Education institutes to see 12-14% revenue growth, improvement in disposable income of parents: CRISIL report

Schools and colleges in India are expected to see a revenue growth of 12-14%, driven by rising enrolments and fee adjustments, according to CRISIL Ratings. This growth persists despite high revenue levels post-pandemic, with double-digit increases anticipated in the coming years. The K-12 segment, especially secondary schools, benefits from a growing demand for quality education and improved affordability as disposable incomes rise. Director at CRISIL Ratings noted, Mr. Himank Sharma, “Education is a top priority, and parents are unlikely to default on fees, allowing for the absorption of a 5-10% fee hike."

He highlighted that many Tier-1 schools are adopting digital platforms, leading to increased costs passed onto parents. Based on 96 educational institutions rated by CRISIL, the analysis indicates a collective fee income of nearly US$ 2.38 billion (Rs. 20,000 crore) for 2024. Additionally, demand for Computer Science courses remains strong despite placement challenges in engineering colleges, with around 60-70% of students from Tier-2 colleges securing jobs. Associate Director at CRISIL Ratings, Mr. Nagarjun Alaparthi, emphasized that strong cash flow is driving an 18-20% increase in capital spending, and institutions are expected to invest around 14-16% of their resources in infrastructure and new courses this year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.