Surging Enrolments Propel Educational Institutions to Double-Digit Income Growth

Educational institutions are set to experience 11-13% income growth due to increased enrolments and fee hikes. Operating margins are estimated to remain steady despite rising costs. Capital expenditure will enhance capabilities, with strong cash flows supporting stable credit profiles amidst urbanisation and a growing demand for medical and engineering courses.

Educational institutions are projected to see a robust 11-13% growth in total income in the current and next fiscal year, attributed to increased enrolments and strategic fee hikes. This growth is largely driven by a steady demand and improved realisations, according to a report released on Monday.

Crisil Ratings has indicated that operating margins are expected to hold steady at 27-28%, despite institutions facing increased staff salaries and other expenses. The report highlights that higher enrolments will necessitate capital expenditure to expand capacity and enhance infrastructure, contributing to stable credit profiles due to strong cash flows limiting reliance on external debt.

The report further underscores consistent growth in the K-12 segment at 9-10%, bolstered by rising urbanisation and annual fee revisions. Meanwhile, despite challenges, engineering and medical courses maintain healthy demand. The government's focus on expanding medical education infrastructure is anticipated to boost enrolments in this area, the report concludes.

(With inputs from agencies.)