See 10% growth in enrollments next year: Career Point

IT education firm Career Point reported a 12 percent drop in total income for quarter-ended December. Speaking to CNBC-TV18, CMD & CEO Pramod Maheshwari says the company clocked an EBITDA of Rs 7.7 crore against Rs 15 crore in same period previous year. 

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The company’s revenue was under pressure due to a 12 percent drop in enrollment. That will remain for the complete year as well, Maheshwari says. “For the next year, we firmly believe that we will be able to recover whatever enrollment we have lost this academic session. We will be able to grow by 10 percent on enrollment front,” he told the channel.

Below is the verbatim transcript of his interview to CNBC-TV18

Q: How have you done in terms of revenue EBITDA and profitability, can you detail the numbers?

A: For this quarter on a standalone basis the total income of the company was Rs 20 crore. On a consolidated basis it was Rs 27 crore for Q3 FY13.

Q: What was it year ago?

A: Year ago on a consolidated basis it was about Rs 27 crore, almost the same. However, on standalone basis there is a drop of 12 percent in revenue.

Q: Last year did you do about Rs 22 crore?

A: We did Rs 28 crore on standalone basis.

Q: What about net profit, standalone and consolidated?

A: EBITDA for this quarter is Rs 7.7 crore against Rs 15 crore of last year. That is primarily because of drop in other income which we derived from interest and dividend on cash. It was lying with the company.

However on a consolidated basis the subsidiary of the company has started generating revenue and profit as well. So, if one looks at consolidated EBITDA last year it was Rs 13.9 crore. This is slightly up to Rs 14.6 crore for Q3 FY13.

Q: What is your net profit?

A: Net profit after tax on standalone basis is Rs 5 crore approximately against Rs 11 crore last year. On consolidated basis it is Rs 11 crore against Rs 9.8 crore last year, after tax.

Q: What does the subsidiary do because it looks like your consolidated performance is better?

A: The subsidiary is into development of educational infrastructure. This it gives to educational institutions on long-term lease.

So, for last two years the subsidiary was in process of setting up the infrastructure. It is now being given to the institutions. Also it has started realising the lease rental on those infrastructure facilities.

Q: How exactly will your EBITDA and margin pan out going forward? What are the margins for current quarter?

A: Current quarter margins on a standalone basis, EBITDA margin was 38 percent. This year has been quite uncertain for us reason being there were various changes proposed in competitive examination pattern. Due to which there was drop in enrollment by 12 percent year on year basis which has actually affected the revenue of the parent company.

However, going forward we believe that now all uncertainties are clear. Examination pattern is clear to everyone and enrollment has already started powering in. We should be able to recover whatever enrollment we lost this year in the coming academic session and will make up for that.

Q: So can you give us guidance on what you may do in the next year and how might this year end?

A: There won't be any enrollment taking place in the remaining three months. So things will more or less remain the same. There is a drop in enrollment of about 12 percent. This has affected the revenue and that will remain for the complete year as well.

As all uncertainties are over, for the next year we firmly believe that we will be able to recover whatever enrollment we have lost this academic session. We will be able to grow by 10 percent on enrollment front.

However the fee realization per resident will increase by about 7 percent. This we have already hiked for the next academic session.