Highlights
Drishti IAS Institute Achieves Remarkable Revenue Growth
The offline coaching provider, Drishti IAS Institute, has surpassed Rs 400 crore in revenue during the previous fiscal year that concluded in March 2024. The firm, led by Vikas Divyakirti, reported profits of Rs 90 crore within the same timeframe.
According to the consolidated financial statements submitted by its parent company, VDK Eduventures Private Limited, Drishti IAS’s revenue from operations climbed by 30.6% year-on-year, achieving Rs 405 crore in FY24, up from Rs 310 crore in FY23.
Growth Trajectory
This growth reflects a remarkable increase over the past four years:
- FY21: Rs 40 crore
- FY22: Rs 119 crore
- FY23: Rs 310 crore
Based in Delhi, this 26-year-old educational platform primarily offers offline coaching to assist students in preparing for the Civil Services Examination (CSE). Notably, income from coaching services constituted 94.8% of total operating revenue, totalling Rs 384 crore in FY24, representing a 37.6% increase from Rs 279 crore in FY23.
The remaining revenue originates from the sale of study materials, which include:
- Pen drives with coaching classes
- Books
- Test papers
- Other educational resources
Additionally, the firm earned Rs 15.3 crore mainly from interest on investments, leading the overall revenue to reach Rs 421 crore in FY24, up from Rs 314 crore in FY23.
Institute Locations
Drishti IAS operates seven institutes across various locations:
- Two in Delhi: Karol Bagh and Mukherjee Nagar
- Three in Uttar Pradesh: Noida, Prayagraj, and Lucknow
- One each in Jaipur and Indore
The Mukherjee Nagar Institute stands out as the largest contributor to Drishti IAS’s revenue, accounting for 58% of the total coaching income, followed by the institutes in Prayagraj, Jaipur, and Karol Bagh.
Expenditure Overview
On the expenditure front, the costs associated with employee benefits and faculty charges made up 40% of the overall costs. This expense grew by 41%, rising to Rs 117 crore in FY24 from Rs 83 crore in FY23. Spending on advertising saw a significant jump, increasing more than threefold to Rs 51 crore in FY24.
Furthermore, Drishti IAS remitted a total of Rs 15.17 crore to Vikas Divyakirti, which included:
- Rs 3.97 crore in rent
- Rs 5.2 crore in salary
- Rs 6 crore in faculty charges
In FY24, his wife, Taruna Verma, received a salary of Rs 2.4 crore.
The total expenditure, which includes rent, electricity, legal costs, procurement of study materials, travel, and other overheads, increased to Rs 289 crore in FY24 from Rs 197 crore in FY23. For a detailed cost breakdown, refer to various sources.
Profit Margins and Financial Health
The rise in employee benefits and advertising costs resulted in a modest 3.4% growth in net profits, which increased to Rs 90 crore in FY24 from Rs 87 crore in FY23. The company recorded a Return on Capital Employed (ROCE) of 55.7% and an EBITDA margin of 33.73%. The expense-to-revenue ratio was noted at Re 0.71. As of March 2024, Drishti IAS had total current assets valued at Rs 88 crore, including cash and bank balances of Rs 54 crore.
The reported Rs 90 crore Profit After Tax (PAT) highlights Drishti IAS’s exceptional position among privately held firms in India. The institute has established itself as a formidable brand, supported by a strong track record, positive word of mouth, and a valuable alumni network. Despite a modest top line, Drishti IAS has leveraged a singular exam to generate substantial revenue, commanding a valuation exceeding $600 million. Given its strong standing, the company is unlikely to go public or sell in the near future, marking it as an exceptional outlier in the education sector.