Majority of Everonn Education revenue from high end colleges: P Kishore

P Kishore, Managing Director, Everonn Education believes the company will benefit out of the government’s renewed emphasis on education. Here is what he told ET Now this morning:

Tell us about the company, its vitals when we talk about the technology and education going to be growth driver going forward and if the demand is robust for a service such as this?

Education has been the lead sector, which has got an impact of it technology and we believe the way ahead will be technology will play a very crucial role in this field.

Also can you explain further how operational lease works in the segment?

Operational lease is actually most of it is done for us at Everonn by our suppliers. Suppliers give us this equipment on a lease and that’s how we do it.

Looking at your game plan going forward really, you are currently ranked third in ICT after NIIT and Educomp but what’s your game plan going forward and what’s the pipeline looking like in terms of orders?

We have just recently bagged a very large order from Uttar Pradesh. In fact it’s our largest order for about 1025 schools, order worth over Rs 96 crore. It is looking very good and I think the pipeline is also improving substantially with the government’s new focus on ICT in education.

So 96 crore rupees in terms of orders and contracts? What are the revenues or margins you are working with and also in terms of expansion, any new businesses you are foraying into?

The new focus is for us to what we have called the project Educating India. Our endeavour is to set up schools and colleges. Everonn would be a facilitator, aggregator and a manager.

One concern that analysts fraternity has is that a lot of your business actually comes from a low value and that’s what comprises of your revenue. Are you planning to go up the value chain in future?

Actually, it surprises me with that analysis. We have our entire thing on the high value because 65% of my revenues come from the colleges and these are all high-end colleges of India, the engineering colleges, the medical colleges and the arts and science colleges, so we probably drive a lot of value. In fact, we have courses, which we sell from Rs. 40,000 to Rs. 50,000 per course.

When you talk about getting majority of the chunk coming in from the high value and that’s the colleges side of it. What about the fundraising plans? Do you have any fund-raising plans on the envelope?

No, we do not have any. We have enough cash with us. We do not need any funds right now and also our balance sheet is quite good. We could even leverage out enough debt on it if we require.

One keeps hearing about a lot of government spending getting earmarked to education year in and year out but how do you feel as a company that you would really benefit from the government’s spending?

See, we are one of the largest partners with the government. Today Everonn works with almost 16 state governments in India and there is this new trust from the government, if you notice from the 11th five-year plan, we used to spend about less than 2.8% on education. In the 11th five-year plan, the target is to spend to 6%. If you noticed in our Prime Minister’s recent visit to US and I happened to be there, it was actually called Mr. Singh and Mr. Obama’s Education Summit, so there is a clear focus on the Government in India on education and skilling.