Market Research Report : Coaching Classes Market in India 2012

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Indian education sector is considered to be recession proof primarily due to the willingness among consumers to spend on this sector. Across the board, from the upper classes to the bottom most stratum of the social hierarchy, expenditure on education accounts for a sizable portion of family incomes. Coaching classes segment, though unorganized and unregulated, boasts of high profit margins. Due to the changing economic scenario, need for extra and supplemental education is urgently felt by both students and their parents. Known as the world of shadow of education, coaching classes have grown phenomenally in India and is only to proliferate further in future.
The report begins with an overview of the education sector in India with a clear segmentation of the Indian education system. This is followed by a representation of a macro-overview of the system divulging key data points including literacy rate in India, demographic split in education, budget allocation for education and Five year plan outlay for the same. As we proceed, education sector has been described briefly along with its market size and growth aided with inclusion of students enrolling for higher education and expenditure on education by Indians. This is followed by the overview on coaching classes market along with market size and growth as well as the market segmentation. An analysis of cost incurred and revenue garnered is provided with the help of a cost and revenue model proceeded by the business model of coaching classes. The section is concluded by a Porter’s Five Forces Analysis. The following section deals with the sub-segments in the coaching classes sector detailing each sub-segment’s description.
An analysis of the drivers explains the factors for growth of the market and includes expenditure on education, lucrative business opportunity, rise in number of students opting for foreign education, working parents with higher disposable income, Right to Education Act and infrastructural bottlenecks in formal education. As education in India is considered to be the only means towards betterment of one’s social status; spending on education has never taken a hit even in times of recession. Parents indulge in spending almost an equal amount of primary school fees in coaching classes to further their kids’ exposure and grooming. Owing to the absence of Government regulations, a successful coaching institute can hike program fees thus making it extremely lucrative from a business perspective. Increase in number of students opting for foreign education has also led to enhanced demand for these classes. With rising number of students looking at foreign shores for higher education, cracking entrance tests at such universities translate into rising demand for coaching institutes.

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Market Research Report : Coaching Classes Market in India 2012

  1. 1. Coaching Class Market ‐Coaching Class Market IndiaApril 2012
  2. 2. Executive Summary  Education sector is considered to be growing at a1% annually   Market  Coaching Class market, a sub‐segment of the informal education sector, is expected to grow at  a2% CAGR over 20‐‐‐20‐‐ Drivers Challenges – Expenditure on education – Rise in input costs – Lucrative business – Erratic power supply across the  Drivers &  – Rise in number of students opting for  foreign education foreign education country Challenges – Working parents with higher disposable  – Rise in local manufacturers income – Right to Education Act – Infrastructural bottlenecks in formal  education  Online tutorial increases base  Franchising mode of operation Trends   Coaching class for beginners  Introduction of package courses  Coaching institute make foray into formal   Increased PE activity education system education system Major PlayersCompetition Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 COACHING CLASS MARKET IN INDIA 2012.PPT 2
  3. 3. •Introduction•Market Overview•Segments •Drivers & Challenges•Trends•Competition•Strategic Recommendations•Appendix COACHING CLASS MARKET IN INDIA 2012.PPT 3
  4. 4. Though unregulated, coaching class market boasts of high  profits  Coaching Class Market – Overview   Market Size and Growth • Also referred to as “sweat schools”, coaching class  INR bn market is primarily a3 and a4 600 e% U T • Operates as a connecting link between academic  S 400 R standards in mainstream system and competitive  Q P standard of entrance examinations of different  200 p professional courses 0 • It accounts for majority of the informal education  20-- 20-- 20-- 20-- 20-- 20-- market in the country • The sector is considerably fragmented and regional in  Coaching Classes Segmentation nature S1 S2 • Indian parents are not a5 in matters related to  g% education which paves way for the coaching class  sector towards growth even though it comes at high  cost • This is a lucrative area for a6 players as this  constitutes the only segment within the education  spectrum that boasts of a7and a8 f%Source: COACHING CLASS MARKET IN INDIA 2012.PPT 4
  5. 5. Drivers & Challenges – Summary   Drivers Expenditure on education Lucrative business Lucrative business Challenges Rise in number of students opting for  foreign education Change in exam format Working parents with higher  gp g Coaching class degrading standards of  Coaching class degrading standards of disposable income students Right to Education Act Infrastructural bottlenecks in formal  Infrastructural bottlenecks in formal education COACHING CLASS MARKET IN INDIA 2012.PPT 5
  6. 6. Trends – Summary  Online tutorial increases base Coaching class for beginners Coaching institutes make foray into formal education system Key Trends ` Franchising mode of operation Introduction of package courses Increased PE activity COACHING CLASS MARKET IN INDIA 2012.PPT 6
  7. 7. Public: Domestic Company – Company 1 (1/4) Company Information SAMPLE  Offices and Centres – India  Clace 1, Country 1 Corporate Address Tel No. +123456 Place    Fax No. +123456 Website http://www.abc.in/ Year of Incorporation 19‐‐ Ticker Symbol ‐‐ Stock Exchange ‐‐ Products and Services Products and Services Category Products/Services E1 C1 Key People Name N Designation D i ti P1 D1 P2 D2 P3 D3 P4 D4Source: COACHING CLASS MARKET IN INDIA 2012.PPT 7
  8. 8. Public: Domestic Company – Company 1 (2/4) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Particulars  2011 2010 2009 2008 Total Income Profit (2011‐10) Total Income INR mn INR mn  Profitability Ratios Profit / Loss 1,000 D 300 Operating Margin C Net Margin A B 200 Profit Before Tax Margin 500 100 Return on Equity Return on Capital Employed 0 0 Return on Working Capital 20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets Financial Summary  Return on Fixed Assets Cost Ratios • The company incurred a net profit of INR  ‐‐ mn in FY 2011, as  Operating costs (% of Sales) compared to net profit of INR ‐‐ mn in FY 20‐‐ Administration costs (% of  • The company reported total Income of  INR ‐‐ mn in FY 20‐‐,  Sales) registering an increase of p1% over FY 20‐‐ registering an increase of p1% over FY 20 Interest costs (% of Sales) Interest costs (% of Sales) Liquidity Ratios • The company earned an operating margin of p2% in FY 20‐‐ a  Current Ratio decrease of ‐‐ percentage points over FY 20‐‐ Cash Ratio • The company reported debt to equity ratio of ‐‐ in FY 20‐‐, a  Leverage Ratios decrease of p3% over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio b i l iFinancial Summary  Interest Coverage Ratio Indicators Value (04/04/2012) Efficiency Ratios Market Capitalization (INR) A Fixed Asset Turnover Total Enterprise Value (INR) Asset Turnover B Current Asset Turnover EPS (INR) C Working Capital Turnover PE Ratio (Absolute) D Capital Employed TurnoverSource: COACHING CLASS MARKET IN INDIA 2012.PPT 8
  9. 9. Public: Domestic Company – Company 1 (3/4) Key Business Segments Key Geographic Segments Service 1  Country 1 100% 100% 80% 80% 60% 60% 100% 100% 40% 40% 20% 20% 0% 0% 20‐‐ 20‐‐ Business Highlights (1/2) Description  News • Formerly known as c1, it is an education concern and is now called c2 • Is an education concern with operations in 4 verticals namely c3.c4.c5 and c6 Operations   •H Has a strength of ‐‐ f l h f faculty members  b • Has ‐‐ company operated training centers and ‐‐ franchisee centersSource: COACHING CLASS MARKET IN INDIA 2012.PPT 9
  10. 10. Public: Domestic Company – Company 1 (4/4) Business Highlights (2/2) Description  News • Has received equity investment of INR ‐‐ mn from c7 and c8 Has received equity investment of INR ‐‐ mn from  c7 and c8 Investment  • Has mobilised INR ‐‐ mn through Initial Public Offering (IPO) route  • In areas of tutorial services, it caters to students both from high school and post high  school for competitive exams namely AIEEE, SLEEE, IITJEE and AIPMT Informal Education • It processes its services through s1 services, s2, s3, s4 • A new segment added to this portfolio is the s5 through c9 Centers which is are c10 over  s6 along with the s7 at c11      • Is looking at establishing a residential campus at c12 to students taking tutorial services  Expansion Plans • Is also aiming at developing a link with the Government to provide tutorial services to  state government school students  • Has introduced a c13 to provide educational content , questions with solutions, career  p ,q , New Product N P d t counselling services to aspirants of IITJEE, AIEEE and AIPMT Source: COACHING CLASS MARKET IN INDIA 2012.PPT 10
  11. 11. Private: Domestic Company – Company 1 (1/4) Company Information SAMPLE  Offices and Centres – India  Corporate Address Place 1, Country 1 Tel No. +123456 Fax No. +123456 Place   Website b http://www.abc.com/ h // b / Year of Incorporation 19‐‐ Products and Services Products and Services Head Office Category Products/Services E2 P1 Key People Name N Designation D i ti P5 D5 P6 D6 P7 D7Source: COACHING CLASS MARKET IN INDIA 2012.PPT 11
  12. 12. Private: Domestic Company – Company 1 (2/4) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Total Income Profit Particulars  2010 2009 2008 2007 Total Income (2010‐09) INR mn INR mn  Profitability Ratios Profit / Loss Y 1,000 100 Operating Margin 80 Net Margin 800 Profit Before Tax Margin X 60 Return on Equity 600 40 Return on Capital Employed 400 Return on Working Capital 20 Return on Assets 200 0 Return on Fixed Assets 0 ‐20 Cost Ratios 20‐‐ 20‐‐ 20‐‐ 20‐‐ Operating costs (% of Sales) Administration costs (% of  Financial Summary  Sales) Interest costs (% of Sales) Interest costs (% of Sales) • Company incurred a net profit of INR ‐‐ mn in FY 20‐‐, as  Liquidity Ratios compared to net profit of INR ‐‐ mn in FY 20‐‐ Current Ratio Cash Ratio • It reported total Income of  INR ‐‐ mn in FY 20‐‐,  Leverage Ratios registering an increase of r1%  over FY 20‐‐ Debt to Equity Ratio Debt to Capital Ratio • Earned an operating margin of r2% per cent in FY 20‐‐ an  Interest Coverage Ratio increase of ‐‐ percentage points over FY 20‐‐ Efficiency Ratios • The company reported debt to equity ratio of ‐‐ in FY 20‐‐,  Fixed Asset Turnover a decrease of r3% over FY 20‐‐ Asset Turnover Current Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed TurnoverSource: COACHING CLASS MARKET IN INDIA 2012.PPT 12
  13. 13. Private: Domestic Company – Company 1 (3/4) Business Highlights (1/2) Description  News • Has more than ‐‐ years of experience in preparing students for Boards as well as Has more than ‐‐ years of experience in preparing students for Boards as well as  competitive examinations • Boasts of a figure of ‐‐ students studying under the z1 brand every year for classroom and  Presence non‐classroom programs  • Has a network of ‐‐ study centers across the country along with over ‐‐ examination  centers  • Has three divisions namely z2, z3 and z4 • z5 provides training and coaching services to students preparing for competitive exams in z5 provides training and coaching services to students preparing for competitive exams in  z6 Divisions • z7 trains students preparing for competitive exams in the z8 • z9 looks at coaching students of class VIII, IX and X preparing for Olympiad, NTSE as well as  their Board exams • Has launched z10 which will combine z11 and z12, z13, z14, z15, z16, z17, z18 as well as  E‐learning z19Source: COACHING CLASS MARKET IN INDIA 2012.PPT 13
  14. 14. Private: Domestic Company – Company 1 (4/4) Business Highlights (2/2) Description  News • Besides regular classroom and distance learning courses such as correspondence it also Besides regular classroom and distance learning courses such as correspondence it also  Courses  offers courses for z20 • z21 aims at providing free coaching to deserving students wherein total tuition fee for  integrated ‐‐ years course 20‐‐ will be waived off • An amount of INR ‐‐ is slated to get waived off  Freeship Programs • This will only cater to students who have studied in Delhi Government Schools for at least  ‐‐ years • Further it will judged on the basis of Admission cum Scholarship Test conducted during Further, it will judged on the basis of Admission cum Scholarship Test conducted during  June every year Source: COACHING CLASS MARKET IN INDIA 2012.PPT 14
  15. 15. Thank you for the attentionThe Coaching Class Market in India report is part of Netscribes’ Education Industry Series. For more detailed information or customized research requirements please contact: Phone: +91 33 4064 6215 E Mail: E‐Mail: sales@netscribes.comAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used in the preparation of this report,Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This Research on India Netscribes (India) Pvt Ltd or “Netscribes” is not responsible for any loss or damage arising from use of this document Thisdocument is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. COACHING CLASSES MARKET IN INDIA 2012.PPT 15

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