CL Educate Limited Q3 FY26 Earnings Call Summary

Summary

CL Educate Limited - Q3 FY2026 Earnings Call Summary Friday, February 06, 2026, 4:00 PM

Event Participants

Executives 4 Arjun Wadhwa (Group CFO), Gautam Puri (Vice Chairman & MD), Nikhil Mahajan (Group CEO & Executive Director), Satya Narayanan R (Chairman)

Analysts 4 Guneet Singh, Henin, Manoj Bagadia, Rahul Bansali

Financials & KPIs

Geographic & Segment Commentary

• Digital Assessment (DEX): Now rebranded as DEXIT Global, this segment achieved a 100% client rollover and added new prestigious accounts like IIM-Bangalore and the Armed Forces (DGAFMS). The business is split between steady annuity certification (IRDAI, ICAI) and seasonal recruitment exams, with margins expanding 300 bps through operational efficiencies. Strategic focus is on expanding university-led assessments and international certification programs.

• EdTech (Test Prep & Publishing): Facing a structural shift where students prefer low-cost digital variants and “Attend from Anywhere” (AfA) hybrid models. While MBA segments saw pressure due to paper difficulty and pricing shifts, the BBA-IPM segment is emerging as a strong growth driver as more IIMs/IITs launch undergraduate programs. Publishing remains steady with author-led titles and 10% consistent growth, focusing on high-velocity distributors.

• MarTech (Kestone): International revenues now contribute 35% of the mix, with the segment adding blue-chip clients like Adobe and Zoho. Domestic growth was muted by the temporary exit of Air India (following a crash) and structural changes at AWS, though both are recovering. The segment is diversifying beyond CMOs into CXO community engagement and luxury social events (Utsav).

Company-Specific & Strategic Commentary

• mySathi Initiative: A disruptive “on-demand” computer adaptive testing platform using AI to evaluate 21st-century skills (4Cs). It features a ₹500 price point to drive volume, with 18 universities already empanelled and a monetization path reaching ₹6,000-8,000 per student via application fees and learning zones.

• Debt & Deleveraging: Management maintains a target to be debt-free in 24-36 months. To address short-term cash stress from the ₹210 crore DEX acquisition loan, the board approved a ₹50 crore fundraise, initially supported by promoter loans at arm’s length.

• Asset Monetization: The company identifies ₹25-30 crores worth of non-core assets, including land in Raipur and buildings in Delhi/Mumbai, earmarked for sale to reduce leverage.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

DEX Client Retention & Growth

• Question: Is there seasonality in DEX and how is client retention? (Guneet Singh)
• Answer: Certification (annuity) is steady year-round; recruitment/entrance is seasonal. 100% rollovers achieved post-acquisition, and IRDAI renewed for 3 years at higher prices (Arjun Wadhwa).

EdTech Structural Challenges

• Question: Why is EdTech revenue down and what is the recovery path? (Gautam Puri)
• Answer: Students are moving to low-price variants and self-study. We are breaking the wall between online and offline (AfA model) and focusing on BBA-IPM, which is seeing strong demand as IIMs launch UG courses (Gautam Puri).

Fundraising & Promoter Support

• Question: What is the plan for the ₹50 crore fundraise? (Satya Narayanan)
• Answer: We are in talks with financial and strategic investors; some interested in the parent, some in DEX. Promoters are providing immediate bridge loans to ensure operations aren’t stressed during the 6-10 week fundraising window (Satya Narayanan).

MarTech International Scaling

• Question: How is the US business and VIRSA performing? (Henin)
• Answer: International growth is 24% YoY. VIRSA is in pilots with Salesforce and two other US clients; commercial ramp-up takes 2-4 quarters from pilot (Nikhil Mahajan).

Key Takeaway

CL Educate reported a strong 67% YoY revenue growth in 9M FY26, reaching ₹445 crores, primarily fueled by the successful integration of DEXIT Global (formerly NSEIT). While EBITDA rose 120% to ₹59 crores, the bottom line remained pressured by high finance costs related to the ₹210 crore acquisition loan and INDAS adjustments, resulting in a PAT loss of ₹16 crores. Strategically, the company is pivoting toward “mySathi,” an AI-driven, on-demand assessment platform designed to disrupt the university admissions landscape with 18 colleges already signed. Despite structural headwinds in the traditional MBA test-prep market leading to a 15% revenue dip in EdTech, the company is seeing robust growth in BBA-IPM and international MarTech services. Management remains focused on a 24-36 month deleveraging roadmap, supported by a ₹50 crore capital raise and non-core asset sales, to transition back to a debt-free status while scaling its high-margin digital assessment and international marketing businesses.