Aakash Educational Services Ltd (AESL) has gone through a turbulent phase over the past couple of years due to leadership exits, restructuring efforts, and the broader fallout from the financial crisis at its former parent company, Byju's.
This turmoil led to a 16.7% decline in revenue, while losses before tax and exceptional items surged 4.8 times during the period.
Aakash's revenue from operations declined to Rs 2,032 crore in FY25 from Rs 2,438 crore in FY24, according to its consolidated financial statements sourced from the Registrar of Companies.
Aakash primarily operates through two revenue streams, coaching and franchisee operations. The coaching segment accounted for 96% of the total operating revenue, generated from classroom programmes offered at company-owned centres. Income from this segment declined by 16.7% to Rs 1,951 crore in FY25, compared to Rs 2,341 crore in FY24.
On the other hand, its franchisee model, which comprises fees and revenue sharing arrangements from partner run centres operating under the Aakash brand across different cities, also declined. Revenue from this segment fell 15.6% to Rs 81 crore in FY25 from Rs 96 crore in FY24.
The company also added Rs 53 crore of other income, which tallied its overall revenue to Rs 2085 crore in the last fiscal year.
As its scale declined during the year, Aakash managed to trim its overall expenses by 6.1% to Rs 2,378 crore in FY25 from Rs 2,532 crore in FY24.
The decline in costs was primarily led by lower employee benefit expenses, which fell 5.6% to Rs 1,331 crore. Its advertising and promotional spending also dropped by 3.7% to Rs 157 crore, while the cost of materials, primarily study materials saw a sharper decline of 25.6% to Rs 67 crore in FY25.
However, the 5.6% reduction in expenses was not enough to offset the 16.7% decline in revenue, which resulted in its losses before tax and exceptional items to surge 4.8X to Rs 293 crore in FY25.
Notably, the company's reported net loss figures were significantly impacted by deferred tax adjustments in FY25, when Aakash reported a net loss of Rs 221 crore. In contrast, the company's losses had ballooned to Rs 2,443 crore in FY24. This was due to a series of exceptional charges, including a Rs 1,079 crore provision following an NCLT order, Rs 100 crore related to the cancellation of a services agreement with its parent company, and Rs 1,363 crore towards interest payments on debentures after default and early repayment demand.
To avoid confusion caused by these one-off items, which are not directly related to the firm's core ops, we have considered losses before tax and exceptional items to present a clearer view of its operating performance.
By the end of FY25, Aakash spent Rs 1.17 to earn a rupee of operating revenue. During the year, its ROCE and EBITDA margins stood at -52.54% and 1.92%, respectively. It reported total current assets of Rs 341 crore at the end of FY25, including cash and bank balances of Rs 72 crore.
Since FY25, Aakash has seen a series of developments linked to its proposed rights issue. The Supreme Court recently backed the NCLAT order allowing the company to proceed with an extraordinary general meeting (EGM) for the rights issue. The company was reportedly on the way to fresh funding, with Ranjan Pai's family office committing to infuse Rs 250 crore into the coaching chain. It remains to be seen whether these developments will help stabilize the company and restore its growth momentum in the coming years.