CL Educate

CL Educate reported a robust 58% year-on-year increase in consolidated revenue, reaching ₹149.84 crores for Q1 FY26. This growth was primarily fueled by the DEXIT Global acquisition, which contributed ₹59 crores in revenue, a 55.26% YoY increase for the segment. Consolidated operating EBITDA also saw a significant jump of 76% YoY to ₹21.7 crores, demonstrating improved operational efficiency and strong performance from the newly integrated business.

Despite strong top-line growth, the company recorded a consolidated net loss of ₹3.71 crores in Q1 FY26, a decline from a profit of ₹4.2 crores in the prior year. This was largely due to a sharp increase in finance costs, which rose by ₹11.98 crores YoY to ₹12.7 crores, attributed to the ₹200 crore loan taken for the DEXIT acquisition at an 11.9% interest rate. Additionally, depreciation and amortization expenses increased by ₹4 crores YoY, primarily from intangible assets created during the DEXIT purchase price allocation.

The EdTech segment, particularly the test prep vertical, experienced a muted quarter with marginal revenue decline and flat EBITDA. This was attributed to the impact of CUET and a broader market shift towards self-prep models in MBA education, leading to students opting for shorter, lower-value programs. In response, CL Educate is recalibrating its strategy by launching smaller value SKUs to maintain volumes despite decreased average pricing, while BBA and IPM products showed resilience with a 12% increase in billing.

The MarTech division recorded a modest 7% revenue growth, reaching ₹37.2 crores, though its EBITDA dipped slightly to ₹2.5 crores due to investment in building capabilities. The segment is actively pivoting towards an AI-first practice, with initiatives like the VIRSA lead generation tool gaining traction with major clients and new resellers onboarded in Singapore and Indonesia. Management expects this transformation to be completed by year-end, driving margin expansion from next year onwards, with larger benefits accruing in FY27.

DEXIT Global continues to be a strategic asset, with Q1 FY26 revenue growing 55.26% YoY to ₹59 crores and EBITDA more than doubling to ₹12.8 crores. The company successfully retained key clients post-acquisition and secured new contracts, including a ₹24 crore deal with the AYUSH Ministry, a ₹14 crore deal with IIBF, and a ₹15 crore deal with NISM. Over 1.7 million assessments were executed in the quarter, and management is exploring cross-leveraging contacts with the MarTech business for future growth.

Newer initiatives like the Utsav (social events and weddings) business are gaining traction, with five wedding projects closed and more in the pipeline for Q2 and Q3 FY26, expected to provide significant tailwind. The 361 DM business also reported its first positive EBITDA of ₹8 lakhs in Q1 FY26 after several quarters, with expectations of rapid revenue and EBITDA growth over the next four to six quarters, signaling a turnaround for this segment.