Deal with Ansals will give us access to land: Educomp

Q: What would be the target number of schools that you have for FY08 based on the current number of schools that you are working on in that segment?

A: Currently we have three schools that are fully operational. There are two schools, which are currently under construction for which we have already announced admissions. So by March 31, we will have five schools fully operational and approximately seven schools by June 2008.

Q: What are the margins looking like for the current quarter on a consolidated basis for all three segments put together?

A: I think margins is where the bright side of the story is. We have closed with EBITDA margins of 46.7%, our profit after tax has been 26.59%, this is after taking a hit on account of ESOP of 2.04%. So on a secular basis, purely from operations, our profit after tax margins are almost touching 30%, which is extremely encouraging. But that's to be expected given the fact that our entire model is based on annuities, getting subscriptions from students and hugely focused on licensing our intellectual property to schools.

Q: Give us a quick word on the recent venture that you have signed up with Ansals. How would this work out in terms of revenue sharing and probably profit sharing as well if you can throw some light on that?

A: Essentially our deal with Ansals is very similar to the deals that we are tracking with other real estate majors across the country. This is really to get access to land for setting up schools.

We had announced earlier that our plan was to set up a 100 odd schools over the next three years. So with this collaboration with Ansals, we have almost near visibility to almost all the sides that are required for setting up the school.