MT Educare aims 25-30% revenue growth in FY14

MT Educare that owns the Mahesh Tutorials brand is aiming to grow revenues by 25-30 percent in current financial year, CFO, Yagnesh Sanghrajka, told CNBC-TV18.

“On an Rs 157 crore base last year we are targeting anything between Rs 195-200 crore internally… So, the increase in the revenue will be quite healthy as we speak because of expansion in various geographies and verticals,” Sanghrajka said. Below is the verbatim transcript of the interview  Q: Let us start with your earnings before interest, taxes, depreciation and amortisation (EBITDA) performance because that has come in quite healthy, even though it is a small base, but margins have also gone up. Is this the kind of trajectory that you will maintain 15 percent margins and the kind of EBITDA number that you have delivered or is this a bit of a one-off?
A: These operational efficiencies do come in every year-on-year and that is what has been the focus in the company. So, the operating performance is at 13 percent EBITDA right now for the Q1. However, our yearly numbers if you see we had an EBITDA of almost about Rs 29 crore on Rs 157 crore, so actually you should be tracking that, quarterly EBITDA is generally not indicative of our yearly EBITDA. But yes while having said that the EBITDA margins are expanding year-on-year and that has been the focus for us. Q: Rs 29 crore for the full year FY13, so FY14, how much growth will you be targeting?
A: We are targeting a growth of about 25-30 percent in terms of revenue increase because on an Rs 157 crore base last year we are targeting anything between Rs 195-200 crore internally, so that has been the focus. So, the increase in the revenue will be quite healthy as we speak because of expansion in various geographies and verticals. However, this year there could be an impact on profit after tax as we might have some incremental depreciation as we have recently set up a new college Mangalore. However this PAT impact will get evened out from next year. So, we are trying to keep our PAT margins intact, even though an incremental depreciation will come in this year for us. Q: You gave us an idea of what might be the revenues for FY14, you were speaking to us about tie-ups with various state colleges in Karnataka. Will you be able to milk it right away? Or will more gains flow in FY15?
A: As we speak we have already tied up with nine colleges as I earlier said. So, the revenue from the additional four colleges that we tied up last year will already flow in from this year and this is a continuous phenomenon. We will keep on atleast four or five colleges each year and revenue trajectory in Karnataka is almost about 80 percent growth though the base is small again here. But as years go by and as we had colleges each year the revenue increase is expected to be about 80 percent compound annual growth rate (CAGR) just for Karnataka. Q: These numbers that you have announced for this quarter include Lakshya?
A: Yes, this time the Lakshya numbers have been added. Lakshya Forum got consolidated from April 1, so that number is inclusive of Lakshya. So, there is a Rs 3 crore revenue that is added in the Rs 47.9 crore revenue that you see in our results. So, Lakshya is added from this April 1. Q: In terms of seasonality, what would be your strongest quarter going forward?
A: As I have been saying Q2 every year is generally the strongest quarter followed by the Q3 and then Q4 and Q1 in that order.