Schools and colleges in the country are expected to witness a 12-14% revenue growth given an increase in enrollments and fee revisions. This trend is despite high revenue recorded in the sector post-pandemic period. In the following years no major slowdown is anticipated, revealed an analysis by CRISIL Ratings– an analytics and insights services company which stated that the growth will remain in double digits.
The analysts believe that enrolments for the educational institutes in the K-12 segment, particularly secondary schools, will continue to rise due to two reasons, the rising demand for high-quality education and improved affordability as income levels rise. “Today the disposable income across the different segments have seen improvement. Education comes as a top priority, a parent will not want to default on the fee. Looking at the trends in disposable income, it helps to absorb the 5-10% fee hike in schools and colleges,” Director, CRISIL Ratings, Himank Sharma told ET.
He added that in Tier-1 cities, most of the schools are getting onto digital platforms which need investment in infrastructure leading to increased costs being passed onto the parents. The analysis is based on 96 educational institutes rated by CRISIL Ratings, that accounted for almost Rs 20,000 crore fee income for 2024.
Sharma briefly also spoke about the growing demand in Computer Science courses in engineering colleges despite low placements in colleges across India. “If we look into relative terms, the placements have taken a beating, however having said we are not seeing a complete blackout or fluctuations in demand. At least 60 to 70% students from Tier-2 engineering colleges are getting placement and absorbed into related fields if not IT and ITeS.”
The analysis also pointed out that better hiring signals for 2025 will further increase enrollment in the above courses including medical and architecture colleges in the private education sector.
The director also said as current courses and seats are in high demand, educational institutions will keep investing in infrastructure and improving their capacity. “Increased demand will provide strong cash flow for institutions and reduce the debt taken by them. Most of the private education sector today also does not have too much external borrowings and is self-funded.”
Associate Director at CRISIL Ratings, Nagarjun Alaparthi explained that strong cash flow in educational institutions has led to an 18-20% increase in capital spending, reaching a record high in fiscal 2024. This year, schools and colleges are expected to continue expanding by investing around 14-16% of their current resources in land and infrastructure while adding new courses.
The analysts believe that enrolments for the educational institutes in the K-12 segment, particularly secondary schools, will continue to rise due to two reasons, the rising demand for high-quality education and improved affordability as income levels rise. “Today the disposable income across the different segments have seen improvement. Education comes as a top priority, a parent will not want to default on the fee. Looking at the trends in disposable income, it helps to absorb the 5-10% fee hike in schools and colleges,” Director, CRISIL Ratings, Himank Sharma told ET.
He added that in Tier-1 cities, most of the schools are getting onto digital platforms which need investment in infrastructure leading to increased costs being passed onto the parents. The analysis is based on 96 educational institutes rated by CRISIL Ratings, that accounted for almost Rs 20,000 crore fee income for 2024.
Sharma briefly also spoke about the growing demand in Computer Science courses in engineering colleges despite low placements in colleges across India. “If we look into relative terms, the placements have taken a beating, however having said we are not seeing a complete blackout or fluctuations in demand. At least 60 to 70% students from Tier-2 engineering colleges are getting placement and absorbed into related fields if not IT and ITeS.”
The analysis also pointed out that better hiring signals for 2025 will further increase enrollment in the above courses including medical and architecture colleges in the private education sector.
The director also said as current courses and seats are in high demand, educational institutions will keep investing in infrastructure and improving their capacity. “Increased demand will provide strong cash flow for institutions and reduce the debt taken by them. Most of the private education sector today also does not have too much external borrowings and is self-funded.”
Associate Director at CRISIL Ratings, Nagarjun Alaparthi explained that strong cash flow in educational institutions has led to an 18-20% increase in capital spending, reaching a record high in fiscal 2024. This year, schools and colleges are expected to continue expanding by investing around 14-16% of their current resources in land and infrastructure while adding new courses.
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