Veranda Learning Solutions Ltd

Demerger approval details

• NCLT Chennai approved the Composite Scheme of Arrangement among Veranda Learning, Veranda XL, and J.K. Shah Commerce Education.
• Demerger transfers Veranda's Commerce vertical to JSCEL.
• JSCEL will list and house brands including J.K. Shah Classes, BB Virtuals, Navkar Digital Institute.
• Completion depends on regulatory filings and timelines; Record Date and listing schedule to be announced.
• The move aligns with Veranda 2.0 strategy for independent, focused education businesses.

Scheme sanction highlights

• Sanction: NCLT Chennai approves Composite Scheme for VLS, VXLS, and JSCEL.
• Order dated 20 August 2026; e-copy uploaded 21 August 2026; certified copy pending.
• Amalgamation of VXLS into VLS; VXLS to be dissolved.
• Demerger of Commerce Education from VLS into JSCEL; JSCEL to be listed.
• Share Entitlement Ratio: 1 Demerged share converts to 1 new JSCEL share.
• Equity shares of JSCEL to be listed on stock exchanges, subject to approvals.
• RD/IT observations received; undertakings to comply with applicable laws and tax provisions.
• First Appointed Date equals Effective Date; Second Appointed Date for Demerger as per scheme.
• Stock exchanges letters no-objection; SEBI observations addressed in explanatory statements.

Financial Performance

• Revenue from operations: INR 150 crores, up 42% YoY.
• PAT: INR 34 crores, up 472% YoY; sixth consecutive quarter PAT positive.
• EBITDA: INR 54 crores; up 10% YoY; EBITDA margin ~36%.
• Enrollments: ~1.03 lakh; up 35% YoY.
• Collections: up 27% YoY.

Segment Trends

• Commerce: Revenue INR 108.6 crores; +53% YoY; EBITDA INR 42.7 crores; +58%; margin ~40%.
• Government Test: Revenue INR 32.5 crores; +41% YoY; EBITDA ~INR 4 crores; breakeven prior quarter.
• Academic: Revenue INR 12.2 crores; +22% YoY; EBITDA INR 9.2 crores; +53% YoY.
• K-12: Six schools, 5,400 students; asset-light managed model; expansion planned.

Balance Sheet and Cash Flow

• Collections and cash flows healthy; balance sheet strengthening post deleveraging.
• Debt: Commerce INR 125 crores; Non-commerce INR 145 crores.

Guidance and Outlook

• FY27 guidance: Revenue INR 670 crores; EBITDA INR 260 crores; PAT INR 144 crores.
• Commerce revenue ~INR 450 crores; EBITDA ~INR 215 crores; PAT ~INR 110 crores.
• Non-commerce revenue ~INR 220 crores; EBITDA ~INR 46 crores; PAT ~INR 34 crores.
• Expansion focus: 15 new offline centers; Karnataka government test expansion; North/West presence.

Demerger and Growth Plan

• Demerger progress on track; NCLT hearing scheduled Aug 17; listing likely by Sep.
• Post demerger: 1:1 share to shareholders in JK Shah Commerce Education Limited.
• Commerce demerger target: revenue growth and value unlocking; potential higher multiples on list.

Q&A Highlights

• Q1: De-merger listing as near-term value unlock; 1:1 share in JK Shah Commerce upon completion.
• Q1: Government test EBITDA target of INR 100 crores over 4–5 years mentioned.
• Q1: 15 new offline colleges; Karnataka expansion; offline presence in North/West with focus states listed.
• Q1: Debt cost refinancing to ~9–9.5% from ~17.5%; progress cited.
• Q1: Advertising spend for commerce branding expensed in Q1; ramp-up expected in coming quarters.
• Q1: Tax reversal due to merger; Q1 current tax expense reversed by INR 7.35 crores.

Meeting Details

• Date: August 13, 2026; Time: not disclosed.
• Event: Earnings call recording for Q1 FY2027 (quarter ended June 30, 2026).
• Format: audio recording of the earnings call.

Participants

• Key participant: Company Secretary & Compliance Officer.

Purpose

• Purpose: audio recording of earnings call for Q1 FY2027 (quarter ended June 30, 2026).

Additional Notes

• Audio recording uploaded on the company website.

Issue Overview

• Type: Preferential issue of equity shares and convertible warrants.
• Total issue size: INR 145.30 crore; 75% of warrant proceeds pending receipt.
• Main objectives: growth initiatives including acquisitions, NCD repayment/other obligations, general corporate purposes.

Utilisation of Proceeds

• Equity proceeds fully utilized; warrants 25% utilized in current quarter; 75% to be received.
• No deviation observed from stated objects.
• Equity funds fully deployed; warrants proceeds currently unutilised.
• GCP utilization in the quarter: NIL.

Governance and Compliance

• Monitoring agency reports no deviation from objects.
• No material governance or regulatory actions reported that affect viability.
• Approvals status not explicitly detailed; MA relies on management undertakings.

General Corporate Purpose

• GCP utilization: NIL in the quarter.
• Board approval for GCP allocation: not detailed in MA.

Business overview

• Diversified education group with online, offline, and hybrid formats.
• Segments: Academics, Commerce Test Prep, Government Test Prep; asset-light, scalable model.
• Commerce demerger planned to unlock shareholder value.

Operational highlights

• Q1 FY27 revenue 149.5 cr; PAT 33.9 cr; YoY revenue +42%, PAT +472%.
• Enrolments up 35% YoY to 1.03 lakh; collections +27%.
• Launched Commerce Virtuals; offline expansion into Tier 2/3 towns.

Financial performance

• Revenue 149.5 cr; EBITDA 53.8 cr; PAT 33.9 cr in Q1 FY27.
• Gross profit 94.6 cr; gross margin 63%.
• Finance cost down to 8.1 cr; depreciation 7.2 cr; tax -3.5 cr; PAT 33.9 cr.

Capital structure & liquidity

• QIP raised ~₹357 cr in Jul-2025; deleveraging supported by debt optimization.
• Finance costs down ~67% YoY (₹26.2 cr in Q1 FY26 to ₹8.7 cr noted in narrative).
• Demerger process progressing; no immediate liquidity concerns indicated.

Strategic priorities & outlook

• Veranda 2.0: Commerce demerger to sharpen focus and capital allocation.
• SNVA-Veranda JV targets: FY27 revenue 250+ cr; EBITDA 50+ cr; learner base 2 lakh+/year.
• Total FY27 revenue target 670 cr (Commerce 450; Non- Commerce 220).
• FY27–FY30: 25% CAGR; FY30 revenue target >₹1,000 cr.
• Managed Schools: expand offline K12, pre-school, and government test prep footprint.

Risks & governance

• Demerger requires NCLT/stock-exchange approvals; regulatory risk noted.
• 1:1 share allotment to Veranda shareholders post-demerger; JK Shah Commerce listing planned.

Financial highlights

• Revenue from operations ₹149.5 crore, up 42% YoY.
• PAT ₹33.9 crore, up 472% YoY.
• Enrolments 1.03 lakh, up 35% YoY.
• Collections up 27% YoY.
• Gross profit ₹94.6 crore; margin 63%.
• EBITDA ₹53.8 crore, up 10% YoY.

Segment performance

• Commerce TP ₹108.6 crore; Government TP ₹32.5 crore; Academic ₹12.2 crore.
• Commerce TP EBITDA ₹42.6 crore; Government ₹4.0 crore; Academic ₹9.2 crore.

Strategic developments

• Commerce demerger continues to advance as planned; post-demerger, sharper focus and dedicated capital allocation.
• Expansion plans include new locations and online course launches across segments.
• Management emphasizes digital admissions and stronger university/partnership networks.

Financial results

• Un-audited consolidated and standalone results for quarter ended June 30, 2026 approved.
• Limited review reports from Suresh Surana & Associates LLP issued with unmodified opinion.

Auditors' review status

• Independent auditors' review reports on interim results submitted with unmodified opinion.

Major schemes approved

• Composite Scheme approved for merger of VKLS with the company.
• Demerger of Commerce segment into JKSC approved.
• NCLT order dated July 31, 2026; amalgamation effective from April 1, 2025.

Regulatory filings

• E-form INC-28 filed on August 11, 2026; scheme becomes effective on filing.

Amalgamation after-effects

• Transferor company to stand dissolved without winding up on scheme becoming effective.
• VALS CIC registration no longer required; RBI awaiting formal communication.

Regulatory disclosures pending

• Disclosures related to Core Investment Companies not included in June 30, 2026 results pending RBI clearance.

Other actions

• 12,000 stock options granted in quarter; total outstanding options 3,67,367.