Expect to maintain 25-26% topline growth in FY17: MT Educare

MT Educare's new education app Robomate+, contributed 15 percent to the topline in FY16. The app has pre-recorded lectures which can be viewed for free.The success of the app, along with 8-10 percent fee hike and 7-8 percent increase in student strength expected in FY17, will help the company maintain the 26-25 percent topline growth in FY17, says Chhaya Shastri, Director, MT Educare. MT Educare recently hired Amitabh Bachchan as its brand ambassador.Below is the verbatim transcript of Chhaya Shastri's interview with Ekta Batra and Mangalam Maloo on CNBC-TV18.Mangalam: The first thing that I wanted to know is what kind of revenues do you get from the digital vertical already and what kind of earnings before interest, tax, depreciation and amortization (EBITDA) margins do you enjoy on that?A: Basically, last year we have almost had 15 percent on our top line which came from Robomate and it is a little higher margin compare to our classroom business, so we are hoping that this will contribute to the top line as well as the bottom line in the coming year.Ekta: In FY16 how much did it contribute in terms of your total revenue and because of this incremental addition that you have to this app, how much do you expected to possibly be as a part of your total percentage of sales in FY17, 15 percent goes 20 percent, 25 percent?A: Well, we had almost Rs 41 crore as total revenue on FY16-17 and we are hoping to double it coming this year. It has a good margin so it will do wonders to the company for sure.Ekta: So then for example if the app is around 15 percent of total sales, how much would it possibly contribute in FY17 sale?A: It should contribute to around the double the revenue means margin should be contributing to that much also.Mangalam: You hired Amitabh Bachchan as the brand ambassador. If you could tell us what that means for the margins of the company considering the expenditure on marketing would have improved or increased rather.A: Yes, it has but well the brand ambassador is fantastic. He speaks about our Robomate app personality. This actually is a study app and it is basically students study friend. We have recorded all our energetic classrooms, the lectures into this app and we have divided this into a flip classroom at MT Educare the child studies, prepares and comes and then the results are fantastic that is at MT Educare. It is an e-com portal available for anybody, any students can go in and also buy this in SD card and also in the form of a tablet, but for probably awareness and more and more student should use all over India and rural India. We have made sure that it is free online and Google play store you can go and just get to know Robomate Plus.Mangalam: Then talking about your FY17 business your revenues were up around 26.5 percent. Could you break that in terms of how many students you added in the year and what the proportion of fee hike that you took and similarly what is the FY17 outlook?A: See what happens it is a combination for us the revenue is the student and also the fee hike and student growth is around 6-7 percent, the rest is contributed by the fee hike and we are going to see the similar combination happening. We are just hoping that Robomate actually has a great response as we are speaking just now also we already had 5 lakh and above downloads happening. This should contribute to our revenue in this coming year for sure.Mangalam: So fee hike should be around 15 percent in the next year?A: Around 8-10 percent, it is a combination of volume as well as fees.Mangalam: So 7-8 percent student growth, say 8-10 percent is your fee hike growth that comes to around 20 percent or 18-20 percent plus Robomate, so what kind of revenue growth can we expect in FY17?A: We will maintain our margins. We will maintain our top line. It should be slightly higher than this year, but we will maintain for sure around 25-26 percent growth on the top line and as well as the bottom line margins will be maintained.Ekta: Wanted your thoughts with regards to cannibalisation say your app has all of the details available, why should I go to your class in order to attend your class where I have the app and I can download it and use that. Is that a threat at all because of the app and the amount of impetus that you are giving it?A: As it is we have 10 percent of the market share. There are lot and huge amount of children who don’t have the access to such kind of fantastic teachers and the study material etc.