CL Educate Limited (CLEDUCATE) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to CL Educate Limited's H1 FY '25 Analyst Call. My name is Arjun Wadhwa. I'm the CFO of CL Educate, and I'll be your host today. Welcome once again to our Metaverse platform called VOSMOS, which we have now been using for the last 3 years for analyst calls. This call always will be recorded, transcribed and made available in the Investor zone on our website within the next 24 to 48 hours. [Operator Instructions] Joining me on this conference call today is Mr. Nikhil Mahajan. He's the Executive Director and Group CEO of our Enterprise business; and Mr. Satya Narayanan, our Founder and Chairman. I'd like to start by inviting Nikhil to take us through the BAU side of our business before Satya provides an update on the new initiatives that we are in the process of undertaking. Over to you, Nikhil.

Good afternoon, everybody. Please confirm if I'm clearly audible. Let me start with the H1 financial update for the first half of financial year '25. The brief synopsis of that is that we have grown our revenues in H1 to H1, in the current year over last year, we're about 5% from last year's INR 186 crores. We have grown to about INR 196 crores. Our revenues in EdTech segment have been slightly muted, but we have been doing well in the MarTech segment, where the revenue growth -- revenue has grown from INR 64 crores to INR 78 crores. Our operating EBITDA from business has grown from INR 15.6 crores last year to INR 19.3 crores this year, showing a 24% growth. The cash and borrowing position adjusted for buyback, we are more or less at similar levels. Last year, during the same period, we had initiated a share buyback, which started in August and ended in November. So I think adjusted for the buyback, there is a marginal dip in gross cash, but that is absolutely very marginal. Now to the specifics of the EdTech business. In our Test Prep business, some of you might have seen, there was a news item that this year, there are 329,000 CAT registrations, which is about 7%, 8% higher than last year. The MBA market has been expanding at a slower rate. Our volumes have also been increasing over the last couple of years. In H1 to H1 comparison, our volumes this year are up by about 19%. Our platform and publishing business, which constitutes the other half of the EdTech business, has grown by about 19% in the first half, and there has been a significant margin expansion in this line of business, predominantly because all the revenue increase has more or less flowed into an enhanced EBITDA from the business. And the trends for the coming quarters also seem to be positive. We are able -- we will be able to broadly manage and maintain the margin expansion, which was achieved in H1. A brief update on the MarTech business. Our top line has increased from last year's INR 67 crores to about INR 79 crores this year, which is roughly a 19% increase. The total EBITDA has increased by about 7%. So yes, the EBITDA growth is slightly trailing the revenue growth, which is predominantly on account of slight pressure on the gross margin because of enhanced competitive environment and with clients and customers squeezing in or asking for better pricing and our competitors offering better pricing. And hence, in order to remain competitive, we've also suitably modified our pricing in the short run. As we had seen last year, also international business performance in MarTech business had grown by about 45% in a full year last year. This year also, our international business has grown by about 32% in H1 with more or less each international market like Singapore, Indonesia, and the U.S. growing significantly over last year. Yes. Now I'll just do a brief deep dive into each aspect of the EdTech business. As I shared earlier, our MBA enrollments are showing extremely positive trend with our volumes up by about 19% in H1 as compared to the same period last year, which is growth rate or at a rate faster than which the market seems to be expanding. The test takers, as I shared, has increased by about 8% to 10% over last year. This bodes good for this -- at least, this line of business, and hopefully, this should translate into better enrollment numbers in the coming years. Another critical thing is that ever since the exam cycle has changed in our Law program, wherein earlier the exam used to happen in the month of May post the Class 12 board exams. Now the exam for the last 2 years has been happening in December. So there used to be a significant segment of students who used to start preparing after the board exam. However, because of a crashed preparatory window cycle, we are seeing a greater demand for a 2-year program, which is very similar to what is the established practice in JEE and medical segments. However, this is a very slow repivot which we are observing in the market and which is extremely positive because the 2-year programs are significantly, aggressively priced at a much higher level as compared to a 1-year or a crash program. So as greater and greater number of students pivot to 2-year program, we would see a greater billing and revenue in the loss segment. During H1, we have signed 16 new partners, including Sharjah and UAE. The pipeline for sign-ups in the remaining quarters of this year remains strong. It has its own cycle of conversion, and we are extremely positive about significant number of conversions and sign-ups of new partners happening in H2. One critical update in the Test Prep segment is that we have -- we are planning to reintroduce the CSAT program. CSAT program is a subpart of the civil services entrance examination, which basically is an aptitude test as a part of the civil services selection process for which there are about 1 million test takers annually. Ever since CSAT was introduced in 2010 by UPSC, we had made strong inroads, and in the 5 years between 2010 and 2015, we had scaled up this product to about 20,000 students and a revenue of about INR 25 crores. However, as a result of a policy change by the government, wherein in 2015, CSAT exam was made an optional qualified paper, and as a result, you only had to score the passing 33% marks to remain in the selection criteria for the main civil services people. The situation has remained more or less similar for the last 7, 8 years. However, the last couple of years, the degree of difficulty of paper has become -- has been upped a notch every year. So now as the paper -- the examination paper has become significantly difficult that it now requires serious preparation because the failure rate at the CSAT exam, even a qualifying level has now gone up significantly. So to reenter this market, we are starting with the launch of the purely online product offering, along with our study material and the testing platform for the next year's June Civil Services preliminary examination, and we'll take the next steps after the outcome of the next 6 months. But based on the reputation, which we have built of market acceptance in between the 2010 to 2015 window, we are extremely positive and bullish of this opportunity. Now coming to platform monetization. As I shared, this revenue is up 19%. We have added 30 new clients. Our average ticket size is also increasing, on an average, year after year. Last year, if you recall, in the last quarter of the year, we had launched our common application form through the Easy Apply Zone. And we have now been able to add significantly attractive brand names who have onboarded the platform like MICA, Symbiosis, IMI, Jindal, BITS Law, BITSoM, and we continue to add newer and newer clients. And we're extremely bullish about this platform becoming a cornerstone in our EdTech platform monetization over the next few years. We'll continue to add customers from the institutional side and continue to drive additional students on the retail side for it to make a minimum sense for both. As shared last year, we had -- this year, early in the part of the year, we had a lot of video asset monetization, which was a new asset, which we have started off. We have got the first initial 6 customers in the last quarter. It's a new product, new offering, but with a lot of technology evolution and the student crowd in the 16 to 25 age group hooked on to a lot of video content. We are extremely positive that over the next 3 to 5 years, this could be a significant revenue contributor with a very high contribution margin as that is the direction in which the world is moving towards. Coming to the publishing business. This also saw a 19% growth in revenue. Our total books volumes were increased by about 28% in H1 against 3 lakh books in H1 last year to 3.86 lakhs this year. We have seen a lot of positive movement in volume uptake in GATE books, government exams, especially RRB, with a lot of recruitment opportunities in the railway segment coming up. This segment has shown a lot of positive traction. And we had launched new titles in the CAT and CLAT segment in a new form with a lot of embedded video solutions. And those have started taking off. If you see on the right top-end corner, the book titled GP Ka Funda, which is basically a summary book of 500 tough CAT questions and video solutions of each and every on how to crack those questions in the fastest possible way in a shortcut manner. Physics Galaxy, which is one of our primary selling titles. A new edition is poised for launch in the first quarter of '25, that is in the quarter beginning January. And we are extremely positive of this picking up volumes in the peak sales season from Jan to June. So I think this line of business has been doing pretty well. Our sales are growing, collection rates are good. The sales returns have been down significantly, and we continue to remain extremely positive with continued addition of new titles in this space. Now coming to the MarTech update. Arjun, can we move to the next slide. As you can see, this business has grown by about 19% from INR 67 crores last year to about INR 79 crores this year. The growth in the international revenues is about 32% from INR 17 crores to INR 22 crores. The India business has grown from -- by about 13%, 14% from about INR 50 crores to INR 57 crores. The EBITDA growth -- EBITDA has also grown, but at a slightly slower rate than the revenue growth at about 7%. As I explained earlier, the pricing has been slightly under pressure on account of aggressive competitive pressure. But I think we are moderating our offering and adapting it suitably in order to preserve our gross margins. And while the gross margins may not correct themselves upwards immediately, but we are extremely positive that in the next 2 to 4 quarters, we'll be back at the margins, which we were at about 12 months ago. Arjun, we can move to the next slide. I think that -- with that, I come to an end to the business as usual update, and I'll hand it over to Satya to give you the corporate updates, including the status update of the DEX acquisition and a new initiative, which we have launched. So he will talk about both of them. Over to you, Satya.

Okay. Thank you, Nikhil. Thank you. Good afternoon, everybody. The first quick update is about DEX. We are at the fag end of the documentation, quite literally knocking off various things, which is taking a lot of time as it always happens with an asset of this size and such a long legacy. We are hopeful of finishing all of that in the next 4 weeks. And the asset will become part of CL Educate in 4 weeks' time. In the worst case, it will be from the 1st of January in our estimation. At the same time, while the legal and technical parts are being put to rest, I think very productive co-working conversations, go-to-market, client meetings, all of those have already begun. And in order to make room for that bandwidth, people, time, et cetera, even internally, we have done some rejig. For example, entire Test Prep, which was earlier used to be reporting to me. Now that reports to Gautam Puri. And I'm spending -- I intend to spend a considerable amount of time. I'll take the direct reporting of the business leadership of DEX as we move into the role of mentoring and growing that company. That's as far as DEX is concerned. Moving forward, while DEX will be a significant addition, and that will perhaps take a whole lot of our bandwidth for its accelerated growth to happen once it gets to the CL stable. At the same time, we have taken one additional new step. This Kestone Utsav is something that I would like all of us to look at as an extension of Kestone's competency into a very, very exciting adjacency. And the only thing that we have done right now is to look at it strategically, look at it from a long-term perspective over the last 6 months, and taken the Board approval to create the entity as a 100% subsidiary as this will have, I think, fairly exciting path, including different bunch of perhaps strategic investors, strategic partners, its own road map as we move along. So keeping that long-term perspective in mind, we have created a 100% subsidiary called Kestone Utsav. I'll just take us through some quick items. In summary, the strength of Kestone and its team is captured here. The scale is such that Kestone team executes 3 events a day across 9 geographies. And if you take the last 1 year, they have worked with over 150 large organizations, paid clients, I would like to look at it as large organizations such as Amazon, Google and all the names that you can think of from FMCG, BFSI, technology, et cetera. And the events have been attended by very high-quality customers, including 30,000 CXOs have been reached out to -- we've moved back to the previous slide, Arjun, can you kindly? Yes. Thank you. And then a whole lot of execution, decor, venue, travel. So I think the team has tremendous competency, experience and technology platforms to execute events, which got further strengthened by the digital platforms that we built during and post COVID. The idea is, can we go to the next adjacency, which is $130 billion opportunity as luxury weddings and social events and start small. Look at it as a very good 5- to 10-year long-term opportunity, in which there are 8 to 10 different sub-elements such as venue, planning, decor, travel, stay, all of that, is it possible for Kestone to bring all her competencies, but also get some domain experts, including the business head who will singularly focus on this, a few operation teams that will be moved from Kestone into this team and so on. I'll move to the next slide, Arjun. Yes. And we are looking to start at the luxury end of it, wherein the spends are upwards of INR 2 crores, INR 3 crores, almost going to INR 10 crores. Can we focus on HNIs, ultra HNIs and NRIs, create the platform, look at benchmarking yourself well with some Indian players who are listed here at the bottom of the slide, as you can see. And there is a global weddings and events markets company, very similar to Kestone. Their social events and corporate events, both put together, it's a $1 billion company on core. You could simply Google and find out more. As we move more into our preparation, see this will take 3 to 6 months for a lot of below-the-radar preparation. And we will only be attacking the market aggressively for the next marriage -- wedding season, which is starting September, October of next year. But we will -- let's move to the next slide, Arjun. But we are working on a 3- to 5-year perspective of this large market even at a 1% market share, the size is quite exciting and quite staggering. And in some ways, to me, it's a little bit of a sense of déjà vu because when we started off CL, even Test Prep or coaching was not an organized industry. We're the first guys to bring in concepts of ERP, technology, recruiting from IITs and IIMs, brand as a concept, franchising as a concept. I think in some ways, we need to do another play in a very different market, in a different era. But I think if we are able to get a few percentage points of market share, we can create a brand that is asset light, super good in personalization, and it brings exclusivity, luxury, selectiveness in its approach. We will do a little below-the-radar launch events in December and January in a couple of cities, Mumbai, Delhi and Bangalore. And we have taken already -- signed up the first paid customer for the first pilot wedding in Jaipur on Jan 7, 2025. As you know, weddings are culture, language, geography very specific. So South Indian wedding will look very different from a Marwari wedding, from a Maharashtrian wedding and so on. All of that we are -- we will build those competencies as we go along. Yes, Arjun, kindly move to the next slide. So again, before I sign off, this is something where we have taken an in-principle approval to incorporate the company. We are having some very meaningful conversations to get some very trusted brands or personalities to also come and join this venture, which is a 100% subsidiary. We have -- we will share those thoughts as they become executed agreements, events and so on, as we move along. I'll pause there and hand it back to you, Arjun. Just waiting for Arjun to take over. Kindly bear with us. Yes, Arjun, now you're visible. You could switch on the camera.

Yes. My apologies for the delay. Satya, while I have you, maybe I'll throw a few questions your way, which are on the Kestone Utsav, new venture before I go back to Nikhil on some of the BAU stuff.

Sure.

So there's a question from Pradeep Madhwani asking what is the marketing strategy for Kestone Utsav and how do we propose to reach out to clients?

Sorry, I didn't register the first name of Madhwani.

Pradeep.

Pradeep. Pradeep, we are working the full details of a detailed business plan and which is why one of the first things that we are doing, once this entity is set up, is the research work, et cetera, has been done over the last 6 months. We have a little bit of an idea about what is the best way to go about the first half a dozen weddings. And as you know, we are focusing on the premium to super premium category, which means it will be very laser beam, below the line, friends, families and 2 degrees of separations, database driven. There's some -- you can almost think of it as how would you go to market with a super premium product. However, today, I will kind of pause not get into the details of that. And once we get past the business plan approval, execution approvals, et cetera, with the Board, maybe in our next Board meeting, we will share some relevant parts to you. It may not be the entire strategy of how will we go about doing it. But we have a reasonable amount of excitement and clarity about what perhaps could be a good go-to-market approach for this. We will share some of these. I'll give you an example just to kind of let you know. Thought leadership is something that might be needed in this. We can't be the next commoditized guy who will go and fight based on pricing. So thought leadership, technology, end-to-end integrated approach are the first things we need to put in place as far as the product is concerned. And then I think some very focused events, exclusive events, et cetera, that we can do that we are planning. And the first soft launch is one example of that, an exclusive get together of select 150, 200 families in NCR, Bombay, Bangalore might be the place where we will first let the conversations start. But I'll pause there and wait for another date to go into details.

Sure. Thanks, Satya. Rahul has asked a follow-up question on the OpEx increase in the Kestone business because of the new venture. I think we shall also hold answering this until we do a formal session post the launch of the event. But yes, just quickly, Rahul, the -- this is obviously a very high-margin opportunity business and any OpEx increases, we'll obviously keep that in mind. As I said, we'll address these at a later point in time. Swati has asked if you can share sort of a market outlook for Utsav? And what kind of partnerships would you be looking for in this particular segment?

What was the -- market outlook. As it got mentioned, it's the luxury weddings or weddings and social events is a $130 billion market, growing about -- the entire segment is growing at about 13% or so, but the luxury part of it is growing at 20%, okay? And for the partnerships, we are looking at 2 specific kinds of partnerships. Some might be to do with certain brands, which are established, who might want to come in because this brings them very important organized, corporatized service provider. And this partnership could be a B2B partnership or it could even be an equity at some point in time, okay? The other could be some very respected names, people, who will have strong association with this sector, which is weddings and social events. So these are the 2 kinds of partners, which we are looking at. And needless to say, the execution part of it, a whole lot of it comes because of Kestone's experience of running events at the rate of 3 per day, and these are also very exclusive events, a lot of events that Kestone does are very exclusive, very premium. They're not run of the mill. So some operating team, which is handpicked from Kestone will be moved to Kestone Utsav over the next 30 to 60 days as the team begins to take shape and we start working on various assets, digital assets, apps, websites, go-to-market collaterals and so on.

Thank you, Satya. I'll move on to questions on DEX. First, let me take up the business ones and then I'll go to more questions on legal and closure related. So on the business side, Deep is asking about the revenue in DEX being flat for the last 3 years. So he wants to know how it's moving so far this year? And what is the competition like in that space? And what would we need to do to be competitive in that space?

Yes. Thanks, Deep. I think DEX will be much more sharply in focus from an execution in next 2 to 4 quarters revenue impact and profitability impact point of view. I'm happy to share with you that the first half is going as robust as it has been shared with us. Since even now the integration has not happened, we have refrained from sharing those numbers here. And the building blocks for accelerating the growth has begun to be laid by the teams in terms of reaching out to additional clients, newer clients, capacity creation for '25 and so on. So both from -- though your observation is accurate about it being flat for 3 years, and like we have shared in the past call as well, some part of it, the teams were attributing it to being in a little bit of a place of indecisiveness. Hence, they were slightly -- I would say, they were not encouraged to go aggressively, especially where it becomes a long-term commitment. So they were in a little bit of a, I would say, tepid mode according to the team, according to the conversations that we've had, which has been taken out now. So people are feeling that they can go. And I personally also have been to a bunch of conversations with past clients, potential clients. In fact, we are there in a very leading university and even at the next weekend. I think there's a lot of action that is happening. It makes me feel quite confident that a very healthy EBITDA business with the strengths of technology, good business mode that -- et cetera, that we've already shared with you in the past call, it actually is coming our way eventually, finally. And it is making for a very exciting next 4 to 8 quarters in my own mind.

Thanks, Satya. If I may just add, Deep. Satya and I took a session about a month or so back, which is -- the recording of which is available on our Investor zone. So you might want to check that out. We spent an hour walking investors through all that is DEX. So that might be a great place for you to start in terms of understanding that business and what it entails for us going forward. Satya, I'll just take up a few questions related to the transaction itself. Neha is asking when do we start consolidating NSEIT DEX numbers? And if we have already started doing so? No Neha, we haven't. That process will only start post the conclusion of the transaction. So as Satya mentioned, we are hoping to conclude it in the next 4 to 6 weeks. Obviously, the sooner the better. And we will start consolidating for that stub period, which would be anywhere between 3 to 4 months from the date of closure of the transaction for this financial year. And then obviously, from the next financial year onwards, we will have the entire portion. There are also a few other follow-up questions on DEX in terms of what are the time lines? And are we on track? Yes, we're on track. We were hoping to consummate it in this calendar year. And so far, we are on track for doing the same. And there are questions on -- more related to the business and EBITDA and so on. I would just go back to my earlier suggestion that maybe we can go for the individual who's asked this. Maybe it will be a good place for you to start to view that investor session that we spoke about. And if you still have questions, we'd be happy to address them over e-mail. Let me move on to the EdTech segment now and the MarTech segment. Nikhil, I'll throw a few questions your way. There is first question from someone over e-mail. How many locations apart from the CoCo centers are currently offering student mobility services? And please elaborate how you plan to expand this vertical?

Arjun, I think the exact number of locations you only will have to chip in. As far as I recall, I think the number of locations, other than the CoCo locations, I think we have 4 or 5 locations outside the CoCo setup, which is currently offering [ IE ] and study abroad. As of now, our bulk of market outreach and growth strategy is driven predominantly by digital activation and centralized delivery from our team in Delhi. And for the next 4 to 6 quarters, I think we will continue to push the centralized delivery because it warrants and needs very specialized information, skill set. And while it might be easy to provide it in select locations like Mumbai, Kolkata or Bangalore, for a large number of locations, it may not be possible to be able to deliver it locally. And hence, we'll continue to focus it in a centralized delivery manner.

Sure. And Nikhil, I'd just like to add that online remains a key mode for this going forward, especially looking at the admissions consultancy program from a premium consultancy perspective and also from a study abroad perspective. Moving forward, there's also questions about the CUET programs. What are our plans for CUET and the network expansion plans for the same?

CUET, as we had shared in the -- even in the last investor call, hasn't panned out as we had anticipated and planned out 2 years ago in terms of the market size and opportunity. Yes, there are about 1.5 million students who wrote the last CUET exam across 16 products on the GT and the English segment. However, keeping in mind that the degree of the paper or the exam is pretty easy. Most of the students haven't felt, except for certain specialized courses, the need or the necessity to undergo external or specialized add-on coaching or a training facility. So it has more or less now morphed out where the admissions are highly competitive like Delhi University or a couple of other central universities where getting a much higher score or 100% [ title ] is your gateway into getting premium top end colleges. We expect that probably it will morph and drive itself more into a smaller band of opportunity, but which is pretty competitive. So yes, it may not pan out and the volumes will grow into a few tens of thousands. But the product has been reshuffled and reoriented to make it more competitive, more personalized and appropriately priced to be able to drive students for higher outcomes.

Thanks, Nikhil. Satya, I'll just come back to you for a minute. There are some more follow-up questions on Utsav. People are asking about our targeting a 1% market share. If we could please explain what that means. Are we talking about the $130 billion opportunity? Or is there something else specific we're looking at from a market share perspective?

Yes, it is -- since the specific question has been asked, we're talking about the 1% of 100,000 is what we are talking about here when we say 1%. So it's a very large number, very exciting number. And globally, there are $1 billion revenue companies, not market cap companies. So we need to look at it as a decadal opportunity. And if you fail a little bit achieving that, we shouldn't be ashamed off. But I wouldn't even be shocked if it's executed well, it kind of beats those numbers. So since I didn't want to put INR 1,000 crores as we don't -- we refrain from talking too much about the future, I left for you to do the calculations mentally yourself. Yes, but you're right, we're talking about 1% of 100,000.

Sounds fantastic, Satya. Another question on Utsav while I have you. Karan is asking how the logistics and supply chain for that organization would be managed? Again, another ops question, but...

Yes, that's a very detailed, very exhaustive ops question, Karan. Maybe 60%, 70% of those have actually even been sorted, executed and it has become an everyday rhythm at Kestone. But we are overestimating the problem. We're overestimating the challenges of relearning and 20%, 30% will be absolutely brand new, which is different from a corporate event. So we will figure that out and relevant parts of it, we'll be happy to share. Perhaps it might just suffice for me to say that we are looking at it as something that must be scalable. It did not look 10, 12 years ago that Kestone can scale beyond INR 3 crores or INR 5 crores. Today, it's trying to get to INR 150 crores. It's doing 3 events a day. I think in a decade, if it does certain number of a few hundred marriages and a bunch of other social events, large alumni events, there are a whole lot of events that are happening, which are the -- which is considered the fastest-growing segment within the events, the social events at 20%, 22%.

Thanks, Satya. I'll just take a couple of follow-up questions on DEX myself. We had mentioned in our slide that funding partners were secured. Would this all be borrowings? Or are we planning to raise equity as well? From an immediate perspective, we are going to use a mix of debt and internal accruals to fund the first INR 230 crores of the acquisition. In terms of specifics, one of the reasons we can't raise equity at this point in time is because we had completed our buyback last year in -- around end of November itself. So as per SEBI regulations, there's a 1-year cooling-off period. So -- which is why equity was not an option in terms of funding this transaction, but we will be using a mix of debt and internal accruals. We will share more details in terms of specifics of the same as we come towards the end of concluding the transaction. More follow-up questions on DEX include the numbers we had shared in our investor session that we had done last month, were they for the stub period or were they pro forma? Those were pro forma numbers. Obviously, from next year onwards, we will be able to take the entire revenue and EBITDA of DEX as part of CL consolidated. For this year, it will -- it only pertains to the 4 months that are left over. But what the numbers that we had shared in that session was to give you an idea in terms of what the consolidated entity would look like at a pro forma level. Nikhil, I'll move back to you now. There are a few questions on the MarTech business as well. The MarTech business has done exceedingly well to improve its top line, but the EBITDA and the margins have not moved in line with the same. Could you give some sort of an outlook in terms of what is -- what are the constraints that we are facing on that front?

I think I already shared that because of the slightly overall economic environment and the competitive intensity has increased a bit, which has put pricing pressure in order to win large events. And as a result of which, if instead of [ 100 ], you are able to price it at [ 95, 97 ]. That is having a cascading effect on my gross margins, which are running -- which have been impacted by about 100, 150 basis points in the first 6 months. We are working towards mitigating that thing to an extent what is possible by trying to -- obviously, you will have to adjust pricing in order to remain competitively priced. We are working towards managing our costs, sourcing our goods and services at a more optimal price point so that we're able to reduce our cost of delivery. And also, trying to pivot to businesses or revenue mix, which are able to contribute greater gross margin so that we are closer to the benchmark gross margin, which we started the year at the beginning of the year, including higher contribution from the technology and the VOSMOS business. So we'll have to wait and see until the end of March, how much additional business we could pull out from VOSMOS or the other higher-margin contributing businesses like digital and content to compensate for the margin loss or contraction in the experiential marketing segment.

Thanks, Nikhil. Also, a follow-up question on the Test Prep business that over the last couple of quarters, it has been -- the growth has been a little muted or a little flattish. What is the perspective -- what are the challenges we are facing on that front? And what is -- what kind of perspective can investors expect going forward?

See, I'll give 2 answers to that. One, our endeavor, as was outlined in our last investor call as well, is that we are endeavoring to gain market share and push up volumes. And that strategy has worked this year in the MBA segment where the market has expanded and our volumes have also expanded by 19%. Now obviously the expansion of volumes has come because of reorientation of a product mix, offering a greater number of lower-priced products and also reducing price in order to be able to garner higher volume -- higher market share and volume mix. So while in the short run, pricing -- we will contract pricing or reduce pricing in order to be able to gain a higher volume and a higher market share. I think to be able to pivot from when the pricing contraction is reduced and the pricing expansion introduced is a very subtle change. And when -- as soon as we are confident in terms of that the volume growth we are accreting is sustainable and retainable, I think we will repivot to a higher pricing point strategy. And I think we will quickly revert back to a faster revenue growth situation in the Test Prep side. It may take 2 to 4 quarters, but I think that is the direction. It may not start reflecting immediately in the next 2 quarters, but our core aim for the next 2 to 4 quarters is to enhance market share and gain volumes. On other 2 parts of the EdTech business, that is the platform, which contributes to nonstudent revenue and the publishing, they are growing at around 20%. We expect those growth rates to sustain with a margin enhancement in that. I think we are extremely positive that over the next 4 quarters, with the turnaround in the Test Prep space in terms of an enhanced margin expansion and also the flattening of the pricing reduction, I think the EdTech business should come back to a growth path with a enhanced profitability over the next 2 to 6 quarters. On network expansion, we have added, as I shared, 16 partners, and we have a reasonably solid pipeline for the next 2 quarters. So I think as the partner accretion continues, those will also start contributing to volume enhancement and volume growth, adding to the business outcomes.

Thanks, Nikhil. I'll just end with one last question that has come up from 2, 3 individuals today. Rohit and Rahul have both asked about a higher tax rate in this quarter as compared -- and especially in comparison with last year. Just like to update you guys -- just like to update everyone that if I do a comparative of last year versus this year, last year, to a large extent, we were operating on MAT on account of carryforward losses and unabsorbed depreciation. So that benefit is no longer available to us. So because of that, number one, we are now at a full tax rate of 27.82% across the entities in India. And number two, we had a deferred tax asset on our books, which we can no longer carry forward. So that write-off has also accounted for an additional tax expense that has come our way this quarter, which is why the tax specifically this quarter is a little bit higher. Over the course of the rest of the year, that would, to some extent, average itself out. So the effective tax rate would come a little bit lower once that happens. Hope that addresses all your queries. If you still have any questions, we'd be happy to take them up. You can drop us an e-mail at the addresses provided at the end of our presentation, also available on our website. So you can write to me or my team and we'll be happy to come back to you on any questions that you might have. We look forward to seeing you in the new year and wish you guys a very happy end to 2024, and we look forward to meeting you around end of Jan, early Feb. Thank you so much, everyone. Have a good day.

Thank you, Arjun.

Thank you, everybody.