CL Educate — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

CL Educate reported strong revenue and EBITDA growth for the first nine months of FY26, primarily driven by the acquired DEX business and robust MarTech performance. However, the company recorded a net loss due to significant finance costs and INDAS adjustments related to the DEX acquisition debt. The EdTech segment faced structural challenges, with management anticipating continued pressure for the next 2-4 quarters, while the newly launched mySathi initiative shows promising early traction.

Highlights

  • Total revenue for the first nine months of FY26 grew 67% YoY to ₹445 crores.

  • EBITDA for the nine-month period increased 120% YoY to ₹59 crores.

  • DEX business revenue for 9 months grew to ₹194 crores, with its EBITDA contribution rising from ₹34 crores to ₹42 crores.

  • DEX margins improved by 300 basis points over the last year.

  • MarTech international revenues grew from ₹33 crores to ₹41 crores in the nine-month period.

  • Successful launch of the mySathi platform with 18 universities already onboarded and 14,000 applications.

Concerns

  • PAT for the nine-month period was negative ₹16 crores, down from ₹4.4 crores last year, primarily due to INDAS impact (₹28 crores) and increased finance costs (₹21 crores actual interest).

  • EdTech business revenue for 9 months declined from ₹150 crores to ₹127 crores due to structural shifts, with a difficult period expected for another 2-4 quarters.

  • CUET business is not performing as expected due to unpredictability and pricing pressure, limiting its value contribution.

  • Short-term cash stress due to the ₹210 crore DEX acquisition debt, necessitating a promoter loan.

Key financials

  1. Total Revenue (9-month) ₹445 Cr +67%YoY
  2. EBITDA (9-month) ₹59 Cr +120%YoY
  3. PAT (9-month) ₹-16 Cr
  4. Finance Cost (9-month) ₹40 Cr
  5. INDAS Impact on PAT (9-month) ₹28 Cr

What they filed

Q1 FY27: revenue down 12.5%, net profit up 55.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue98 70 97 146 164 +68%120 +73%118 +21%128 −12%
EBITDA11 -0 1 18 24 +121%4 +2607%3 +199%17 −1%
Net profit3 -3 -16 -4 5 +54%-17 −443%-10 +34%-2 +55%
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.

Segment breakdown

Share of Revenue
₹445 Cr Total
  • DEX Business (9-month) ₹194 Cr 43.6%
  • EdTech Business (9-month) ₹127 Cr 28.5%
  • MarTech Business (9-month) ₹124 Cr 27.9%

Capital allocation

high confidence
  • Debt Gross ₹210 Cr Cost 11.9% · Maturity: 6 years, structured repayment
    • New borrowing Loan taken for DEX acquisition, on the books of the parent entity, with a 6-year tenure and structured repayment (lighter in first 3 years, loaded in final 3 years). ₹210 Cr
    • New borrowing Promoters extending a loan as an advance to alleviate short-term cash stress, at arm's length terms, pending a formal fundraise process (expected in 4-6 weeks). ₹50 Cr
    Manoj, it's a six year loan with a rate of interest of 11.90%. And a structured repayment, which is loaded towards the back end of the final three years with the first three years being a little bit lighter.
  • Liquidity Liquidity disclosed Company is experiencing short-term cash stress, which is being addressed by a promoter loan and planned fundraise.
    However, there is a short term little bit of a cash stress situation, which is acute and short term. And it is in that context that we as a board have looked at raising a small amount of capital...

Guidance & targets

Volume

  • DEX Exam Counts Volume · this year · High confidence 70 lakh
    And in terms of what we're looking at in terms of delivery this year, we're going to do about close to 70 lakh exam counts with about 25 lakhs of those coming across our certification and accreditation business and about 45 lakhs coming from our recruitment and entrance exam business.

    — Arjun Wadhwa

  • MBA Applications (Platform) Volume · future · High confidence 14,000

    Previously 10,000 → 14,000

    So here, from something like 10,000 applications forms sold from a platform, we are likely to go to 14K and this is likely to grow, because the next three months is when the significant amount of application activity happens.

    — Gautam Puri

Growth

  • DEX Business Growth Growth · next three years · Medium confidence very solid growth
    And our experience of now having run it for four quarters, with the top line growing, and the EBITDA, which is in the 45-50 crore range, it looks very solid in terms of growth over the next three years.

    — Satyanarayanan

Business Outlook

  • EdTech Structural Shift Duration Business Outlook · future · High confidence another two to four quarters
    And the difficult period is likely to continue for another two to four quarters.

    — Gautam Puri

Revenue Growth

  • Platform Monetization (EdTech) Revenue Growth · future · High confidence about 10%
    The Platform Monetization that we do, allowing colleges and universities to reach out to our students is doing fairly well. And that's a business that is likely to grow by about 10%.

    — Gautam Puri

Revenue Mix

  • MarTech International vs. Domestic Revenue Revenue Mix · next three to four years · Medium confidence almost equal
    I think over the next three to four years, we expect international revenues to become almost equal to the domestic revenues.

    — Nikhil Mahajan

Investment

  • Utsav Cash Investment Investment · next 12 to 18 months · High confidence ₹1-1.5 crores
    We are expecting the total cash investment required for maintaining overheads and keep rolling up and expanding business to be in the range of one, one and a half crores in the next 12 to 18 months.

    — Nikhil Mahajan

Profitability

  • Utsav Business Break-even Profitability · next 12 months · High confidence cash break even
    And I think by the end of the next 12 months, we should hit the cash break even situation and move forward from there to a cash positive situation.

    — Nikhil Mahajan

Revenue

  • DEX Business with ICAI Revenue · this year · High confidence ₹20-25 crores
    Yes, we are already working with ICAI. We will do between 20 to 25 crores of business with them this year.

    — Arjun Wadhwa

Debt

  • Debt-free status Debt · next 24 months · High confidence debt free
    And, and we will, we will look at this as a small effort in the overall path to becoming debt free over the next 24 months.

    — Satyanarayanan

What to watch in Q4 FY26

EdTech Business Recovery

Next quarter
Current Declining revenue, difficult period expected for 2-4 quarters
Target Signs of stabilization or recovery in revenue/volumes

Why it matters

Core business facing structural headwinds, recovery is key to overall profitability and validating strategic responses.

The difficult period is likely to continue for another two to four quarters.

Risks & concerns

  • Negative PAT due to Finance Costs and INDAS

    high

    The company reported a net loss primarily due to high finance costs from the DEX acquisition debt and significant INDAS accounting entries, impacting reported profitability.

    Management acknowledged

  • EdTech Structural Shift

    medium

    The EdTech market is undergoing a structural shift towards low-value products, leading to declining revenues and a difficult period expected for 2-4 quarters.

    Management acknowledged

  • Short-term Cash Stress

    medium

    A short-term cash stress situation has arisen due to the DEX acquisition, being addressed by a promoter loan and planned fundraise.

    Management acknowledged

  • CUET Business Underperformance

    low

    The CUET business is not performing as expected due to issues with credibility, unpredictability, and pricing pressure, limiting its growth potential.

    Management acknowledged

Q&A highlights

7 direct
CUET business performance and value Direct
The issue with CUET has been the way it has been conducted in the last three, four years, it has lost significant amount of credibility among the students and they don't look at it seriously. So, so while they prepare for it, they go for the shorter versions or the, let's say the low-price variants.

Clarifies why the CUET business is underperforming and its limited potential as a growth driver due to market perception and pricing.

Asked by Guneet Singh

Standalone losses and DEX business seasonality Direct
The loan that we have taken for the DEX acquisition, the ₹210 crore loan that I spoke about earlier, is on the books of the parent entity. And when you look at the standalone numbers, the interest cost that comes from that loan features on that, on the books of that entity... DEX business has annuity-like certification business (365 days) and seasonal recruitment/entrance exams (H1 heavy).

Explains the reasons for standalone losses (debt interest, INDAS impact) and provides insight into the operational nature and seasonality of the DEX business.

Asked by Guneet Singh

Fundraise plans and promoter loan to address cash stress Direct
However, there is a short term little bit of a cash stress situation, which is acute and short term. And it is in that context that we as a board have looked at raising a small amount of capital, while our much clearly articulated goal of becoming entirely deleveraged in 24 to 36 months that stands... we as core promoters, we are extending some loan at terms that are determined at an arm's length approved by the good governance formulae...

Reveals a short-term cash stress and the immediate steps taken by promoters to provide liquidity, alongside the long-term goal of becoming debt-free.

Strategic partnerships for EdTech business Partial
See, strategic partnerships, that discussion keeps happening on and off with different players. I would not take name of any. And even at this point of time, we had discussions with a couple of players. But it has to make sense for both of us. And since nothing of the sort has happened, there's nothing, let's say, on the paper right now.

Indicates that while strategic partnerships are being explored for the struggling EdTech segment, no concrete deals have materialized yet, suggesting ongoing challenges.

Asked by Rahul Bansali

MarTech international vs domestic revenue mix and VIRSA performance Direct
I think over the next three to four years, we expect international revenues to become almost equal to the domestic revenues... Regarding your question of VIRSA, I think we have started deploying it. We are currently doing a pilot for two customers in the US. We're also doing a pilot for Salesforce...

Provides a long-term target for MarTech's international expansion and an update on the pilot phase and commercialization timeline for the VIRSA platform.

Asked by Henin

Utsav business cash burn and path to profitability Direct
We are expecting the total cash investment required for maintaining overheads and keep rolling up and expanding business to be in the range of one, one and a half crores in the next 12 to 18 months. As the business scales up with each successful project closure, there is a cash surplus which is getting generated. And I think by the end of the next 12 months, we should hit the cash break even situation...

Outlines the investment required for the Utsav business and provides a clear timeline for achieving cash break-even, offering visibility on this new venture's financial trajectory.

Monetization of non-core assets Direct
We have a land parcel in Raipur for a school we used to run, and we have a few buildings available in Delhi and Mumbai. The total worth of those is about between 25 to 30 crores. We continue to look for buyers for those...

Identifies specific non-core assets and their estimated value, indicating potential for future capital generation through divestment.

DEX business engagement with ICAI/ICSI Direct
Yes, we are already working with ICAI. We will do between 20 to 25 crores of business with them this year... We're also in talks with them whether the foundation exam can be moved to a CBT type modular exam... We also remain engaged with ICSI specifically in terms of looking at modules that we can do with them.

Highlights significant business opportunities and ongoing discussions with key regulatory bodies like ICAI and ICSI, demonstrating potential for expansion in the professional assessment space.

3 min read 7 chapters

Detailed narrative

Finance Overview & Profitability Impact

CL Educate reported a 67% YoY growth in total revenue for the first nine months of FY26, reaching ₹445 crores, and a 120% increase in EBITDA to ₹59 crores. However, the company posted a net loss of ₹16 crores, down from a profit of ₹4.4 crores in the prior year. This decline was primarily attributed to a significant increase in finance costs (₹40 crores, with ₹21 crores actual interest) and depreciation, exacerbated by INDAS accounting entries totaling ₹28 crores and an additional ₹5.5 crores impact from new labor codes.

DEX Business Performance & Outlook

The Digital Assessments (DEX) business, acquired recently, was a key growth driver, contributing ₹194 crores in revenue for the nine-month period, up 12% YoY from ₹173 crores. Its specific EBITDA contribution rose from ₹34 crores to ₹42 crores, with margins improving by 300 basis points. Management expects the DEX business to deliver close to 70 lakh exam counts this year and anticipates 'very solid growth' over the next three years, driven by annuity-like certification services and new university clients like IIM-Bangalore and Ashoka University.

EdTech Business Challenges & Strategic Response

The EdTech segment experienced a revenue decline from ₹150 crores to ₹127 crores for the nine-month period, facing a 'structural shift' in the market towards lower-value products. Management expects this 'difficult period' to persist for another two to four quarters. In response, CL Educate is focusing on integrating online and offline coaching, expanding into smaller, high-volume products like test series, and leveraging AI for academic support. The Platform Monetization business within EdTech is expected to grow by about 10%.

MarTech Business Growth & International Expansion

The MarTech business showed robust growth, with revenues increasing from ₹116 crores to ₹124 crores for the nine-month period. International revenues were particularly strong, growing from ₹33 crores to ₹41 crores, while Indian revenues saw a more modest increase from ₹78 crores to ₹81 crores. Management aims for international revenues to equal domestic revenues within the next three to four years, driven by new blue-chip clients and the re-engagement of key customers like Air India. The VIRSA platform is currently in pilot phases with two US customers and Salesforce, with commercial deployment expected in 2-4 quarters.

mySathi Initiative Launch & Potential

CL Educate launched mySathi.org, a Scholastic Aptitude Test for Higher Ed Institutions, leveraging its DEX platform. This initiative offers an on-demand, computer-adaptive test for 21st-century skills, with 18 universities already onboarded and 14,000 applications processed. The company sees mySathi as a 'game-changing innovation' with potential for significant monetization through EasyApply, practice tests, and learning zones, aiming for a multiplier effect by integrating with university partnerships and generating revenue from application forms.

Capital Structure and Debt Management

The company incurred a ₹210 crore loan for the DEX acquisition, which is on the parent entity's books, carrying an 11.90% interest rate over six years with structured repayments. To address short-term cash stress, promoters are providing an interim loan of up to ₹50 crores at arm's length terms, pending a formal fundraise. Management reiterated its commitment to becoming debt-free within the next 24 months and is exploring options for raising capital at the parent or subsidiary level, with some inbound conversations already underway.

Utsav Business Development & Non-core Asset Monetization

The Utsav business, focusing on social events and luxury weddings, has accrued ₹6 crores in revenue from four events since its nine-month inception. Management anticipates a cash investment of ₹1-1.5 crores over the next 12-18 months to maintain and expand operations, with a target to reach cash break-even within the next 12 months. Additionally, the company is looking to monetize non-core assets, including a land parcel in Raipur and buildings in Delhi/Mumbai, estimated to be worth ₹25-30 crores, to further strengthen its financial position.

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