Veranda Learning Solutions Reports 20% Revenue Growth, Profit Surges 185% After Vocational Unit Spin-off

Veranda Learning Solutions announced robust financial results for the second quarter of the current fiscal year. The company's revenue grew by 20%, reaching Rs 126 crore compared to Rs 106 crore in the same period last year. This expansion was primarily driven by the introduction of new educational programs and a strengthened business-to-business (B2B) segment.

The net profit saw an extraordinary increase of 185%, standing at Rs 23 crore. This significant jump was largely attributed to a one-time gain of Rs 133 crore resulting from the spin-off of its vocational education business. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also showed strong performance, increasing by 63% to Rs 48 crore.

Segment-wise, the commerce segment exhibited substantial growth with operating revenue rising 68% to Rs 86 crore. However, the government test preparation segment saw a marginal 1% growth, while revenue from the academic test preparation segment declined by 8% year-on-year. The company noted a positive trend in collections, with a 26% rise from new course launches and high-ticket programs.

A key strategic move during the quarter was the divestment of its vocational arm, which included brands like Edureka, Veranda HigherEd, and Six Phrase Edutech. This business was integrated into a joint venture with SNVA Edutech through a share-swap deal valued at Rs 390.11 crore. Veranda Learning Solutions and its subsidiary now hold a combined 50% equity stake in the joint venture.

Chairman Suresh S Kalpathi highlighted the strong momentum, citing increased student enrollments, expanded course offerings, and the successful launch of new programs. These strategic actions, combined with a focus on an asset-light operational model and reducing debt on the balance sheet, contributed to the company's strong profitability for the quarter.

Impact: This news directly impacts Veranda Learning Solutions, potentially influencing its stock performance and investor sentiment. The strategic spin-off and financial results provide insights into the company's operational efficiency and future growth prospects, relevant for investors in the education technology sector. Impact Rating: 7/10

Difficult Terms and Meanings: * EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance, showing profitability before accounting for financing decisions, accounting decisions, and tax environments. * PAT: Profit After Tax. This is the company's net profit after all expenses, including taxes, have been deducted. * Asset-light model: A business strategy where a company owns few physical assets. It focuses on leveraging intellectual property, technology, or partnerships to deliver services, reducing the need for capital expenditure and often leading to higher returns on capital. * Balance sheet deleveraging: The process of reducing a company's debt levels. This improves financial health by lowering interest expenses and reducing financial risk. * Share-swap transaction: An exchange of shares between two companies as a form of payment for an acquisition or merger, where shareholders of one company receive shares in the other. * B2B business: Business-to-Business. This refers to sales transactions between two businesses, rather than between a business and a consumer.