Educomp Solutions is an education solutions provider in India. Company’s products have unique position in Indian Education Market. The company works closely with schools to implement innovative models to create and deliver content to enhance student learning.
Educomp serves 26,000 schools and 15 million learners through its 775 preschools,43 high Schools, 7 colleges, 250 vocational training centres. The Company has installed SmartClass content in around 4000 schools, has set up 15,500 ICT labs in government schools. More than 2.5 million students are enrolled in eLearningwebsites.
The company has pan India presence with contacts from 13  state governments at present.The Company operates through its various subsidiaries including authorGEN, ThreebrixeServices, Learning.com, USA, AsknLearn Pte Ltd, Singapore, and via its associates such as SavvicaIncin Canada.
Educomp provides comprehensive educational programs involving infrastructureimplementation,teacher training and content development projects.It brought about a transformation in the teaching-learning processes by empowering teachers and encouraging students to acquire knowledge and gain clarity of concept through use of Information Communication Technology (ICT).
|Standalone Financial Position for Q3 ended|
|Particular||Dec 2010 (Rs. In Crores) ||Dec 2009 (Rs. In Crores) ||YOY (%)||Mar 2010 (Rs. In Crores) |
|PBT Margin (%)||45.47||46.30||44.67|
|Net Profit Margin (%)||39.66||29.70||26.66|
|EBITDA Margin (%)||53.39||59.92||55.50|
1. Order Book
a. Order from Government of Maharashtra worth Rs. 67.93 crore.  The order is with respect to implementation of ICT@Schools Project - Phase 2 in two regions - Nasik and Latur. The terms of Letter of Intent states the project to be implemented in build, own, operate and transfer (BOOT) model for a period of five years including supply and maintenance of computer hardware, software and lab accessories, training of school teachers, among other things.
b. Order form Government of Gujarat and Assam worth Rs. 6.81 Crores. 
The Company is awarded contract by Government of Gujarat for providing computer aided learning to the students of state-run schools. During the contract period of 5 years, the Company will develop and install 2D / 3D based multimedia content covering the core academic subjects in regional language in state of Gujarat and Assam.
2. Joint Venture with Zeebo Inc. 
The Company has entered into joint venture with US based Zeebo Inc. a Qualcomm funded company and Lakshya Digital, India’s largest interactive content development studio to introduce a customised version of Zeebo’s 3G-connected education and entertainment system specifically for the Indian market in 2011, with each partner making an investment of $4  million towards JV.
The joint venture will come up with device that works on 3G services. This device will benefit Indian school going children by having an access to educational content on connecting the device to television. With the rollout of 3G and wireless broadband across India, the product launch will provide greater penetration and accessibility for its products.
3. Supplementary Education Market
The supplementary education market is growing rapidly at 18%CAGR and expected to reach $19 billion by 2014. To take the advantage of this, the Company has undertaken two major investments.
a. Acquisition of VidyaMandir Classes Private Limited, a premier test preparation Institute for IIT-JEE and other engineering entrance exam for Rs. 34 Crores was a major synergy provider Company’s existing test preparation Leap program.
b. The Company has also invested to acquire majority stake in Gateforum Educational Services Private Limited. The acquired company was the only organisation that provided with comprehensive tool guide for Graduate Aptitude Test in Engineering (GATE), the entrance test for admission to post graduate courses in institute like IIT and NITs. The acquired company had presence in 40 cities and had been pioneer in offering online coaching to its student
4. Launch of 3D Technology
The project to be launch next is a uniquely developed three dimensional digital content in schools developed using the 3D stereoscopic technology.
5. Change in Business Strategy
The Company expect rapid growth in the SmartClass segment due to the change in its business from strategy BOOT to the “Outright Sale” basis. This will enable Company to rapidly penetrate the large addressable market and to be free cashflow positivebusiness
1. Higher Learning Segment and Online supplementary and Global are showing losses. The losses are small compared to overall profitability of the company
2. Delay in Cash Flow from Government:
As the company has large number of government projects, delay in payment from government may affect cash flow.
3. Entry of new player:
High profit margin in the Company’s product may likely attract new player to enter the market. However, the market is large enough for multiple product and price points to co-exist.
|Segment||Comprising of Product||Contribution of total revenue (%) in Dec 2010 ||Contribution of total revenue (%) in Dec 2009 ||Future Outlook|
|School Learning Solutions||SmartClass and EduResearch (ICT) business||78.15||76.39|| 1. Continues to maintain outlook of dominant market share for the product |
2. 949 schools added during the quarter
3. Deeper penetration in all tiers across the country
4. Addition of second service provider and new product launch based on 3D Technology
|K-12 Schools|| Preschools (Roots to wings, Euro Kids) |
High schools (Millennium School,Takshila School)
|8.50||9.65|| 1. Strategy - to cover the entire spectrum of school customer segments and address the education capacity shortages at various price points |
2. Likely announcement of Marquee Brand Partnership
3. New concept introduced by offering the option of Private Schooling
|Higher Learning Solutions||Vocational, higher education and professional development||4.08||3.00|| 1. Received the AICTE approval to launch Engineering and PGDM program |
2. Students enrolment for vocational program increased by almost 51% during the quarter.
|Online, Supplementary & Global business||Others||9.27||10.96||VidyaMandir Classes added three center and achieved 100% capacity utilisation|