K12 Techno Services, the company behind the Orchids school brand, has shown excellent financial performance in the fiscal year ending March 2024. Reporting a revenue of ₹429.2 crore, the firm has achieved a year-on-year growth of about 20%. Notably, it has also turned EBITDA positive, marking a significant turnaround in its financial health.
PC: The Financial Express
The revenue has increased from ₹358.3 crore in FY23 to ₹429.2 crore in FY24, which shows that K12 Techno Services is implementing effective strategies for expanding its operations and improving its service offerings. The company has more than 90 Orchids School branches in India and uses six different verticals, such as Sparklebox, an e-commerce platform for educational activity kits, and Eduvate, which provides customized solutions for school operations and curriculum design.
Service sales formed the majority of the revenue, accounting for 58.72% of the total revenue, which is ₹252.02 crore. This segment grew modestly by 7.1%. However, the sale of products witnessed an impressive growth of 46.5% to ₹171.72 crore, which accounted for 40.01% of the total operating revenue. This diversification in revenue streams reflects the company’s capacity to adapt to market demands and expand its reach.
K12 Techno Services also reported total income, including non-operating income of ₹18.47 crore, amounting to ₹447.67 crore, up 17% from the previous fiscal year. This growth is a testimony to the robust model of operations of the company and its ability to generate income from all sources.
The expense side had employee benefit expenses as the highest cost constituent, which increased by 28.2% to ₹173.38 crore and comprised 37.92% of the total expenses. Increasing costs for materials also formed a constituent part of the total expenses and stood at 23% increase in this context with the amount being ₹89.2 crore. Depreciation expenses also witnessed an increasing pattern, rising by 64.4% to ₹58.69 crore, and that of advertising expenses dipped 20.5% to ₹58.86 crore with a marked change in spending on marketing.
With a 8.5% increase in total expenses to ₹457.2 crore, effective cost management has helped bring the loss size down to ₹9.5 crore from ₹38.75 crore of FY23, a reduction of 75%. The firm reported a positive EBITDA of ₹80.37 crore for the year with ROCE at 1.69% and an EBITDA margin of 17.95%. Such turnaround in the midst of the economic turmoil is noteworthy.
On a unit basis, K12 Techno Services expended ₹1.07 for earning one rupee of operating income and thus depicts an efficient manner of running its operations. The company’s assets too have improved in FY24 as it went to ₹402 crore, in contrast with ₹312 crore in FY23; besides this, cash and bank balances accounted for ₹174.65 crore by the end of the fiscal.
In conclusion, K12 Techno Services’ FY24 performance demonstrates a successful strategy in terms of expanding its operational footprint and managing costs well. Such significant revenue growth and moving into EBITDA positives are indicative of a sound foundation for future growth. The education sector continues to evolve, and K12 Techno Services is well positioned to take advantage of opportunities that are bound to arise, further adding to the impact on the Indian education landscape.
