Veranda Learning

Veranda Learning Solutions Limited reported a robust Q3 FY26, with revenue from operations increasing 52% year-on-year to INR117 crores. Gross profit grew 47% year-on-year to INR76 crores, resulting in an improved gross margin of 65% compared to 62% in the prior year. The company achieved a significant 328% year-on-year surge in EBITDA to INR53 crores, with EBITDA margins expanding to 45%, and recorded a PAT of INR17 crores for the quarter. For the 9 months ended December 2025, revenue reached INR350 crores (up 29% YoY) and PAT stood at INR114 crores, underscoring disciplined execution.

The company is actively executing its Veranda 2.0 strategy, which includes the planned demerger of its commerce vertical into J.K. Shah Commerce Education Limited. The demerger scheme has been filed with NCLT after receiving NOC from stock exchanges and SEBI clearance, with NCLT approval targeted by April 2026 and listing/trading expected by June 2026. This move aims to unlock long-term shareholder value by creating a focused and scalable commerce education platform. Additionally, the strategic disinvestment of vocational education assets into SNVA Veranda has been completed, forming a global platform projected to generate over INR250 crores in revenue and exceeding INR60 crores EBITDA by FY27.

Post-demerger, Veranda plans robust growth in its remaining core verticals, including government test preparation and academic programs. The government test prep business aims for 60-65% EBITDA growth by FY27 through franchising and launching online programs in Telugu and Hindi to expand into new markets. The K-12 managed schools segment, currently with 5,500 students, is expected to double its number of managed schools next year, also targeting 60-65% EBITDA growth, primarily through an asset-light model with REIT partnerships. Corporate costs are also expected to be significantly reduced post-demerger.

Veranda is strategically integrating AI both to create new course offerings and to enhance operational efficiencies. New courses in Gen AI and agentic AI, offered through Edureka, currently contribute 35-40% of Edureka's total revenue, a figure that is increasing monthly. Internally, AI is being piloted across various functions such as telecalling, assessments, 24/7 customer support, content generation, and mentorship. While quantification of cost savings is in early stages, the company expects AI to significantly improve customer service, content quality, and overall operational efficiency.

The company's capital allocation strategy prioritizes deleveraging, expanding its academic footprint, and buying out residual stakes. Existing debt of INR222 crores, with an average interest rate of 17%, is undergoing refinancing. A new loan of INR140 crores is being used to refinance existing high-cost debt, with the new interest rate expected to be less than 10%, which will significantly reduce future finance costs. Furthermore, the company plans to add 10 to 15 managed colleges next year, aiming to double its academic footprint by FY27.

Veranda projects a strong closing to FY26, with overall revenue expected to be INR850-900 crores and EBITDA between INR280-300 crores. The demerged J.K. Shah Commerce Education Limited is targeted to achieve INR200 crores EBITDA by FY27, with a potential $1 billion valuation upon listing. SNVA Veranda aims for over INR250 crores revenue and exceeding INR60 crores EBITDA by FY27, with a long-term goal of listing once it achieves INR100 crores+ EBITDA as a debt-free entity. The company remains focused on enhancing faculty capabilities, driving digital admissions, and strengthening partnerships to support robust growth.