Q3 are significantly higher than Q1 and Q4
* PY Batches represents batches commenced in previous fiscal and completed in current fiscal. CY batches represents batches commenced in current fiscal and completed either in current fiscal or subsequent Fiscal/Fiscals. Large majority of CY batches begin start from Q2 onwards.
20
Key Financial Trends
7,316
8,322
10,551
13,057
3,691
922 1,247
1,902 2,310
433 273 475 812 1,323
248
13% 15%
18% 18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
FY 09 FY 10 FY 11 FY 12 Q1 FY 13
EBID
TA M
argi
ns
(%)
` in
Lak
hs
Revenue, EBIDTA & PAT
Revenue EBIDTA PAT EBIDTA Margins
Revenue
21% CAGR
EBIDTA
35% CAGR
PAT
68% CAGR
Over the last 4 years..
21
Key Balance Sheet Trends
(1,683)
(2,778) (2,994)
(2,623)
(3,379) (3,263)
(3,807) (3,870)
(4,899) (5,228)
(6,000)
(5,000)
(4,000)
(3,000)
(2,000)
(1,000)
- FY 08-09 FY 09-10 FY 10-11 FY 11-12 Q1 FY12-13
` in
Lak
hs
Net Current Assets (Excluding Cash & Cash Equivalents & Investments in Mutual Funds) Advance Fees
8%
12%
18%
25%
11%
17%
28%
35%
0%
10%
20%
30%
40%
FY 08-09 FY 09-10 FY 10-11 FY 11-12
ROE ROCE
Operating at negative working capital Improving Return Ratios
Mangalore PU College Capital Expenditure Update: The total amount spent on the construction of PUC Campus at Mangalore PU College up to 30.06.2012 is `1,676.17 lakhs.
22
Division Wise Revenue - Standalone
Q1 FY 12-13 FY 11-12
Revenue (` in lakhs) 749 3,263
No. of Students Serviced*
7,006 14,524
Centres at period end 41 35
Scie
nce
Q1 FY 12-13 FY 11-12
Revenue (` in lakhs) 696 2,639
No. of Students Serviced*
10,383 20,236
Centres at period end 37 37
Co
mm
erc
e
Q1 FY 12-13 FY 11-12
Revenue (` in lakhs) 1871 6,004
No. of Students Serviced*
21,677 31,774
Centres at period end 104 97
Sch
oo
l
•No. of Students Serviced represents students coached for a course during the period under consideration. While a student is included in the no. of students serviced from the start of the course, the corresponding revenue for that student is accrued evenly over the course duration. Thus, the revenue recognized for the student builds up as the financial year progresses which is reflected by the annual average fee realization per student being higher than the average fee realization for the interim periods. The average fee realization per student serviced for the period under consideration is not comparable with the average fee realization for the full year.
Q1 FY 12-13 FY 11-12
Revenue (` in lakhs) 301 927
Oth
ers
Others consists of income from management fees, Dubai, Govt. Projects, Global Champs & Franchisee Income.
Shareholding Pattern – (As at June 30, 2012)
24
Category No. of Share
Holders
Total No. of Shares
% Share-holding
Promoter & Promoter Group
1 16,956,885 42.88
Mutual Funds / UTI 22 2,017,879 5.10
Foreign Institutional Investors
8 1,731,622 4.38
Bodies Corporate 124 3,365,549 8.51
Individuals (Nominal Capital < ` 1 Lakh)
2437 1,434,697 3.63
Individuals (Nominal Capital > ` 1 Lakh)
71 9,633,143 24.36
Other 122 4,408,097 11.14
43%
4% 5%
28%
9%
11%
Promoter & Promoter Group Companies
FII / FFI
FIs / Banks / MF
Retail Investors
Bodies Corporate
Others
Thank You