Veranda posts strong first half as strategic reshuffle, one-offs lift profits
Veranda Learning reported 20% revenue growth and 185% profit surge in Q2 FY26, driven by higher enrolments, cost control and major restructuring moves.
Edtech firm Veranda Learning reported an improvement in its financial and operating performance for the quarter ended September 30, driven by higher student enrolments, a string of high-value courses and a slate of strategic corporate moves.
The education group recorded operating revenue of Rs 126.7 crore for Q2 FY26, roughly 20% growth on the prior year.
EBITDA rose sharply to Rs 48.3 crore, up 63% year on year, and management said EBITDA margin expanded by about 1,017 basis points to reach 38%.
These improvements were supported by a 26% rise in collections, an influx of approximately 45,000 additional students and stronger take up of AI oriented courses, high ticket programmes and B2B corporate training.
The profit after tax also showed a big jump, with PAT reported at Rs 23.3 crore, up 185% year on year.
The Chennai-based company made clear that part of this improvement reflects non-recurring items recorded in the quarter, notably a one-time, non-cash gain of Rs 133.3 crore from the sale of its vocational segment and associated processing and pre-redemption costs on non-convertible debentures. Management described these items as non recurring and said they will not affect results from the next quarter.
Beneath the one-offs the operating story remains positive. Veranda pointed to tighter marketing spends and wider use of standardised processes, which reduced operating expense and helped lift operating leverage.
The group highlighted an asset light strategy for its K-12 business alongside targeted investments in tech and operations for higher margin verticals. Collections and cash flow were materially stronger, with several courses meeting 100% of their half year targets.
The quarter also saw important corporate restructuring that will change the group’s shape going forward.
Veranda completed a maiden qualified institutional placement of Rs 357 crore. Management said approximately 87% of the proceeds were used to repay high cost borrowings, including the redemption of Rs 315 crore in non-convertible debentures, thereby substantially deleveraging the commerce vertical.
The group has demerged its commerce businesses into a newly formed entity named JK Shah Commerce Education Ltd, which will be positioned as a debt free, pure play commerce test preparation platform.
At the same time Veranda has divested its vocational arm into a 50:50 arrangement with SNVA EduTech, a move the company says will broaden international reach and sharpen focus on core verticals.
The parent will retain an approximate residual debt of Rs 224 crore as it concentrates on scaling its K-12 and government test preparation franchises.
Performance by segment was mixed. Commerce test preparation continued to be the growth engine, with operating revenue rising to Rs 86 crore in the quarter, up about 68% year on year. Government test preparation was steady at Rs 33 crore, while the academic segment was smaller and more cyclical at Rs 7 crore for the quarter.
The company outlined specific expansion plans for each vertical, including ramping up JEE and NEET focused offerings, enlarging online CA and accounting courses, and scaling residential and offline government exam coaching.
Suresh Kalpathi, executive director and chairman, said the first half of the year closed with strong momentum and highlighted priorities for Q3 such as faculty development, accelerating digital led admissions, deepening partnerships with universities and corporates and launching additional high value courses.
“All our business segments delivered strong results, and with the completion of the approval of commerce demerger and vocational divestment, we are now better positioned to strengthen and scale our core verticals- Academics and Government Test Preparation,” he noted.
Edited by Jyoti Narayan