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Chetana Education Ltd — Q4 FY26 earnings call

Call held 26 May 2026

Management summary

Chetana Education Limited reported a steady FY26 with revenue growing 6.5% to INR 109 crores and PAT at INR 13.55 crores. Growth was driven by digital initiatives, with QR-enabled products now contributing 15% of revenue and the new OTT platform, Dijaa, generating INR 0.95 crores in its first year. While PAT margins were flat due to one-time provisions and startup losses, management projects robust double-digit top-line growth and 15-20% PAT growth over the next three years, fueled by syllabus changes and strategic digital expansion.

Highlights

FY26 Revenue increased by 6.5% to INR 109 crores from INR 102 crores in FY25.
PAT for FY26 was INR 13.55 crores.
Digital revenue from QR-enabled products grew significantly, now contributing 15% of total revenue.
The new OTT platform, Dijaa, generated INR 0.95 crores in its first year and is projected to grow three to fourfold in the coming year.
Management targets robust double-digit top-line growth and 15-20% PAT growth year-on-year for the next 2-3 years.

Concerns

PAT margin remained flat due to a one-time INR 0.55 crores gratuity provision.
The new OTT subsidiary, Dijaa, incurred a startup loss of INR 0.55 crores in FY26.
Receivable days remain elevated at over 245 days, though management plans a 20% reduction.

Key financials

01 Revenue ₹109 Cr +6.5%YoY
02 PAT ₹13.55 Cr
03 QR-enabled Product Revenue Share 15%
04 OTT Platform Revenue (Dijaa) ₹0.95 Cr
05 Gratuity Provision Impact ₹0.55 Cr
06 Dijaa Startup Loss ₹0.55 Cr

What they filed

Q4 FY26: revenue up 27.5%, net profit down 60.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q4 FY24	Q2 FY25	Q4 FY25	Q2 FY26	Q4 FY26
Revenue	40	58	44	59	51 +28%
Expenses	25	42	39	45	43
EBITDA	15	16	6	14	8 −47%
Margin	37%	27%	13%	23%	16%
Other income	0	0	0	0	0
Interest	1	2	1	1	1
Depreciation	0	0	0	0	1
Profit before tax	14	14	5	13	6 −57%
Tax rate	27%	26%	28%	26%	32%
Net profit	10	10	3	9	4 −60%
EPS	6.69	4.96	1.69	4.61	1.99

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence

Debt Debt disclosed

Hi. This is Saurabh Shah, CFO, Chetana Education Limited. I welcome everyone. With respect to your question, Mr. Shah, the thing is we are completely a debt-free company only. Currently, whatever we utilize the debt are mainly for the purpose of working capital. We do not have any further any other debt in the company. Working capital are used based on the cyclical requirements generally during Jan to April. Otherwise, we do not utilize even working capital requirements. CC limits are utilized only during that period. Hope I satisfied your question and answer.
Liquidity Liquidity disclosed Working capital fully utilized during Jan-June due to cyclical business, leading to high cash utilization and high debtors/inventories.

Yes. Here, as you are aware, our industry is a cyclical industry, which mainly does the business between Jan-to-June. So, working capital fully utilized during that period in between the March comes in. So, financials are looking a bit different than the normal companies here. So, cash flow, if you see, you will feel that we are utilizing to a maximum extent. But overall basis, the business cycle and business module itself is like that where we are doing main business with CBSE during Jan-to-March. And post-April-to-June, we do mainly with Maharashtra board. So, cash utilization is high in terms of this period as my debtors as well as the inventories are very high. We have to maintain.

Guidance & targets

Profitability

PAT Growth Profitability · next year-on-year · High confidence 15-20%

and we expect at least around 15% PAT -- 15% to 20% PAT growth in next year-on-year.

— Rakesh Rambhia, Whole-Time Director
Net PAT Profitability · by FY29 · High confidence INR 22-25 crores

15% to 16%, so it will translate our net PAT in range of INR22 crores to INR25 crores per annum by '29. Absolutely.

— Rakesh Rambhia, Whole-Time Director

Revenue

Group Top-line Growth Revenue · next 3 years · High confidence 50-60% jump

our group company, what we are looking as of now as a Chetana Education as a whole, we would be targeting at least next three years, we would be targeting at least 50% to 60% jump on top line.

— Rakesh Rambhia, Whole-Time Director
Group Top-line Target Revenue · by FY29 · High confidence INR 150-160 crores

Like right now, we are at INR100 crores, we can say INR150 crores or INR160 will be target for the for next three years, we can say, by FY '29, we can say? Yes.

— Rakesh Rambhia, Whole-Time Director
OTT Revenue per Child Revenue · per year · High confidence INR 360

So, sir, right now, the revenue model is INR360 per child per year.

— Rakesh Rambhia, Whole-Time Director
OTT Revenue Target Revenue · in 3 years · High confidence INR 3.5-4 crores

So, like in three years, if we say 1 lakh students will be there, then INR60 per student, then approximately INR3.5 crores or INR4 crores of revenue we are expecting like that? Yes, definitely.

— Rakesh Rambhia, Whole-Time Director

Margin

PAT Margin Margin · by FY29 · High confidence 15-16%

We expect this PAT to be anywhere between 15% to 16%.

— Rakesh Rambhia, Whole-Time Director
Smart School Project Margin (EBITDA) Margin · High confidence 15-20%

Considering the depreciation value for the IFP, we see anywhere around 15% to 20% margin. ... Yes, EBITDA level.

— Rakesh Rambhia, Whole-Time Director

Digital Adoption

Active Digital Schools Digital Adoption · coming year · High confidence 300 schools

From 75-80 schools today

So coming year, we expect at least 300 schools to come in.

— Rakesh Rambhia, Whole-Time Director
OTT Students Onboarded Digital Adoption · next 3 years · High confidence 5-10 lakh students

The whole idea is next three years; we would love to have at least anywhere between 5 lakhs to 10 lakh students coming on board.

— Rakesh Rambhia, Whole-Time Director

Revenue Contribution

Stationery Division Revenue Share Revenue Contribution · FY26-27 · High confidence 5-7%

Yes. So, we expect that stationary division will clog revenue of at least 5% to 7% of the overall turnover for FY-'26-'27.

— Rakesh Rambhia, Whole-Time Director
Stationery Division Revenue Share Revenue Contribution · FY27-28 · High confidence >10%

But whereas the FY-'27-'28, we will see at least more than 10%.

— Rakesh Rambhia, Whole-Time Director

Operational Efficiency

Receivable Days Reduction Operational Efficiency · coming financial year · High confidence 20%

So, coming a financial year, we expect that we will drastically reduce this number of days at least by 20%.

— Rakesh Rambhia, Whole-Time Director
Receivable Days Target Operational Efficiency · coming financial year · High confidence below 210-220 days

From >245 days today

which we plan to get down to at least below 220 days to 210 days.

— Rakesh Rambhia, Whole-Time Director

Market context

Top-line Growth Revenue · next 2-3 years · High confidence double-digit

And we see from here on at least double-digit growth in terms of top line

— Rakesh Rambhia, Whole-Time Director
Traditional Books Growth Revenue · next 3 years · High confidence double-digit

publishing we are seeing at least double-digit growth for next three years

— Rakesh Rambhia, Whole-Time Director

What to watch in Q1 FY27

PAT Margin Improvement

next year-on-year (FY27)

Current Flat (around 12.5% implied)

Target 15-16%

Why it matters

Verifying if PAT margin recovers as one-time impacts from gratuity provision and Dijaa startup losses subside, crucial for profitability targets.

No, definitely, there will be an improvement on the PAT side. Even if you see stand-alone, there was better than compared to '25 just because this is government policy and the little initial investment on the OTT. But overall, the PAT growth will be much better than what is there today. So around we have around -- if I'm not mistaken, it's around 12.5%. We expect this PAT to be anywhere between 15% to 16%.

Risks & concerns

Flat PAT margin due to one-time provisions and startup losses
medium

PAT margin remained flat due to INR 0.55 crores gratuity provision and INR 0.55 crores loss from new OTT subsidiary Dijaa, stated as temporary.

Management acknowledged
Elevated receivable days
medium

Receivable days are over 245 days, attributed to cyclical sales; management plans a 20% reduction to 210-220 days.

Analyst acknowledged
Slow school adoption for SaaS-based OTT platform
low

School management decision-making for OTT adoption is slow, but company is confident in long-term potential.

Management acknowledged
Content development costs due to syllabus changes (NEP)
low

NEP-driven syllabus changes require content revision, but costs are capitalized over three years and seen as a growth driver.

Analyst acknowledged

Q&A highlights

6 direct

Debt Status and Net Debt to Equity Partial

we are completely a debt-free company only. Currently, whatever we utilize the debt are mainly for the purpose of working capital. We do not have any further any other debt in the company.

Analyst's query about 0.32x net debt to equity was met with management's claim of being debt-free except for working capital, indicating a potential discrepancy or different interpretation of 'debt'.

Asked by Raj Shah

Digital Revenue Contribution and Growth Direct

the QR-enabled product is started with the mega 3% revenue on the top line, which has now stood to around 15%. ... the OTT platform, OTT platform for financial year '25, '26, we have clocked a revenue of around INR1 crore, INR90 lakhs to INR95 lakhs, which we expect at least three to fourfold for the coming year.

Provided specific figures for digital revenue contribution and aggressive growth targets for the new OTT platform, highlighting the company's digital transition.

Asked by Raj Shah

Dividend Policy and Timeline Direct

by '27, we will be eligible to ship to the main board. Hopefully, our first dividend will start from '27 onwards.

Clarified the timeline for initiating dividends, linking it to main board eligibility post-IPO.

Asked by Kapil Aggarwal

Long-term Revenue and PAT Targets Direct

we would be targeting at least next three years, we would be targeting at least 50% to 60% jump on top line. ... We expect this PAT to be anywhere between 15% to 16%.

Management provided clear, ambitious long-term financial targets for both top-line growth (50-60% jump to INR 150-160 crores by FY29) and PAT margin (15-16%).

Asked by Kapil Aggarwal

PAT Margin Compression Reasons Direct

it is absolutely temporary. ... by the government recently introduced a provision of the gratuity. So, it's a labor law. ... we have taken a hit of around INR55 lakhs on the provision for the gratuity. Secondly, the Dottstar being a new company ... we showed a loss of around INR50 lakhs, INR55 lakhs.

Management directly addressed the reasons for flat PAT margins, attributing it to specific, temporary one-time costs, reassuring investors about underlying profitability.

Asked by Vinod Shah

High Receivable Days and Reduction Plan Direct

receivable days remain elevated at around over 245 days... we expect that we will drastically reduce this number of days at least by 20%. ... we plan to get down to at least below 220 days to 210 days.

Management acknowledged a key working capital concern and provided a concrete plan and target for improvement, indicating focus on operational efficiency.

Asked by Mahesh Shetty

Future of Physical Books in K-12 Segment Direct

there won't be any downside as far as the physical books are concerned, especially for Chetana because we are mainly into K-12 segment. ... children ... need to write, they need to draw, they need to do art and craft activities, only because, otherwise they won't be able to develop their motor skills. So, books will always remain.

Management articulated a strong rationale for the continued relevance of physical books in their core K-12 segment, addressing concerns about digital disruption.

Asked by Murtaza

3 min read 7 chapters

Detailed narrative

FY26 Financial Performance and Margin Impact

Chetana Education Limited reported FY26 revenue of INR 109 crores, marking a 6.5% year-on-year growth from INR 102 crores in FY25. The company achieved a PAT of INR 13.55 crores. However, PAT margins remained flat, primarily due to a one-time provision for gratuity amounting to INR 0.55 crores and a startup loss of INR 0.55 crores from its new OTT subsidiary, Dijaa. Management clarified these impacts as temporary.

Digital Transformation and OTT Platform Expansion

The company's digital initiatives are gaining traction, with QR-enabled products now contributing 15% of total revenue, a significant increase from 3% previously. The new SaaS-based OTT platform, Dijaa, generated INR 0.95 crores in FY26 and is projected to achieve three to fourfold revenue growth in the coming year. Management aims to expand active digital schools from 75-80 to 300 in the next year and targets onboarding 5-10 lakh students onto the platform within three years, with a revenue model of INR 360 per child per year.

Strategic Initiatives and Product Diversification

Chetana is evolving beyond a traditional publisher by introducing the Smart School Project (SSP), which offers a comprehensive education fulfillment solution. This includes providing digital content, a new stationery division focused on school supply, and a teacher's portal called Books and Beyond. The company also added 80 new titles, particularly for competitive exams like Olympiad, and is aligning content with the new NEP curriculum, which mandates financial literacy.

Long-term Growth and Profitability Outlook

Management provided an optimistic long-term outlook, targeting a 50-60% jump in overall top-line to INR 150-160 crores within the next three years (by FY29). They anticipate PAT margins to improve from the current implied 12.5% to 15-16%, which would translate to a net PAT of INR 22-25 crores by FY29. The new stationery division is expected to contribute 5-7% of turnover in FY26-27, growing to over 10% by FY27-28.

Operational Efficiency and Receivable Management

The company acknowledged elevated receivable days, currently exceeding 245 days, primarily due to the cyclical nature of sales tied to CBSE and Maharashtra board schedules. To address this, management plans to introduce cash discounts and aims to reduce receivable days by at least 20%, targeting a range of 210-220 days in the coming financial year, demonstrating a focus on improving cash conversion efficiency.

Capital Allocation and Shareholder Returns

The CFO clarified that the company is 'completely a debt-free company' apart from working capital credit limits, addressing an analyst's query. Regarding shareholder returns, Chetana, having completed its IPO 1.5 years ago, expects to be eligible for the main board by 2027 and anticipates initiating its first dividend from FY27 onwards, signaling future returns to shareholders.

Impact of NEP and Future of Physical Books

The National Education Policy (NEP) is driving significant syllabus changes, with 3-4 standards changing annually across CBSE and Maharashtra boards, which management views as a growth driver. While this necessitates content revision, costs are capitalized over three years. Management also strongly asserted the enduring role of physical books for the K-12 segment, emphasizing their importance for children's motor skill development, and views digital content as a supplementary tool rather than a replacement.

This is an AI-generated summary of a publicly available earnings call transcript.

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