Aakash Institute To Bring "Acche Din" For Drowning BYJU's, But How?

In the midst of the recent controversies surrounding edtech startup Byju's, there seems to be a glimmer of hope for the company as Aakash Institute, one of its major assets, has shown remarkable financial strength. Aakash Institute, touted as Byju's potential savior through an impending IPO, reported a stellar performance in FY22. Despite Byju's grappling with financial challenges, Aakash Institute managed to not only weather the storm but also achieved a remarkable 82% surge in profits during the fiscal year.

Aakash Institute Revenue

Aakash Institute's financial statement, obtained from the Registrar of Companies, reveals a robust growth in its revenue from operations. The institute witnessed a substantial 44.56% increase in revenue, reaching an impressive Rs 1,421 crore in FY22, compared to Rs 983 crore in FY21. This is a noteworthy rebound from the decline in operating revenue reported in FY21, where it dropped to Rs 983 crore from Rs 1,214 crore in FY20.

A significant portion of Aakash Institute's revenue is derived from offering coaching services for various competitive exams, including NEET, IIT-JEE, Olympiad NTSE, and others. Fees from students accounted for a substantial 87.8% of the firm's total revenue, marking a substantial increase of 48.4% to Rs 1,282 crore in FY22. Additionally, the institute's franchisee model contributed to its income, witnessing a commendable growth of 16.8% to Rs 139 crore in the same fiscal year.

Apart from operational revenue, Aakash Institute recorded other income (non-operating) of Rs 43 crore in FY22. This income was primarily sourced from interest, manpower, and a Covid-19 rent concession. This diversification indicates a strategic approach to financial stability.

Expenditure Breakdown

Examining the expenditure side, employee benefits, encompassing staff and faculty costs, constituted 54% of the total expenditure. This cost category experienced a 35.4% surge, rising to Rs 723 crore in FY22 from Rs 534 crore in FY21. Overall expenditure, inclusive of advertising and promotional expenses, study materials, legal professional fees, information technology costs, franchise fees, and other overheads, saw a substantial increase of 34.5% to Rs 1332 crore in FY22 from Rs 990 crore in FY21.

Aakash Institute's stellar financial performance in FY22 comes at a crucial juncture for Byju's, providing a beacon of hope amid its financial challenges. The impressive revenue surge, coupled with the institute's diversified income sources, showcases a resilient financial model that could potentially contribute significantly to Byju's recovery. As Byju's navigates through turbulent times, Aakash Institute's success stands out as a testament to the institute's strategic resilience and its potential to be a key player in Byju's future financial resurgence.

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