market research report : coaching classes market in india 2012
DESCRIPTION
For the complete report, get in touch with us at : [email protected] Indian education sector is considered to be recession proof primarily due to the willingness among consumers to spend on this sector. Across the board, from the upper classes to the bottom most stratum of the social hierarchy, expenditure on education accounts for a sizable portion of family incomes. Coaching classes segment, though unorganized and unregulated, boasts of high profit margins. Due to the changing economic scenario, need for extra and supplemental education is urgently felt by both students and their parents. Known as the world of shadow of education, coaching classes have grown phenomenally in India and is only to proliferate further in future. The report begins with an overview of the education sector in India with a clear segmentation of the Indian education system. This is followed by a representation of a macro-overview of the system divulging key data points including literacy rate in India, demographic split in education, budget allocation for education and Five year plan outlay for the same. As we proceed, education sector has been described briefly along with its market size and growth aided with inclusion of students enrolling for higher education and expenditure on education by Indians. This is followed by the overview on coaching classes market along with market size and growth as well as the market segmentation. An analysis of cost incurred and revenue garnered is provided with the help of a cost and revenue model proceeded by the business model of coaching classes. The section is concluded by a Porter’s Five Forces Analysis. The following section deals with the sub-segments in the coaching classes sector detailing each sub-segment’s description. An analysis of the drivers explains the factors for growth of the market and includes expenditure on education, lucrative business opportunity, rise in number of students opting for foreign education, working parents with higher disposable income, Right to Education Act and infrastructural bottlenecks in formal education. As education in India is considered to be the only means towards betterment of one’s social status; spending on education has never taken a hit even in times of recession. Parents indulge in spending almost an equal amount of primary school fees in coaching classes to further their kids’ exposure and grooming. Owing to the absence of Government regulations, a successful coaching institute can hike program fees thus making it extremely lucrative from a business perspective. Increase in number of students opting for foreign education has also led to enhanced demand for these classes. With rising number of students looking at foreign shores for higher education, cracking entrance tests at such universities translate into rising demand for coaching institutes.TRANSCRIPT
Coaching Class Market IndiaCoaching Class Market ‐ India
April 2012
Executive Summary
MarketEducation sector is considered to be growing at a1% annually
Coaching Class market, a sub‐segment of the informal education sector, is expected to grow at a2% CAGR over 20‐‐‐20‐‐
Drivers &
Drivers–Expenditure on education–Lucrative business–Rise in number of students opting for foreign education
Challenges–Rise in input costs
–Erratic power supply across the country
Challenges foreign education–Working parents with higher disposable income
–Right to Education Act– Infrastructural bottlenecks in formal education
country
–Rise in local manufacturers
education
Online tutorial increases baseCoaching class for beginnersCoaching institute make foray into formal education system
Trends
Franchising mode of operation Introduction of package courses Increased PE activity
Competition
Major Players
Company 1 Company 2 Company 3
education system
2COACHING CLASS MARKET IN INDIA 2012.PPT
Company 4 Company 5 Company 6
•Introduction
•Market Overview
•Segments
•Drivers & Challenges
•Trends
•Competition
•Strategic Recommendations
•Appendix
3COACHING CLASS MARKET IN INDIA 2012.PPT
Though unregulated, coaching class market boasts of high profits
• Also referred to as “sweat schools”, coaching class market is primarily a3 and a4
Coaching Class Market – Overview
600INR bn
e% TU
Market Size and Growth
•Operates as a connecting link between academic standards in mainstream system and competitive standard of entrance examinations of different professional courses
200
400
e% TS
RQP
p
• It accounts for majority of the informal education market in the country
• The sector is considerably fragmented and regional in nature
020--20--20--20--20-- 20--
Coaching Classes Segmentationnature
• Indian parents are not a5 in matters related to education which paves way for the coaching class sector towards growth even though it comes at high
g%S2S1
cost
• This is a lucrative area for a6 players as this constitutes the only segment within the education spectrum that boasts of a7and a8 f%
4
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
Drivers & Challenges – Summary
DriversDrivers
Expenditure on education
Lucrative businessLucrative business
Rise in number of students opting for foreign education
Working parents with higher
Challenges
Change in exam format
Coaching class degrading standards ofg p gdisposable income
Right to Education Act
Infrastructural bottlenecks in formal
Coaching class degrading standards of students
Infrastructural bottlenecks in formal education
5COACHING CLASS MARKET IN INDIA 2012.PPT
Trends – Summary
Online tutorial increases base
Coaching class for beginners
`Key Trends
Coaching institutes make foray into formal education system
Franchising mode of operation
Introduction of package courses
6
Increased PE activity
COACHING CLASS MARKET IN INDIA 2012.PPT
SAMPLE Public: Domestic Company – Company 1 (1/4)
Company Information Offices and Centres – India
Corporate AddressClace 1, Country 1
Tel No. +123456
Fax No. +123456
Website http://www.abc.in/
Year of Incorporation 19‐‐
Place
Products and Services
Ticker Symbol ‐‐
Stock Exchange ‐‐
Key People
Products and Services
Category Products/Services
E1 C1
N D i tiName Designation
P1 D1
P2 D2
P3 D3
7
P4 D4
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
i i l S h K i
Public: Domestic Company – Company 1 (2/4)
Financial Snapshot Key Ratios
Particulars y‐o‐y change (2011‐10)
2011 2010 2009 2008
Profitability RatiosOperating Margin
Profit / Loss
Total Income
1,000 300
ProfitINR mn
Total IncomeINR mn
DNet MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets
0
500
0
100
200
20‐‐20‐‐
C
20‐‐
B
20‐‐
A
Financial Summary
• The company incurred a net profit of INR ‐‐mn in FY 2011, as compared to net profit of INR ‐‐mn in FY 20‐‐
• The company reported total Income of INR ‐‐mn in FY 20‐‐, registering an increase of p1% over FY 20
Return on Fixed Assets
Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)
Interest costs (% of Sales)registering an increase of p1% over FY 20‐‐
• The company earned an operating margin of p2% in FY 20‐‐ a decrease of ‐‐ percentage points over FY 20‐‐
• The company reported debt to equity ratio of ‐‐ in FY 20‐‐, a decrease of p3% over FY 20‐‐
Interest costs (% of Sales)
Liquidity RatiosCurrent RatioCash Ratio
Leverage RatiosDebt to Equity Ratio
b i l iFinancial Summary
Indicators Value (04/04/2012)Market Capitalization (INR) ATotal Enterprise Value (INR) B
Debt to Capital RatioInterest Coverage Ratio
Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover
8
EPS (INR) CPE Ratio (Absolute) D
Working Capital TurnoverCapital Employed Turnover
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
Public: Domestic Company – Company 1 (3/4)
Key Business Segments Key Geographic Segments
80%100%
Service 1
80%100%
Country 1
0%20%40%60%80%
100%
0%20%40%60%80%
100%
0%20‐‐
0%20‐‐
Business Highlights (1/2)
Description News
Operations
• Formerly known as c1, it is an education concern and is now called c2
• Is an education concern with operations in 4 verticals namely c3.c4.c5 and c6
H h f f l b• Has a strength of ‐‐ faculty members
•Has ‐‐ company operated training centers and ‐‐ franchisee centers
9
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
Public: Domestic Company – Company 1 (4/4)
Business Highlights (2/2)
Description News
•Has received equity investment of INR ‐‐mn from c7 and c8Investment
•Has received equity investment of INR ‐‐mn from c7 and c8
•Has mobilised INR ‐‐mn through Initial Public Offering (IPO) route
• In areas of tutorial services, it caters to students both from high school and post high school for competitive exams namely AIEEE, SLEEE, IITJEE and AIPMT
Informal Education • It processes its services through s1 services, s2, s3, s4
• A new segment added to this portfolio is the s5 through c9 Centers which is are c10 over s6 along with the s7 at c11
Expansion Plans
• Is looking at establishing a residential campus at c12 to students taking tutorial services
• Is also aiming at developing a link with the Government to provide tutorial services to state government school students
N P d t•Has introduced a c13 to provide educational content , questions with solutions, career
New Productp , q ,
counselling services to aspirants of IITJEE, AIEEE and AIPMT
10
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
SAMPLE Private: Domestic Company – Company 1 (1/4)
Company Information Offices and Centres – India
Corporate Address Place 1, Country 1
Place
Tel No. +123456
Fax No. +123456
b h // b /
Products and Services
Website http://www.abc.com/
Year of Incorporation 19‐‐
Key People
Products and Services
Category Products/Services
E2 P1
N D i ti
Head Office
Name Designation
P5 D5
P6 D6
P7 D7
11
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
i i l S h K i
Private: Domestic Company – Company 1 (2/4)
Financial Snapshot Key Ratios
Particulars y‐o‐y change (2010‐09)
2010 2009 2008 2007
Profitability RatiosOperating Margin
Profit / Loss
Total Income
1,000 100
ProfitINR mn
Total IncomeINR mn
Y
Net MarginProfit Before Tax MarginReturn on EquityReturn on Capital EmployedReturn on Working CapitalReturn on Assets
400
600
800
20
40
60
80
X
Financial Summary
Return on Fixed Assets
Cost RatiosOperating costs (% of Sales)Administration costs (% of Sales)
Interest costs (% of Sales)
0
200
‐20
0
20‐‐20‐‐20‐‐20‐‐
Interest costs (% of Sales)
Liquidity RatiosCurrent RatioCash Ratio
Leverage RatiosDebt to Equity Ratio
• Company incurred a net profit of INR ‐‐mn in FY 20‐‐, as compared to net profit of INR ‐‐mn in FY 20‐‐
• It reported total Income of INR ‐‐mn in FY 20‐‐, registering an increase of r1% over FY 20‐‐
Debt to Capital RatioInterest Coverage Ratio
Efficiency RatiosFixed Asset TurnoverAsset TurnoverCurrent Asset Turnover
• Earned an operating margin of r2% per cent in FY 20‐‐ an increase of ‐‐ percentage points over FY 20‐‐
• The company reported debt to equity ratio of ‐‐ in FY 20‐‐, a decrease of r3% over FY 20‐‐
12
Current Asset TurnoverWorking Capital TurnoverCapital Employed Turnover
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
Private: Domestic Company – Company 1 (3/4)
Description News
•Has more than ‐‐ years of experience in preparing students for Boards as well as
Business Highlights (1/2)
Presence
•Has more than ‐‐ years of experience in preparing students for Boards as well as competitive examinations
• Boasts of a figure of ‐‐ students studying under the z1 brand every year for classroom and non‐classroom programs
•Has a network of ‐‐ study centers across the country along with over ‐‐ examination centers
•Has three divisions namely z2, z3 and z4
• z5 provides training and coaching services to students preparing for competitive exams in
Divisions
• z5 provides training and coaching services to students preparing for competitive exams in z6
• z7 trains students preparing for competitive exams in the z8
• z9 looks at coaching students of class VIII, IX and X preparing for Olympiad, NTSE as well as their Board exams
E‐learning•Has launched z10 which will combine z11 and z12, z13, z14, z15, z16, z17, z18 as well as z19
13
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
Private: Domestic Company – Company 1 (4/4)
Description News
• Besides regular classroom and distance learning courses such as correspondence it also
Business Highlights (2/2)
Courses • Besides regular classroom and distance learning courses such as correspondence it also offers courses for z20
• z21 aims at providing free coaching to deserving students wherein total tuition fee for integrated ‐‐ years course 20‐‐ will be waived off
Freeship Programs
• An amount of INR ‐‐ is slated to get waived off
• This will only cater to students who have studied in Delhi Government Schools for at least ‐‐ years
• Further it will judged on the basis of Admission cum Scholarship Test conducted during• Further, it will judged on the basis of Admission cum Scholarship Test conducted during June every year
14
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT
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COACHING CLASSES MARKET IN INDIA 2012.PPT