Event Participants
Executives
2 Kalpathi S. Suresh (Executive Director Cum Chairman), Mohasin Khan (Chief Financial Officer)
Analysts
9 Aditya, Ishita, Junaid, Mehul Jain, Prachi Shah, Rahil Kothari, Rahul Kothari, Sudarshana Narasimha, Yash Modi
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from operations | ₹150 crores | +42% YoY; broad-based momentum across commerce, government test prep and academic segments |
| EBITDA | ₹54 crores | +10% YoY (margin ~36%); Q1 FY26 included one-time other income of ₹17 crores from remeasurement of financial liabilities — adjusted EBITDA growth ~30% |
| PAT | ₹34 crores | +472% YoY from ₹5.9 crores; sixth consecutive quarter of PAT-positive performance |
| Enrollments | ~1.03 lakh students | +35% YoY; subject-wise course offerings in commerce inflate enrollment count vs collection value |
| Collections | ₹165 crores | +27% YoY; ₹15 crores of advance collections deferred to subsequent quarters vs ₹150 crores recognized |
| Commerce Test Prep revenue | ₹108.6 crores | +53% YoY; EBITDA ₹42.7 crores, +58% YoY, margin ~40% |
| Government Test Prep revenue | ₹32.5 crores | +41% YoY; EBITDA improved by ~₹4 crores from near-breakeven level |
| Academic/K12 revenue | ₹12.2 crores | +22% YoY; EBITDA ₹9.2 crores, +53% YoY |
| Total debt — Commerce | ₹125 crores | Excludes deferred consideration; no payouts due in next 12 months |
| Total debt — Non-commerce | ₹145 crores | Includes SNVA Veranda stake value sitting in non-commerce entity |
| Quarterly finance cost | ₹7.7 crores | Post-refinancing run-rate; debt cost reduced from 17.5% to 9–9.5% |
| Tax reversal | ₹7.35 crores | One-time reversal from merger scheme of Veranda Administrator and Veranda K12; drove negative tax expense of ~₹3 crores in Q1 |
Geographic & Segment Commentary
Commerce Test Prep: Revenue of ₹108.6 crores (+53% YoY) with 40% EBITDA margin and 58% EBITDA growth. Undisputed category leader in CA, CS, CMA, ACCA with 105+ offline centers; launched Commerce Virtual Live and Recorded digital format for Class 11/12, enabling pan-India reach without physical infrastructure. FY27 revenue split guided at ~₹330 crores offline (35% margin) and ~₹120 crores online (45–48% margin), a roughly 2:3 online-to-offline ratio. Management is adding 15 new managed commerce colleges (doubling the network from ~17) with ARPU expected to increase 7–8% annually and student count growing ~10% per year.
Government Test Prep: Revenue of ₹32.5 crores (+41% YoY) with EBITDA improving ~₹4 crores from near-breakeven. Growth driven by new offerings including Group 1 offline programs, Junior IAS for school/final-year students, and subscription-based magazines; Raise Platform center network spans UPSC, SSC, Banking, TNPSC, KPSC and other state PSC exams. Management aims to expand into Karnataka's state-level exam market and targets ~₹100 crores EBITDA from this vertical over the next 4–5 years.
Academic/K12: Revenue of ₹12.2 crores (+22% YoY) with EBITDA of ₹9.2 crores (+53% YoY). Currently manages six schools with 5,400+ students under an asset-light, end-to-end managed services model; student growth ~10% YoY with Q1 revenue uplift from books and ancillary services. Segment remains in foundation-building phase with planned entry into preschool managed operations and ongoing investments in systems, partnerships and brand building expected to translate into stronger growth in coming quarters.
Company-Specific & Strategic Commentary
Commerce Demerger: Board-approved Composite Scheme filed with BSE and NSE, receiving No-Objection Certificates in January 2026; NCLT-directed court-convened meeting held in March, shareholders voted in favor in April, second motion filed April 2026. Next NCLT hearing August 17, 2026 (orders reserved from July 20 hearing); completion and listing of JK Shah Commerce Education Limited expected by first half of September 2026. Every Veranda shareholder receives one share in the newly listed entity on a 1:1 basis at no additional cost. Exchanges have been engaged and are prepared for a fast-track listing.
Geography Expansion: FY27 priorities include establishing offline presence in North and West India (UP, Bihar, Rajasthan, Gujarat) to reduce regional concentration; doubling the managed commerce college network via 15 new locations; entering Karnataka for state-level government exam prep; and entering preschool managed operations to deepen the K12 value chain.
Deleveraging & Balance Sheet: Debt refinanced from 17.5% to 9–9.5% over the past year; the balance sheet continues to strengthen following the FY26 divestment of the vocational segment to SNVA Veranda. No deferred consideration payouts due in the next 12 months; remaining structured payouts extend over 5–7 years.
Digital Delivery: Commerce Virtual Live and Recorded digital format launched for Class 11/12 allows pan-India reach without incremental physical infrastructure; online commerce margins (45–48%) significantly exceed offline (~35%). New digital programs for 11th/12th commerce and CMA India expected to drive incremental cash inflows.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ~₹670 crores FY27 | vs ₹481 crores FY26; driven by commerce expansion, new course launches and geography entry |
| EBITDA | ₹260 crores FY27 | ~38.8% margin; Q1 margin temporarily depressed by advertising spend for JK Shah standalone brand and initial costs for 15 new managed colleges |
| PAT | ₹144 crores FY27 | vs ₹130 crores FY26 |
| Commerce revenue | ~₹450 crores FY27 | Offline ~₹330 crores, online ~₹120 crores |
| Commerce EBITDA | ~₹215 crores FY27 | Margin improvement from scale, ARPU growth of 7–8% and 10% student growth |
| Commerce PAT | ~₹110 crores FY27 | |
| Non-commerce revenue | ~₹220 crores FY27 | Government test prep + K12 |
| Non-commerce EBITDA | ~₹46 crores FY27 | |
| Non-commerce PAT | ~₹34 crores FY27 | |
| Commerce revenue aspiration | ₹1,000 crores by FY30 | Product and geographic expansion over next 3–4 years |
| Government test prep EBITDA | ₹100 crores in 4–5 years | Based on South India leadership position and expected faster growth |
| Demerger completion | By September 2026 (first half) | NCLT hearing August 17; ROC filing, record date and listing expected within weeks of order |
Risks & Constraints
| Risk | Context |
|---|---|
| Demerger listing delay | NCLT orders reserved since July 20 hearing with clarifications sought on appointed date; any further court delays would push the expected September 2026 listing and value unlock for shareholders. Management is confident based on precedent, but final approval remains subject to court discretion. |
| EBITDA margin trajectory | Q1 FY27 margin of ~36% trails the 38.8% FY27 guidance. Advertising spend for the JK Shah standalone brand, initial costs for 15 new managed colleges, and higher employee/lecturer costs compressed Q1 margins. Management expects recovery in subsequent quarters as expansion costs annualize. |
| Regional concentration | Business is heavily concentrated in South India; the North/West India expansion (UP, Bihar, Rajasthan, Gujarat) carries execution risk in unfamiliar markets with different competitive dynamics and student preferences. |
| K12 execution risk | Only six managed schools (5,400+ students) versus a market worth over ₹10 lakh crores in South India alone; scaling the managed school model and entering preschool operations requires sustained investment before meaningful revenue contribution. |
| Enrollments vs. collections divergence | Enrollment growth (+35%) outpacing collections growth (+27%) partly reflects a shift to subject-wise offerings with lower ticket sizes; if this skew persists, revenue per enrollment could compress despite volume growth. |
Q&A Highlights
Market recognition and value creation milestones
- Question: What is missing for the market to recognize the improvement — JK Shah listing, further debt reduction, or FY27 growth? What milestones should shareholders watch? (Aditya)
- Answer: Demerger completion and listing next month is the first significant value unlock — JK Shah Commerce will be an undisputed market leader in its space across profitability, alumni network, center count and ranks. Government test prep targeting ₹100 crores EBITDA over 4–5 years represents a second unlock; SNVA Veranda stake and K12 network build-out are additional levers. Management emphasized a confidence-building process — having delivered consistently on projections over six consecutive quarters, market recognition should follow. (Kalpathi S. Suresh)
Commerce online vs. offline split and margins
- Question: Can you provide the bifurcation of commerce revenue between online and offline, and the EBITDA margin of each? (Prachi Shah)
- Answer: For FY27, commerce guidance is ~₹450 crores — offline ~₹330 crores, online ~₹120 crores (roughly 2:3 online-to-offline ratio). Offline margins peak at ~35% while online margins sit at 45–48%. (Kalpathi S. Suresh)
Managed school revenue growth drivers
- Question: How much of the ~50% jump in managed school revenue was driven by price vs. enrollment, and how have student counts changed? (Prachi Shah)
- Answer: Student enrollment growth in managed schools was ~10% YoY; the additional revenue uplift came from Q1 start-of-operations book sales and ancillary services, which also explains the seasonally higher Q1 revenue. (Kalpathi S. Suresh)
Revenue, collections and enrollment divergence
- Question: Revenue grew 42%, collections 27%, enrollments 35% — what explains the divergence? (Prachi Shah)
- Answer: Enrollment growth (35%) outpaces collections (27%) because the commerce segment now offers subject-wise and course-wise classes rather than only bulk courses, increasing enrollment counts without proportionate collection increases. Additionally, ₹165 crores were collected vs. ₹150 crores recognized — the ₹15 crore difference is advance recognition deferred to subsequent quarters. (Kalpathi S. Suresh)
EBITDA growth lagging revenue growth
- Question: Despite 42% revenue growth, consolidated EBITDA grew only 10% — where is the incremental revenue being reinvested? (Ishita)
- Answer: Q1 FY26 included a one-time ₹17 crores other income from remeasurement of financial liabilities; excluding that, EBITDA growth is ~30%. Additionally, advertising and marketing spend to establish the commerce vertical as a standalone brand ahead of the demerger listing, and initial costs for the 15 new managed commerce colleges, were expensed in Q1. The benefit should show in subsequent quarters of FY27. (Kalpathi S. Suresh)
Sustainable quarterly finance cost
- Question: With refinancing benefits largely captured, what is the sustainable quarterly finance cost? (Ishita)
- Answer: ₹7.728 crores per quarter. (Mohasin Khan, CFO)
FY27 EBITDA bridge — ₹56 crores incremental
- Question: Can you bridge the ₹56 crores incremental EBITDA from FY26 to FY27 guidance? (Ishita)
- Answer: Three levers: (1) 15 new managed commerce colleges commencing operations this year; (2) 7–8% annual ARPU increases and ~10% student count growth; (3) new digital programs for 11th/12th commerce and CMA India generating incremental cash inflows. (Kalpathi S. Suresh)
Demerger timeline and NCLT status
- Question: What gives confidence that listing will happen next month given delays? (Yash Modi)
- Answer: Orders were reserved at the July 20 hearing — typically a precursor to pronouncement. NCLT asked for clarifications on the appointed date; the affidavit was filed the day of this call. Next hearing is August 17. Post-order: ROC filing (3–4 days), record date (minimum one week), DEMAT crediting, then fast-track listing given the pre-approved scheme from both exchanges. Management expects full process completion before end of September. (Kalpathi S. Suresh)
Tax expense reversal
- Question: Tax expense went negative (~₹3 crores) versus ~₹8 crores in prior quarters — what changed? (Mehul Jain)
- Answer: On account of the merger scheme between Veranda Administrator and Veranda K12, brought-forward losses of the parent were utilized, triggering a reversal of ₹7.35 crores of earlier-year tax provisions in the current quarter. (Mohasin Khan, CFO and Kalpathi S. Suresh)
EBITDA margin trajectory toward 38.8% guidance
- Question: Trailing EBITDA margins have dipped from 36.44% (Sept '25) to 34.71% (current quarter) — how will the 38.8% margin be achieved? (Mehul Jain)
- Answer: Q1 margins were depressed by: college expansion costs (doubling from ~17 to ~32 centers), JK Shah standalone brand advertising, and higher employee/lecturer costs tied to revenue growth. These are upfront investments for future capacity — the benefit should materialize over the next three quarters and in subsequent years as revenue ramps up against incurred fixed costs. (Kalpathi S. Suresh / Mohasin Khan, CFO)
Post-demerger valuation of commerce vs. non-commerce entities
- Question: Will debt on the non-commerce entity cause structurally lower multiples, effectively transferring value to JK Shah shareholders? (Rahil Kothari)
- Answer: JK Shah Commerce, as an undisputed market leader in its space, should trade at higher multiples than Veranda currently receives. Government test prep should also command a good multiple given its South India leadership position and ₹100 crores EBITDA target over 4–5 years. K12, with only 6–7 managed schools, may not attract the best multiples — so the commerce entity is expected to receive the highest valuation multiple in the sector. (Kalpathi S. Suresh)
Key Takeaway
Veranda Learning delivered a strong Q1 FY27 with revenue of ₹150 crores (+42% YoY), EBITDA of ₹54 crores (~36% margin), and PAT of ₹34 crores (+472% YoY) — a sixth consecutive quarter of PAT-positive performance — driven by commerce (+53% YoY) and government test prep (+41% YoY) while K12 continues its investment phase. Management guided FY27 revenue of ~₹670 crores, EBITDA of ₹260 crores (38.8% margin), and PAT of ₹144 crores, with the commerce segment contributing ~₹450 crores at ~48% EBITDA margin. Strategic focus is squarely on completing the JK Shah Commerce demerger — with NCLT orders reserved and listing expected by September 2026 — alongside doubling the managed commerce college network via 15 new locations, entering North/West India markets (UP, Bihar, Rajasthan, Gujarat), expanding government test prep into Karnataka, and entering preschool managed operations. Key watch points include sustaining the EBITDA margin ramp to the 38.8% guidance after Q1 expansion and advertising spend, timely NCLT approval, and successful execution of geography and product expansion plans that underpin the ₹1,000 crores commerce revenue aspiration by FY30.