This edutech stock nearly doubles in 8 months; plans overseas expansion
At a time when the Indian edtech sector is facing a major funding crunch, forcing well-funded unicorns to become leaner and meaner, CL Educate, the owner of popular Test-Prep brand “Career Launcher”, has managed to grab investor’s attention. With a market capitalisation of ₹479 crore, CL Educate stock has nearly doubled investors’ wealth in the last 8 months. The stock price rebounded from its 52-week low of ₹48.80 on March 28, 2023, to a 52-week high of ₹90.90 on November 23, 2023, resulting in an upside of 86%.
CL Educate shares have gained momentum in the last few months amid plans to expand business in India and overseas. In the last six months, the stock has risen 34%, while it surged over 21% in a month. In the last one year, the counter gave over 19% returns to its shareholders, while it gained 21% in the calendar year 2023. In the long term horizon, the stock has delivered 78% returns in 3 years; 194% in five years; and a negative return of nearly 18% since its listing on March 31, 2017.
For the half year ended September 30, 2023, CL Educate reported a profit after tax (PAT) of ₹11 crore as compared to ₹9.4 crore in the same period last year. Total Revenue grew to ₹186.3 crore in H1FY24 as against ₹162.4 crore in the half year ended September 30, 2022. On the operating front, the EBITDA stood at ₹22.8 crore as compared to ₹18.6 crore in the year ago fiscal, driven by enhancement in its marketing technology business margins.
Founded by Satya Narayanan R in 1996, CL Educate offers various educational products and services through its two segments, education and training programme (including sale of study material) and vocational training. The company offers test preparation courses and services under the “Career Launcher” brand; publishing and content development services under the brand “GK Publications”; and event management, marketing support, customer engagement, and managed manpower and training services under the “Kestone” brand name.
Last month, Career Launcher, the EdTech arm of CL Educate, announced the addition of 12 new study abroad centres across India, which is a mix of company-owned company-operated (CoCo) centers and franchise-owned franchise-operated centers. The new locations include three each in Mumbai and Delhi-NCR in addition to centers in Bangalore, Kolkata, Amritsar, Chandigarh, Panipat and Mysore.
Management on business expansion
In an interaction with Fortune India, Sujatha Kshisagar, President & Chief Business officer at Career Launcher says that the company has expansion plans in India as well as other countries such as Bangladesh, Nepal, Sri Lanka besides Africa.
“We are looking for global expansion as a very logical step or next step, but this does not mean we are not looking to expand in India. In India, we have around 160 centers and plan to expand this to 500 centers, approximately 3x in the next two to three years. So, there are huge expansion plans in India itself to improve our distribution and footprints within the country,” says Kshisagar.
She adds, “We find a lot of synergies between India and a lot of countries and markets in South Asia and West Asia. So they are our immediate target as far as expansion is concerned. If you look at it, it's an expansion of India as culturally and economically these markets are very similar. Whether it is Bangladesh, Nepal, or Sri Lanka, it's as good as putting a center in another city or another center in the same city in the cities we are already present in India.
Kshisagar further states that the company is “parallelly sowing the seeds in Africa”, besides expansion in Bangladesh, Nepal, and Sri Lanka. “So for Africa in the next three years, our aim is to actually set up a foundation, which will obviously over the next two or three decades, grow,” she says.
“So as we lay a foundation into Africa, we are looking at very specific areas or countries such as Mauritius and East Africa. Mauritius will be our first country to step into before we actually embark on our journey to South Africa, Nigeria, Uganda, and Zambia,” she adds.
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