At a Glance
CL Educate is a quirky mix of test-prep nostalgia and corporate consulting. While the stock has gone nowhere interesting, the company recently bet big by acquiring NSEIT’s Digital Exam business for ₹230 Cr. But with net losses in FY25 and a P/E over 1300, is this a reinvention or just another tuition center with a trust fund?
1. 🪪 Introduction with Hook
Back in the 2000s, if you weren’t carrying a Career Launcher CAT prep book, were you even a serious MBA aspirant?
Fast forward to 2025, CL Educate Ltd is no longer just a test-prep company. It’s now a chaotic cocktail of:
- B2C education (MBA, Law, UPSC coaching)
- B2B digital assessments
- Government consulting (seriously)
- And random overseas subsidiaries in Singapore, Dubai, and Africa that even they’ve started divesting from.
And after spending ₹230 Cr (₹200 Cr debt-fueled) on NSEIT’s exam biz… the company seems desperate to escape the tuition-center identity crisis. But has it worked?
2. 🧠 WTF Do They Even Do? (Business Model)
CL Educate operates across multiple verticals:
| Segment | What It Does | FY25 Highlights |
|---|---|---|
| 🎓 Test Prep (Consumer) | CAT, CLAT, UPSC coaching via 170+ centers | Legacy business; growth stagnating |
| 🏢 Enterprise & Institutional | Corporate training, academic solutions | Institutional clients: 140+ |
| 🧪 Digital Exam Services (New!) | Govt/private sector assessment & certification via NSEIT acquisition | FY26 growth driver |
| 🌍 Others | Global subsidiaries (Kestone Asia, CL Africa), now being sold off | Focusing on India again |
3. 📈 Financials Overview – Profit, Margins, ROE, Growth
Warning: Numbers may cause facepalming.
| Metric | FY25 | YoY Change |
|---|---|---|
| Sales | ₹358 Cr | 🔼 12% |
| EBITDA | ₹22 Cr | 🔻 Slight drop |
| Net Profit | ₹-11 Cr | 🔴 From ₹16 Cr profit in FY24 |
| OPM | 6% | Falling since FY22 |
| ROCE | 3% | Low, but still positive |
| ROE | 0.14% | Broke even and then slipped backward |
The FY25 red ink came despite rising sales, largely due to:
- One-time expenses
- Interest burden from NSEIT buy
- Discontinued product lines
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹96.7 |
| Market Cap | ₹524 Cr |
| P/E | 1385 🤯 |
| Book Value | ₹50.2 |
| P/B | 1.93x |
Fair Value Range (Based on optimistic FY27 EPS of ₹4–6 and 20x PE):
🧮 FV Range = ₹80 to ₹120
So… it’s currently priced within range if earnings return. That’s a big IF.
5. 🍲 What’s Cooking – News, Triggers, Drama
📰 Biggest drama of FY25:
- ✅ ₹231.8 Cr acquisition of NSEIT’s Digital Assessment biz – entire bet on digitization
- ✅ Discontinued unprofitable verticals
- 🚫 Reported FY25 loss
- ⚠️ Received GST demand of ₹12.81 Cr
- 🤝 Reappointed auditors (hopefully not same ones as GoMechanic)
Future triggers:
- NSEIT integration + client ramp-up
- Cross-sell coaching to exam partners (ed-tech meets HR-tech)
- FY26 profitability bounce-back?
6. 🏦 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 | FY24 |
|---|---|---|
| Total Debt | ₹264 Cr | ₹32 Cr |
| Cash & Equivalents | ₹27 Cr | ₹34 Cr |
| Net Debt | ~₹237 Cr | ~₹0 Cr |
Debt-to-equity jumped due to NSEIT buyout. Still manageable if operating profits revive.
7. 💰 Cash Flow – Sab Number Game Hai
| Metric | FY25 | FY24 |
|---|---|---|
| CFO | ₹16 Cr | ₹26 Cr |
| CFI | ₹-245 Cr | ₹-4 Cr |
| CFF | ₹208 Cr | ₹-6 Cr |
| Net Cash Flow | ₹-20 Cr | ₹16 Cr |
So essentially:
Took debt → Bought a business → Burnt cash
Classic “Let’s spend first, profit later” strategy.
8. 🧮 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 2.95% |
| ROE | 0.14% |
| Interest Coverage | Barely above 1 |
| Debtor Days | 113 (worsening) |
| OPM | 6% |
| Payout Ratio | 0% (no dividends for you) |
🚨 Red Flags:
- ROE & ROCE sub-5% = capital inefficient
- P/E over 1000 = 👻
- Debtors up = collections weak?
9. 🧾 P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | PAT (₹ Cr) | EPS (₹) |
|---|---|---|---|
| FY23 | ₹291 | ₹23 | ₹4.09 |
| FY24 | ₹319 | ₹16 | ₹2.79 |
| FY25 | ₹358 | ₹-11 | ₹-2.08 |
Margins sliding, bottom line slipping. Growth? Sure. Profit? Not really.
10. ⚖️ Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | CMP | Mcap |
|---|---|---|---|---|---|
| Aptech | 43x | 7.6% | 6.3% | ₹145 | ₹840 Cr |
| NIIT Ltd | 36x | 4.5% | 0.9% | ₹128 | ₹1,734 Cr |
| Vinsys IT | 18x | 25.9% | 18.7% | ₹367 | ₹539 Cr |
| CL Educate | 1385x | 0.14% | 6.2% | ₹97 | ₹524 Cr |
CL Educate is:
🧨 More debt + Less profit = A very “niche academic experiment”
11. 🔍 Miscellaneous – Shareholding, Promoters
| Category | % Holding (Mar 2025) |
|---|---|
| Promoters | 53.16% |
| FIIs | 8.12% |
| DIIs | 0.02% |
| Public | 38.7% |
🚩 Promoter pledging: 48.9% encumbered. Not a good look.
🧑💼 CEO: Sanjeev Aggarwal (also co-founder)
📉 Shareholder count has dropped YoY – small investors fleeing?
12. 🧑⚖️ EduInvesting Verdict™
- 👨🏫 Once a coaching brand, now trying to be a tech-driven exam authority
- 🧮 But FY25 was a wake-up call: rising revenues ≠ rising profits
- 💣 Heavy debt + promoter pledging = risky path
- 💡 Turnaround depends on NSEIT integration and cost control
“CL Educate is what happens when a tuition teacher raises ₹500 Cr and decides to go corporate… but forgets to stay profitable.”
✍️ Written by Prashant | 📅 11 July 2025
Tags: CL Educate, NSEIT acquisition, coaching business, B2B education, education stocks, test prep, SME IPOs, EdTech, EduInvesting
