The edtech behemoth BYJU’S has not yet made public its FY22 financial report card, but its gem in the crown, Aakash Educational Services Ltd. (Aakash), recorded an 82% increase in earnings to INR 79.5 Cr in FY22. When compared to the INR 43.6 C profit it generated on a standalone basis in FY21, this is a substantial improvement. It should be mentioned that Aakash is in its first fiscal year under BYJU’s (more on this later).
Aakash, which has one of the largest networks of offline learning centers in the nation, had a 45% growth in income in FY22, going from INR 982.7 Cr to INR 1,421.2 Cr. This is happening against the backdrop of increased enrollment at coaching centers after declining enrollment during the COVID-19 lockdowns in 2020 and the first half of 2021.
But the company’s earnings are just around half of what it brought in with INR 165.7 Cr in FY20. For comparison, its sales in FY20 were INR 1,214 Cr. Students who enroll at its offline centers and franchise partners are the main sources of income for the offline coaching behemoth. Over 4 lakh students are enrolled in the institute’s 320 centers. Aakash’s overall income in FY22 was INR 1,464.3 Cr, up 39% from INR 1,050 Cr in FY21 when other income was taken into account.
Aakash spent!
Aakash saw a 37% rise in spending to INR 1,331.7 Cr in FY22 from INR 990.3 Cr in FY21.
Employee Benefit Expenses: The firm, a coaching school predominantly staffed by instructors and sales reps, reported a 35% increase in employee costs from INR 534.1 Cr in FY21 to INR 722.8 Cr in the year under review. 54% of the total expenses incurred by the organization were related to its workforce. There are about 5,500 teachers at the institute.
Expenses for Advertising: To boost brand recognition, the corporation invested INR 134 Cr in advertising. Compared to the INR 102.6 Cr spent in FY21, this expenditure was 31% greater.
Since early 2021, Aakash has been the money maker for the financially ailing edtech behemoth BYJU’S. The largest purchase in the edtech sector was made in April 2021 when BYJU’S paid around $1 billion to acquire the 35-year-old Aakash. Following the roughly $300 million purchase of Whitehat Jr., this was BYJU’s second major acquisition.
Byju Raveendran, the CEO of BYJU, holds a 30% share in Aakash, while Think & Learn Private Limited, the parent company of BYJU, holds a 40% interest. The Chaudhry family (Aakash Chaudhry) maintains an 18% share, while Blackstone possesses the remainder 12%. Aakash Chaudhry served as CEO from November 2020 until his resignation in December 2022.
In addition to Aakash, GradeUp, owned by BYJU’S, turned a profit in FY22. Auditors are worried about the purchased company, though, because of its obligations and declining net value.
BYJU’s Trouble
According to reports, BYJU’S was in discussions to sell Aakash late last year because it was running out of money to continue operating. The massive edtech company held talks about a possible sale of Aakash with private equity companies including KKR and Bain Capital. BYJU’S later denied the rumors that they were selling Aakash, though.
In addition, the edtech behemoth is laying off almost 4,000 workers in a second wave of layoffs in an effort to reduce expenses and boost its cash reserves. The large edtech company is now going through a complete restructuring, and as of yet, it has not submitted its FY22 financials. However according to Think & Learn Pvt Ltd’s official statement, the company’s total revenue was INR 3,569 Cr, with an EBITDA loss of INR 2,253 Cr (excluding its acquired firms).
The Enforcement Directorate (ED) has been looking into BYJU’S for an alleged FEMA violation worth north of INR 9,000 Cr, which has made the situation worse. The Indian cricket team’s jersey sponsorship rights are the subject of a legal dispute that the Board of Cricket Council of India (BCCI) took BYJU’S before an NCLT court.
