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STRATEGIC MANAGEMENT - 1

EDUCOMP CASE STUDY

PGP I TERM II
25th November 2017
Why is Mr. Shantanu Prakash Worried?
ESL Balance Sheet Analysis
Figures in INR Rs. Mn.
20000

15000

10000

5000

0
2008 2009 2010 2011 2012
Net Worth Total Debt
Source: Exhibit 9 of Case
ESL Profitability ANALYSIS
(INR Rs. Mn.)

Mar‘08 Mar‘09 Mar'10 Mar'11 Mar'12


Sales Turnover 2621 5011.7 8322 10206.6 10765.1
% growth 91 66 23 5

Op. Profit 1263.3 2751.2 4700 5051 3633.4


% growth 118 71 7 -28

Net Profit 700.6 1315.9 2219 3888.7 1889


88 69 75 -51
Source: Exhibit 11 of Case
ESL COST ANALYSIS
(% of TURNOVER)
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
Mar'8 Mar'9 Mar'10 Mar'11 Mar'12
Employee Cost Other Mfg. Exp. Selling & Admin Exp. Misc. Exp.
Source: Exhibit 11 of Case
ESL CASH FLOW ANALYSIS (Rs.mn.)
8000

7000

6000

5000

4000

3000

2000

1000

0
2008 2009 2010 2011 2012
Operating Activities (cash inflow) Financing Activities (cash inflow)
Investing Activities (cash outflow)

Source: Exhibit 12 of Case


INDIAN EDUCATION SECTOR REVENUES
(US$ IN MILLION)
40000
35000
30000
25000
20000
15000
10000
5000
0
Pre-School K-12 Higher Ed. Voc. Trg. Others
2009 2012E

Source: Exhibit 2 of Case


INDIAN EDUCATION SECTOR GROWTH
(CAGR %)

Others

Voc. Trg.

Higher Ed.

K-12

Pre-School

0 5 10 15 20 25 30 35 40

Source: Exhibit 2 of Case


ESL INITIATIVES

Source: Exhibit 5 of Case


Turnover & PAT of major players (INR mn.)
12000

10000

8000

6000

4000

2000

ESL Core Everonn NIIT Aptech


-2000

Turnover PAT
Source: Exhibit 8 of Case
COMPETITOR ANALYSIS - MARKET SHARES (%)

24 35

10

28

ESL Core Everonn NIIT Aptech


Source: Exhibit 8 of Case
RATIO ANALYSIS

D/E Ratio

PAT/Total Income (%)

ROCE (%)

Quick Ratio

Current Ratio

-10 -5 0 5 10 15 20 25 30

Aptech NIIT Everonn Core ESL


Source: Exhibit 8 of Case
WHAT ARE THE CHALLENGES EDUCOMP IS FACING?
SALES OF BUSINESS SEGMENTS
(Rs. Mn.)
12000

10000

8000

6000

4000

2000

0
2009 2010 2011 2012
SLS K12 HLS O&R
Source: Exhibit 4 of Case
WHAT ARE THE FUTURE ALTERNATIVES?
Value Chain - ESL

Infrastructure (Franchises & Partnerships)


Human Resource Management (Training Teachers)
Technology Development (Patented Digital Content)

Procurement
Inbound Operations Outbound Marketing Service
Logistics Logistics & Sales
Smartclass
Content B2B
Creation Market
Share

Elapsed Time - Value added time cost