CL Educate Limited (CLEDUCATE) Earnings Call Transcript & Summary

All right. Good afternoon, ladies and gentlemen, and welcome to CL Educate's Q4 FY '25 Analyst Call. My name is Arjun Wadhwa, and 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 been using for now almost 42-odd months for our analyst call. This call, as always, will be recorded, transcribed and made available in the investor zone on our website within the next 24 to 48 hours. Should you have any questions, I request you to just jot them down on the bottom right hand corner of the screen on the chat window and we'll take them up towards the end of the session. Joining me on today's conference call is Mr. Satya Narayanan, he's the Founder and Chairman of CL Educate; Mr. Gautam Puri, Co-Founder, Vice Chairman and Managing Director. Gautam takes direct reporting of the EdTech business, including the Test Prep business; and Mr. Nikhil Mahajan, our CEO and Executive Director, who anchors the MarTech business in addition to being the Executive Director for Finance. I'd like to start by inviting Satya to give a quick overview of our recently concluded DEX acquisition before handing over to Nikhil and Gautam for finance and business updates. Satya, over to you, please.

Thank you Arjun. Yes. I think we just gone one slide ahead. So good afternoon, everybody. I'm happy to share with you about the completion of the NSEIT acquisition that was underway over the past 3 quarters. And here are a couple of broad observations or updates that I would like to give to you. Effective 20th February, NSEIT has become an integral part of CL Educate Group. Congratulations to all of you. As you are aware, but those of you who might have missed it, the purchase price was INR 231.8 crores. And 2 very important things to mention in the same breadth is that we acquired this company by taking a debt of INR 200 crores, which is a 6-year debt. And effective 1st Jan 2025, we have begun the servicing of the debt at the details given here. And the repayment of loan and the interest, those processes have already begun. But the wonderful thing is that we could do the entire transaction without affecting too much of our internal financial challenges without getting into any of that. And one of the things that we are looking forward to is to put the plan in place become a zero debt company again in 36 months. Some necessary steps have been initiated already. This will be the first full quarter of NSEIT with us. For instance, the name change, et cetera, has been done. We have a 1-year runway to transition from an NSEIT to DEXIT completely. We have added imminent members on the Board, which I covered last time. We have already created a Board subcommittee under the Chairmanship of [ Mr. Yatri Kuin ] to help us look at both strategic investments as well as an IPO road map in a 24- to 36-month period. And the other accompanying important thing also, you will hear more about it from in the business discussion is that we had to take a couple of important calls, including the debt one. The other important call that we had to take as a business was to ensure that there is no apparent or there is no conflict of interest between the Test Prep practice and the assessments practice. And in order to do that, we have discontinued a couple of lines of our businesses over the past 3 to 4 months and the details of which you will hear when Nikhil and GP talk about it in the finance as well as in the Test Prep part. And the summary of it, if you look at it here, looks like this. Arjun, can we move forward? Yes. So, it is INR 200 crore business doing an EBITDA of about 16%, and there is a scope to make it better as we move along, DEXIT, as you're calling it, or NSEIT comes from a very, very strong business mode coming out of its technology backbone, the distribution network for assessment centers, and we are the only player in the country who can do on-demand assessments at scale, and that forms almost 2/3 of our business. The entire leadership team is continuing with us. It is energized and it is looking at achieving important landmarks over the next 2 to 3 years. And we are working towards making DEX being able to play in the entire large TAM of almost INR 9 crores individuals who undertake some assessment or the other in the country in India every year. So that's the large TAM that we're talking about. And if we execute some of these very well, including Synergy that it can build with CL, the corporate Synergy that it can build with Keystone, we believe that DEXIT can become a very important player in the nation's Digital Public Assessment Infrastructure. That's the summary of DEXIT. Back to you, Arjun.

Thanks, Satya. I'll now request Nikhil to step in.

Yes. Good afternoon, everybody, and thanks, Arjun for this. I just want to spend a couple of minutes before doing a deep dive into the numbers. As you know, as Satya articulated, this is the first quarter when there is a certain portion of DEX, which is getting consolidated with our existing 2 lines of business, which is the EdTech business and the MarTech business. So going forward, we'll have 3 lines of businesses, DEX, EdTech and MarTech. And as Satya articulated at the conclusion or in the preparation to the conclusion and consummation of the DEXIT acquisition, we had to take certain decisions in discontinuing certain product lines and product categories from our Test Prep business to avoid any potential seeming conflict of interest. In certain areas where Test Prep used to operate, specifically JEE and NEET, which is a 50 lakh plus students appearing across the country and the Bank-SSC selection recruitment exam, which annually roughly around 1 crore plus people write. These are 2 large market opportunities, which DEXIT had some footprint, used to do some businesses, but in order to ensure non-conflict, potential conflict of interest in the future, CL decided to take a onetime action of discontinuation of these product lines, which resulted in a loss of INR 9.3 crores during the current year because as we were approaching the consummation of the transaction, we already in a subtle manner, chose to stop enrollment for the new academic enrollment season. However, the expenses towards the delivery of the already enrolled students continued and will also continue for certain couple of quarters in the current year. So, this was a onetime hit of INR 9.3 crores, which is appearing as a onetime exceptional discontinued operations line item. In addition to this, there were significant amount of expenses which we incurred towards closing this transaction including costs associated with legal and other transaction-related costs. And the acquisition-related expenses of INR 4.2 crores as per IndAS cannot be amortized and they have been accounted for as an exceptional item appearing in the P&L for this quarter. In addition, we had to book an additional incremental interest for about 8 to 10 weeks still pending the closure of the transaction, transfer of shares and the payment of consideration. And this increased expense of INR 2.7 crores also added to the effect on the bottom line without any commensurate business income or business profitability accruing to us. But these are all onetime exceptional line items, which have been accounted for as per accounting standards. And we expect that going forward, it's going to be business as usual. And none of these line items will get replicated in the future. Arjun, can we move to the next slide. Now coming to the specific financials. As stated earlier, the DEX transaction got concluded on February 20. So as per IndAS, only about 40 days of revenue and profitability actually accrued to us which amounted to a revenue of about INR 30 crores. So, if you were to just include a stub period, our revenues have grown about 11% from INR 332 crores to INR 368 crores. But if you were to look at continuing pro forma basis, we would have probably seen INR 332 crores going to INR 544 crores accounting for the full year's revenue. Similarly, at the EBITDA level against the last year EBITDA of INR 37.9 crores, the pro forma EBITDA is about INR 63 crores, INR 64 crores while for the stub period for the 40 days, this is about 32.6% and has some of these regular items relating to debt also included besides the exceptional items, which are not accounted here. We have seen an extremely good positive revenue growth in the MarTech Platform Monetization and Publishing Business. However, we had seen Test Prep been negatively impacted not just due to the discontinued business, but also due to what I will call refiguring in the Test Prep market, more details of which will be covered by Gautam in the EdTech update. Earlier, we were anticipating the DEX transaction to get closed somewhere in November, December '24, and we were hoping to be able to get 3, 4 months of revenue, stub period revenue accounting to us, but that was not took much longer than anticipated, and we only got about 40 days. As I've already shared the discontinued operations for the product lines of Engineering, Medical, Bank-SSC and CA, which are large examination markets from a DEXIT market opportunity potential. Other items I have already covered in the previous slide, including acquisition-related expenses as well as interest cost, which was incurred because the loan disbursement happened earlier and the actual closure of the transaction took about 6 to 8 weeks longer than we had originally planned. Now getting into more specific details, let me first jump into the MarTech business. MarTech business last year grew by about 22% in terms of revenue from about INR 123 crores to about INR 150 crores, of which international revenue was about INR 43.5 crores in FY '25 as compared to INR 32 crores the year before, indicating roughly a 35% revenue growth. India revenue increased from about INR 90 crores to about INR 106 crores, indicating roughly a 16%, 17% growth rate. As I have been sharing over the previous investor calls, last 2 to 4 quarters, we have seen our margins slightly impacted largely by environmental factors where our customers have been asking for more stricter pricing as a result of which our margins have been negatively impacted and delivery costs have also slightly marginally increased across geographies. However, as we say we are also working towards reengineering our supply side to be able to optimize on the cost of delivery as well as be able to extract slightly better pricing from our customers to be able to minimize the impact of margins. The new client acquisition has been gaining extremely positive traction over the last 12 to 18 months. We have added 12 new customers in various verticals, and we expect that over the next 4 to 8 quarters, not only will the revenue contribution from these new accounts increase significantly, but the newer accounts itself will increase significantly. Another critical thing is which we are working is to significantly expand our international delivery capability by enhancing our team sizes across all 3 international geographies at Singapore, Indonesia and the U.S. And now I think we have adequate resource space to scale up to a level significantly greater than what has been achieved, and we expect that the existing growth momentum in those markets will continue. We can move forward. I'll hand it over to Gautam to cover the EdTech portion.

So just to get started with this, if you look at the last 1 year compared to the previous year when we had done about INR 200 crores of revenue, we are down to about INR 19.5 crores, a decline of about 7% and this has resulted in the EBITDA coming down from INR 22 crores to INR 15.5 crores. As I mentioned in the last investor call also, there is a period when DEXIT witnessing structural preparation and habits are changing. And in the last 3 years, what we have seen is there has been a greater shift towards self prep. And when I say self prep, it is an omnibus term which we use when students prepare for a large range of preparation process, okay. To put it very simply, anything which is outside the classroom, if I'm not attending a regular classroom program, whether offline or online, by and large, it is counted as self prep. So, it could be as simple as, let's say, just purchasing study materials or purchasing a book from GKP or it could be purchasing a book, doing some couple of online programs for different segments. And in addition to that, doing test series, also by and large. So that's the kind of range we have. And the last 2, 3 years, we have seen this to be a very much stronger thing. When students who are good in academics, it could be a good thing to go towards self prep, because they can think they can do it on their own, and students who are not good in academics, they are at the bottom of the ladder, I would say, many of them don't want to spend too much money and which is what is resulting in; if you look at the MBA part while we have been to hold on to the market share, the billing has come down because essentially students who are earlier taking a full-fledged the segment of students taking full-fledged programs are now shifting more towards either taking smaller products, which are low-value products comparatively or cheaper products comparatively or not taking anything. However, when not taking any, please take that with the pictures on a large number of serious students, who will definitely take a product; while there will be a significant population will not take anything, but a test series kind of product is something which is always taken, okay? And here also we find a difference in the behavior with respect to the products. While in an MBA, this trend is much more strongly pronounced when students are moving towards self-preparation and looking at saving money in terms of preparation. We don't see that in a similar strong way when it comes to the school products, which is Law, BBA, IPM. And the only reason can be that where the parents are involved, parents are paying, there you find them to be wanting to be sure and not wanting to take chance with the careers of their children. When it comes to CUET, I would say CUET has not lived up to the expectations. When CUET came, we felt fairly about it. We felt this could make a difference. But unfortunately, due to multiple reasons, it has not emerged as a serious product segment. And you would have seen that even in newspapers, every year we find glitches in terms of the way it is conducted and which means that the students and the parents are not confident of CUET as such and tend to hedge their bets. And in any case, for many places, not Delhi University, but for many colleges, private colleges especially, CUET is only one of the many ways of getting into the college and hence, students look at multiple options. Secondly, the way the paper has been structured, which means it is a board plus kind of a thing means very clearly the focus will be more on the boards part or the academics of school part and the plus part, which is aptitude which is an afterthought. So, there is some section of students serious in the NTA and the associated circles, about the structure of the program, while it will stay there, I don't see it becoming a major product segment, at least not for us for the coaching segment. Maybe in the tuition part, it might be, but not a major segment definitely for the coaching perspective. As far as Law is concerned, the billing numbers, again, we have been able to hold on to it, similar numbers. But the segment which seems to be growing is the BBA/IPM segment. This is a segment where we are talking about 3-year management programs at the undergraduate level, or 5-year management programs at the undergraduate level. And most of these 5-year programs are structured in a way, not all, but most of them are structured in a way that the student after CS can opt out and continue with it. This is a program which seems to be growing faster than the others. And to me, it is absolutely logical because while Law is a very, very niche area, management is a much more broader area and it is essentially building on BBA. At this point of time, the BBA/IPM, or I would say the IPM 5-year programs are not bigger than Law, but I think that this is a segment which will grow faster. The interesting thing is the older IIMs, Indore started, Kozhikode has joined, while ABCL has still not come on to the band wagon, but Shillong has started, Kozhikode has started a 4-year program. And this is a segment which will we feel will grow. And this is a segment in which we should be able to do much better than the others purely because of the management background that we have with respect to the exam. However, when I look at the overall scenario with respect to Test Prep out here, I would say this is a churn which is likely to continue for at least another one year, maybe 1.5 years. And we will have to go through this cycle and essentially look at ensuring that our numbers don't fall while the revenue is something that we will be obviously trying to grow, but my focus would be to ensure that the numbers grow more than anything else. And while I'll talk about the initiatives in a minute. When it comes to the Platform Monetization, we end up, we help institutes and colleges reach out to students. We act as a bridge between the students and the various Law, MBA, BBA, IPM, and engineering institutes. This has been a segment which is growing. We have been able to do a good job of it and the margin not only has the revenue gone up here, even the margins are fairly good out here. Publishing has an improvement in terms of margin. But in terms of numbers, in terms of revenue, we are by and large flat as far as Publishing is concerned. Now with respect to the Test Prep that we are certain steps that we have taken. In this scenario where the market is looking at cost of saying that maybe something that they need, we have launched something which is called "Attend from Anywhere". We have started this process. We did this experiment about 3 months ago, and it seems to be very, very promising, and we are looking at expanding it to others. Very briefly what is "Attempt from Anywhere". Typically, either online or offline program, Any student who goes to a physical Career Launcher launch center and goes for the program and attends classes at the center. Or goes online and attends the Career Launcher program completely online. Now this is a program where we are saying especially in the metros that many times students find it difficult to travel, many times students have the college exam, school, et cetera; but hence, for the 2-hour class, they don't want to travel for another 2 to 3 hours. So, what we are doing is we are beaming the LIVE class of the session and the student has the flexibility of either attending the sessions from the center or in case the students cannot attend classes at the center, he/she can attend the same session online because the LIVE class is being beamed.; which ensures that the does not lose out and also ensures that from a student's perspective, the school or college requirements are also taken care of. To take care of self prep issue, which is becoming a very important segment, we launched a self-prep platform, I think I talked about it last time, I would just like to highlight again. Self prep platform for MBA which is called Open CAT. Here by and large student can do all the self prep on his/her own and also there are opportunities for students to enroll for specific segments. For example, students will prepare here but they will also have a test series. They have the opportunity to enroll for test series. They think they are not good in one particular section, one particular domain, they can enroll only for that. So, we have those self prep programs. So, while the base is available to the student, if they want any value-added service, that is something that they will have to pay for and enroll for it. We are also looking at developing our own platform for Adaptive Testing because we think going forward, Adaptive Testing is likely to happen. NMAT in fact, used to do it. It was not a very strong product, but nevertheless, it is something which is likely to happen. And even if Adaptive Testing does not happen, it is still required, I would say, for us for the simple reason that Adaptive Testing will help the students prepare better, and serve the right level. So, if I'm in a particular area, I will be able to give the right level of questions so that incrementally they can keep going up. And similarly, a strong student who is good in a particular domain will get correspondingly high-level difficulty questions. So, while testing is not there, Adaptive Testing is not the Indian example by and large, except NMAT does it in a small way. This is still a very important component from my point of view as far as preparation is concerned. One other thing that we have been looking is what Satya also talked about that there are synergies between Test Prep and DEX, and we are working together to bring out a few programs that can be delivered on DEX platform, and that we are taking where the CL program will be available on DEX platform itself. So that's broadly what we are looking at. I think Arjun I covered everything and you can forward it to -- you can take it up from here.

Thank you so much, JP. I'll take you through the next segment, which is a little bit of an overview of the DEX business. As Satya mentioned, we picked up this business on 20th Feb. So, from a reflection on our financials, it is from a 40-day perspective. But obviously, we're looking at it from a long-term perspective. And we thought though we've done an investor call for each of you where we've covered DEX in detail, it's always useful for new investors and for people who are logging in for the first time to get a little bit of an understanding of this business. DEX has been in the assessment business now for the better part of 20-plus years and is currently the #2 player in this market space behind TCS ION. The organization has built a network of 237 company managed centers and has an elastic network across schools, colleges, which allows it to deliver exams, as Satya mentioned, across all 780 districts of India. This is delivered through a 1,000-plus members field force, which works on this platform, and this includes both full-time and part-time employees. From an operational standpoint, we have a truly world-class technology infrastructure to deliver these exams, including our own operating system, which includes 6 copyrights and 2 patents. We also have the experience of having delivered 1 lakh plus concurrent students taking an exam in a single session as well as having delivered 73 lakh students across a single examination when we did the railway police recruitment in 2019. As Satya mentioned earlier, the ability of DEX is to also deliver on-demand exams anytime, anywhere as well as doing event-based exams, which could be of the nature of an RRP or an SSC and so on and so forth. Just to give you a little bit of an overview into the nature of work done, 55 million plus examinations have been delivered over the last 20 years by DEX. And the exams listed on the top half of the page are predominantly those that are delivered through the company-managed locations, which are largely on-demand exams. In the DEX lingo, we call this our core business. And the exams on the bottom half of your screen are largely the event-based exams, which happen through a mix of the company locations and a huge number of the Elastic locations. The ones on the bottom half of the page could be delivered over one day, over one week, over one month, depending on the nature of the exam. In terms of vintage, you'll notice that IRDA is one of our oldest and largest clients. More than 20 million exams delivered for them over a 17-year period, whereas UIDI, NISM, IIBF, all 9 years plus. So, in terms of regulators and other market bodies that the DEX team has worked with, it's a fantastic set of customers who have been serviced over a long period of time. Moving ahead into the business updates for this year specifically. The business has been largely flat, moving from INR 199 crores to INR 205 crores from a revenue perspective and the operating EBITDA has been, has dipped marginally from INR 39 crores to about INR 34 crores, INR 35 crores. This is largely on account of the transition that happened over this time period where as per the mandate of the organization, it was to continue business as usual, not go after any major new accounts and to largely stick with managing the show as it was during the transition period. As Satya mentioned earlier, our acquisition also got delayed from an earlier envisage period of November to actually getting consummated in February. And obviously, that uncertainty percolated down into the business teams in terms of delivery and so on. In terms of the core business itself, the growth has been very solid. This business has grown about 16% over the previous year. This is pretty much our on-demand annuity business, which continues to grow year-on-year on an incremental basis from the existing set of clients that are exclusively managed by DEX. This business accounts for more than INR 100 crores of the top line. In terms of what didn't work out as well as we had hoped this year, the NTAs specific business had dipped a little bit after the NEET exam paper leak, which resulted in a postponement of a whole set of other exams that would have flowed through NTA. And NTA also introduced certain structural changes in terms of the way exams need to be managed and delivered going forward. which resulted in an increase in the operational delivery costs of actually running those exams and managing those centers, which delivered those exams. We had also hoped that over the course of the year, the Ayush and DRDO exams would come our way in FY '25, but both of those have got postponed to the next financial year. Happy to share that the Ayush order is now with us and the work is underway in terms of delivering and servicing that. DRDO, we hope will happen later on this year. In terms of client additions, we had shared again in our investor call through a case study about the addition of ICAI as a client. Happy to share that we had mentioned at that time that we were expecting about INR 75 crores business from this over the next 3 years. The first year has indeed delivered in excess of INR 25 crores and we hope to add to this over the years ahead. In terms of specific initiatives that CL as a group and the DEX team are focusing on to grow this business, some of the specific areas we will focus on, Gautam spoke about it in his slides also is to look for more synergies in the entities and introduce more projects that will be able to ensure that there's not a linear growth from DEX's addition to our portfolio that it's not 1 plus 1 equal to 2, but we'll be able to derive synergies both from a revenue growth perspective in terms of product lines and also from a cost perspective in terms of leveraging the 200-plus CL study centers that we have across India and 230-odd study centers that DEX has across the country. We also spoke about the breadth of segments that DEX currently caters to. Again, in our session, we had covered that there are 7 opportunities in the assessment space. And currently, DEX only caters to maybe 2, 2.5 of those. We are happy to share that already during the stub period and the month that has followed, we've been able to expand this into new areas, including adding university semester exams and private university entrance exams to the DEX revenue stream. A couple of wins that we've had in this space is the addition of IIM Bangalore as a marquee client for university semester exams and the GITAM Group of Institutes for private university entrances. Other initiatives that we will be focusing on over FY '26 includes significant captive capacity enhancement, looking to build capacity to be able to cater to larger exams like JEE, NEET when it goes online, Bank-SSC that Nikhil spoke about earlier, areas that we have discontinued from our Test Prep product lines, but exams that will require significant captive capacity at distinct locations as per the new NTA guidelines to be able to participate in the RFPs for these exams. So, we'll share more details about the OpEx costs and so on related with our capacity enhancements, but we're looking to add 25,000 seats of captive capacity over the next 18 to 24 months. That's it from us in terms of a brief overview of all our businesses and how they've shaped up over the course of this year. We'll now throw the floor open to your questions and take them up over the next 15 minutes or so.

There's a question from one of our usual candidates about DEX, one of our regular investors, Sameer has asked, how is Q1 FY '26 shaping up for DEX? And is the revenue distributed across the 4 quarters? Or is there some amount of seasonality involved? Yes, Sameer, as you rightly guess, there is some seasonality involved in the DEX business. That depends on 2 factors. For the exams which are of a core nature, which are on demand, it tends to be pretty uniform over the course of the year. But for exams which are event-based, which are conducted over a month or over a week, the revenue then tends to also be classified relevant to the quarter in which the exam is delivered. There is a portion, there are portions which are milestone-driven payments and the revenue accrues accordingly as well. But largely, that would then reflect in those relevant quarters and would not be even across the 4 quarters. If I were to take last year as an example, Q1 and Q4 tend to be a little bit lower and Q2 and Q3 tend to be a little bit higher for DEX in terms of the way revenue tends to be spaced out. Okay. There's a question from Hemant Shah, again, one of our regular investors asking about why the cost of the DEX acquisition has increased from the INR 230 crores that we had initially said to INR 230 crores plus INR 75 crores. And why is it reflecting higher than that on our balance sheet? Hemant, we had mentioned this in our last investor call also. And just to clarify, one of the reasons why the acquisition got delayed from November to February was on account of certain cash that had been left behind on the formerly NSCIT Limited balance sheet as a result of their sale of the digital business to Investcorp. Just to take 2 steps back for people who are joining in for the first time, NSC, the exchange has a subsidiary called NSC Investments Limited, and then that has a subsidiary called NSCIT Limited. NSCIT Limited used to run 2 lines of business, Digital and Digital Examinations. We have bought the company, which house the digital examination business. The digital business was sold by NSC Investments to a company called Investcorp. The cash from that sale was about INR 800 crores, of which INR 600-odd crores, they were able to upstream immediately and about INR 180-odd crores of that cash was left on the balance sheet, which could not be upstreamed because of insufficient reserves being present on the books of NSCIT Limited. To be able to upstream that at a later point in time, certain redeemable preference shares stood on the books of the company, which we have acquired for a deferred consideration, which is the cash amount that has been left on the balance sheet. So, it's a little complicated, and I'd be happy to explain it to you on a call separately. But just to cut a long story short, our acquisition cost is INR 230 crores. There is no additional cost that will go out from CL Educate on account of the transaction. The INR 180 crores of cash that they've left behind will go back to them as a deferred consideration for the RPS that they had left behind. Again, one of our regular investors, Aditya Deora is asking what is the plan to reduce the debt? Do you wish to pay it organically? Or are you looking at some fundraising options in the pipeline? Aditya, as Satya mentioned right at the start, we would ideally like to go back to being a zero debt company in a period of 3 years, and we will look to reduce the debt over this time period as fast as we can. We will look at a couple of specific ways to do that, including potentially a strategic stake sale from DEX and an IPO also in the future. Satya, anything -- and of course, over and above that, any internal accruals that we can use to retire the debt earlier, both from, generated from DEX or from the CL business, we will obviously leverage that as well. And any land assets that we have currently on our books, which we can potentially liquidate over the next 2 to 3 years will also be used strategically to reduce the debt over a period of time. Satya, anything you'd like to add to that?

Thank You Arjun, I think that's good enough.

There are questions about our guidance for the future for the first quarter and the full year. Again, for people who have been with us for a while, know that we don't give a specific guidance outlook for each business line and for the company as a whole. But as Gautam mentioned, specific to the Test Prep business, it is going through a little bit of churn, and it has been a bit of a challenging period for that. On the market side, Nikhil mentioned that the revenue has grown 22%, and we will continue to look to expand on that and try and improve margins significantly over the quarters ahead. And from the DEX business perspective, from next year onwards, the entire amount will come to us as Nikhil had showed you from a pro forma perspective. And obviously, we will look to leverage both our management expertise and look at new opportunities, which would help grow that business significantly over the months and quarters ahead. There's a specific question from Sameer on the additional INR 75 crores that is to be paid against achievement of specific business-related goals that we had mentioned at the time of the DEX acquisition. Sameer, a formal process to that effect will be carried out now that our financials are closed to evaluate that. But from a first glance perspective on the numbers, we can share with you that we're not envisaging any additional payout from CL for the DEX acquisition. But in terms of a formal process, we will go through doing that and completing that process over the next quarter, next quarter and half. Gautam, there's a question on the EdTech business and how we expect it to move over the coming quarters given the churn that you spoke about. Could you throw a little bit more light on that, GP?

I said that as far as MBA is concerned by and large, I would look at a greater focus on the Self Prep products, which quite a few of which we have launched in the last couple of years and test series and that to me is going to be the defining market from our point of view. Classroom, as I said, we have tried to do a value add by giving the flexibility of attending the session from home or from anywhere else for that matter and the classroom. Because we believe that in such a market, it will be also helpful to give flexibility or to add value to the product so that you can at least charge higher or at least the same amount, if not higher. As far as the other products are concerned, out of Law and BBA/IPM, BBA/IPM is the one which is likely to grow and 2 reasons for that, one the base is small is at this point of time. So as more and more become aware of it, rather than going for MBA after graduation, after 12 becomes a much better option because the competition is much lower at this stage. Secondly, with the -- today, there are about 7 or 8 IIMs which are offering this program, which is also adding to the traction of this particular product. In addition to this, we are looking at, I think I mentioned last time, we are looking at, or rather we have relaunched CSAT, this being the first year of the relaunch. We had stopped doing it, if I remember correctly around 2017, '18. 2015, the paper became from a compulsory paper to a qualifying paper, which meant you needed only 1/3 or 33% marks, which meant that the market completely vanished. And in the last few years, especially '21, 2021 onwards, the paper has become fairly difficult and market seems to be reviving the -- so that is another thing we are looking at. So going forward, I would say that by and large, as far as the graduate program which is MBA and the Civil Services are concerned, the focus is primarily on numbers and for also on these self-prep programmes. As far as the school programmes are concerned, we will continue with the same vigour because classroom programs are concerned because as I said there the parent is the decision maker and does not want to take chances. On the thing that we have been seeing in the last couple of years both for Law and IPM, that the market seems to be shifting more towards the longer program or 2-year program, which is probably what is required for the student also because the 1-year program because of the board exams in between does not give the student sufficient time to prepare. So that's by and large going to be the plan going forward, at least for the next 1, 1.5 years.

Thanks, GP. There is a question from Rahul Bhansali on how many new test centers we plan to open going forward? And what is the road map for the next couple of years?

See the number of the centres is the function of the product range that we have. For the last couple of years, we allocate test centers because of the CUET. Because CUET as a product which is a 15-lakh market had the potential to go to smaller towns and villages. With CUET not picking up as expected with the structural issue with CUET as such, that number has been scaled down significantly. In the last 1 year, I think we added about 20-odd new centers. And going forward, it's going to be similar until we are able to get the product, which is going to cater to Tier 3, Tier 4 cities also. So going forward, I'll say about 15, 20 new centers on an annual basis what we can safely assume with the current product range.

Thank you, GP. I don't see any more questions from our participants. So, I'll take this opportunity to thank everyone who logged in. Thank you so much for participating in this analyst call. We look forward to catching up with you when we do our next analyst call at the end of Q1. Thank you all once again, and have a good weekend ahead. Thank you.