For the complete report, get in touch with us at : info@netscribes.com 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.

1. Coaching Class Market ‐
Coaching Class Market India
April 2012

2. Executive Summary
 Education sector is considered to be growing at a1% annually
Market  Coaching Class market, a sub‐segment of the informal education sector, is expected to grow at
a2% CAGR over 20‐‐‐20‐‐
Drivers Challenges
– Expenditure on education – Rise in input costs
– Lucrative business
– Erratic power supply across the
Drivers & – Rise in number of students opting for
foreign education
foreign education country
Challenges
– Working parents with higher disposable – Rise in local manufacturers
income
– Right to Education Act
– Infrastructural bottlenecks in formal
education
 Online tutorial increases base  Franchising mode of operation
Trends  Coaching class for beginners  Introduction of package courses
 Coaching institute make foray into formal  Increased PE activity
education system
education system
Major Players
Competition Company 1 Company 2 Company 3
Company 4 Company 5 Company 6
COACHING CLASS MARKET IN INDIA 2012.PPT 2

3. •Introduction
•Market Overview
•Segments
•Drivers & Challenges
•Trends
•Competition
•Strategic Recommendations
•Appendix
COACHING CLASS MARKET IN INDIA 2012.PPT 3

4. Though unregulated, coaching class market boasts of high
profits
Coaching Class Market – Overview Market Size and Growth
• Also referred to as “sweat schools”, coaching class INR bn
market is primarily a3 and a4 600 e% U
T
• Operates as a connecting link between academic S
400 R
standards in mainstream system and competitive Q
P
standard of entrance examinations of different 200
p
professional courses
0
• It accounts for majority of the informal education
20-- 20-- 20-- 20-- 20-- 20--
market in the country
• The sector is considerably fragmented and regional in Coaching Classes Segmentation
nature
S1 S2
• Indian parents are not a5 in matters related to
g%
education which paves way for the coaching class
sector towards growth even though it comes at high
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%
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 4

5. Drivers & Challenges – Summary
Drivers
Expenditure on education
Lucrative business
Lucrative business
Challenges
Rise in number of students opting for
foreign education Change in exam format
Working parents with higher
gp g Coaching class degrading standards of
Coaching class degrading standards of
disposable income students
Right to Education Act
Infrastructural bottlenecks in formal
Infrastructural bottlenecks in formal
education
COACHING CLASS MARKET IN INDIA 2012.PPT 5

6. Trends – Summary
Online tutorial increases base
Coaching class for beginners
Coaching institutes make foray into formal education system
Key Trends
`
Franchising mode of operation
Introduction of package courses
Increased PE activity
COACHING CLASS MARKET IN INDIA 2012.PPT 6

7. Public: Domestic Company – Company 1 (1/4)
Company Information
SAMPLE
Offices and Centres – India
Clace 1, Country 1
Corporate Address
Tel No. +123456
Place
Fax No. +123456
Website http://www.abc.in/
Year of Incorporation 19‐‐
Ticker Symbol ‐‐
Stock Exchange ‐‐
Products and Services
Products and Services
Category Products/Services
E1 C1 Key People
Name
N Designation
D i ti
P1 D1
P2 D2
P3 D3
P4 D4
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 7

8. Public: Domestic Company – Company 1 (2/4)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Particulars 2011 2010 2009 2008
Total Income Profit (2011‐10)
Total Income
INR mn INR mn Profitability Ratios
Profit / Loss
1,000 D 300 Operating Margin
C Net Margin
A B 200 Profit Before Tax Margin
500
100 Return on Equity
Return on Capital Employed
0 0 Return on Working Capital
20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets
Financial Summary Return on Fixed Assets
Cost Ratios
• The company incurred a net profit of INR ‐‐ mn in FY 2011, as Operating costs (% of Sales)
compared to net profit of INR ‐‐ mn in FY 20‐‐ Administration costs (% of
• The company reported total Income of INR ‐‐ mn in FY 20‐‐, Sales)
registering an increase of p1% over FY 20‐‐
registering an increase of p1% over FY 20 Interest costs (% of Sales)
Interest costs (% of Sales)
Liquidity Ratios
• The company earned an operating margin of p2% in FY 20‐‐ a
Current Ratio
decrease of ‐‐ percentage points over FY 20‐‐
Cash Ratio
• The company reported debt to equity ratio of ‐‐ in FY 20‐‐, a Leverage Ratios
decrease of p3% over FY 20‐‐ Debt to Equity Ratio
Debt to Capital Ratio
b i l i
Financial Summary
Interest Coverage Ratio
Indicators Value (04/04/2012) Efficiency Ratios
Market Capitalization (INR) A Fixed Asset Turnover
Total Enterprise Value (INR) Asset Turnover
B Current Asset Turnover
EPS (INR) C Working Capital Turnover
PE Ratio (Absolute) D Capital Employed Turnover
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 8

9. Public: Domestic Company – Company 1 (3/4)
Key Business Segments Key Geographic Segments
Service 1 Country 1
100% 100%
80% 80%
60% 60%
100% 100%
40% 40%
20% 20%
0% 0%
20‐‐ 20‐‐
Business Highlights (1/2)
Description News
• 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
Operations
•H
Has a strength of ‐‐ f l
h f faculty members
b
• Has ‐‐ company operated training centers and ‐‐ franchisee centers
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 9

10. Public: Domestic Company – Company 1 (4/4)
Business Highlights (2/2)
Description News
• Has received equity investment of INR ‐‐ mn from c7 and c8
Has received equity investment of INR ‐‐ mn from c7 and c8
Investment
• 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
• Is looking at establishing a residential campus at c12 to students taking tutorial services
Expansion Plans • Is also aiming at developing a link with the Government to provide tutorial services to
state government school students
• Has introduced a c13 to provide educational content , questions with solutions, career
p ,q ,
New Product
N P d t
counselling services to aspirants of IITJEE, AIEEE and AIPMT
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 10

11. Private: Domestic Company – Company 1 (1/4)
Company Information
SAMPLE
Offices and Centres – India
Corporate Address Place 1, Country 1
Tel No. +123456
Fax No. +123456
Place
Website
b http://www.abc.com/
h // b /
Year of Incorporation 19‐‐
Products and Services
Products and Services
Head Office
Category Products/Services
E2 P1 Key People
Name
N Designation
D i ti
P5 D5
P6 D6
P7 D7
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 11

12. Private: Domestic Company – Company 1 (2/4)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Total Income Profit Particulars 2010 2009 2008 2007
Total Income (2010‐09)
INR mn INR mn Profitability Ratios
Profit / Loss Y
1,000 100 Operating Margin
80 Net Margin
800
Profit Before Tax Margin
X 60 Return on Equity
600
40 Return on Capital Employed
400 Return on Working Capital
20
Return on Assets
200 0 Return on Fixed Assets
0 ‐20 Cost Ratios
20‐‐ 20‐‐ 20‐‐ 20‐‐ Operating costs (% of Sales)
Administration costs (% of
Financial Summary Sales)
Interest costs (% of Sales)
Interest costs (% of Sales)
• Company incurred a net profit of INR ‐‐ mn in FY 20‐‐, as Liquidity Ratios
compared to net profit of INR ‐‐ mn in FY 20‐‐ Current Ratio
Cash Ratio
• It reported total Income of INR ‐‐ mn in FY 20‐‐, Leverage Ratios
registering an increase of r1% over FY 20‐‐ Debt to Equity Ratio
Debt to Capital Ratio
• Earned an operating margin of r2% per cent in FY 20‐‐ an
Interest Coverage Ratio
increase of ‐‐ percentage points over FY 20‐‐
Efficiency Ratios
• The company reported debt to equity ratio of ‐‐ in FY 20‐‐, Fixed Asset Turnover
a decrease of r3% over FY 20‐‐ Asset Turnover
Current Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 12

13. Private: Domestic Company – Company 1 (3/4)
Business Highlights (1/2)
Description News
• Has more than ‐‐ years of experience in preparing students for Boards as well as
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
Presence
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
z5 provides training and coaching services to students preparing for competitive exams in
z6
Divisions
• 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
• Has launched z10 which will combine z11 and z12, z13, z14, z15, z16, z17, z18 as well as
E‐learning
z19
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 13

14. Private: Domestic Company – Company 1 (4/4)
Business Highlights (2/2)
Description News
• Besides regular classroom and distance learning courses such as correspondence it also
Besides regular classroom and distance learning courses such as correspondence it also
Courses
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
• An amount of INR ‐‐ is slated to get waived off
Freeship Programs • 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
Source:
COACHING CLASS MARKET IN INDIA 2012.PPT 14

15. Thank you for the attention
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COACHING CLASSES MARKET IN INDIA 2012.PPT 15