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India’s education industry has emerged as a dynamic and lucrative avenue for investors seeking long-term growth. As the country’s economy continues to surge and the government invests heavily in education reforms, opportunities in education stocks in India are aplenty.
The country’s education sector is estimated to be worth $117 bn in the fiscal year ended March 2020. India has over 250 million children enrolled in schools students, the highest in the world. Along with that, the country has 38.5 million students enrolled in institutes of higher education.
Looking forward, India’s education sector is expected to reach a market size of $225 bn by 2025. In addition, it is projected that the Indian market for online education will increase by $2.28 bn between 2021 and 2025, with a CAGR of about 20%.
“India has the largest population in the world in the age bracket of 5-24 years with 580 million people, presenting a huge opportunity in the education sector….With cutting-edge technologies such as AI, ML, IoT and blockchain, India’s education sector will redefine itself in the years to come,” said the India Brand Equity Foundation, a trust established by the country’s Department of Commerce.
Education stocks in India aided by growth in the online tutoring market
Online tutoring has evolved as an essential component of the country’s education sector, creating new opportunities in education stocks in India. According to the technology research and advisory firm TechNavio, the online tutoring services industry in India is expected to increase by $10,585.08 mn at a CAGR of 17.03% between 2022 and 2027.
According to TechNavio’s report, an increase in student and parent education awareness has increased spending on online tutoring. Along with that, it cited the increasing competition and demand for the preparation of admission tests for higher education as a major reason behind a rise in online educational spending in India.
“Furthermore, the government has also increased its expenditure on online-based education and tutoring, which directly impacts the adoption rate, especially in rural and semi-urban areas,” the report added.
This coincides with the fact that India’s edtech (education technology) market is growing rapidly. According to GlobalData, the India edtech market size was estimated at $3.42 bn in 2021 and is projected to grow at a CAGR of more than 30% from 2021 to 2026.
“Increasing internet penetration and digital literacy have enabled the growth of the edtech market in India in recent years, with technology increasingly becoming part of the educational process,” said GlobalData.
How to invest in education stocks in India
From established institutions to emerging players, here is a list of education stocks in India.
Veranda Learning Solutions
This Indian company offers students offline and hybrid learning solutions through competitive tests, professional courses, and short-term upskilling and reskilling initiatives. Veranda Learning Solutions announced that its revenue increased by 164.37% year over year to Rs 199.92 crore ($24.26 mn) in the fiscal year ended March 2023. During the same period, its net profit fell by 35.44% year-on-year to Rs 79.22 crore ($9.61 mn).
Listed on the National Stock Exchange of India (NSE: VERANDA) and the Bombay Stock Exchange (BOM: 5435), Veranda Learning Solutions has a market capitalisation of $14.13 mn. The company’s stock has fallen by 16.89% in the past year. It has a negative PE ratio of 12.28 and a price-to-book ratio of 3.61.
Navneet Education
Navneet Education is an Indian company that publishes educational and children’s books, along with producing scholastic stationery and non-paper stationery items. The company registered a 46% year-on-year rise in revenue, amounting to Rs ₹1,780.46 crore ($216.13 mn) for the fiscal year ended March 2023. During the same period, its net profit surged by 60.45% year on year to ₹189.99 crore ($23.06 mn).
Navneet’s stocks are listed on the Bombay Stock Exchange (BOM: 508989) and the National Stock Exchange of India (NSE: NAVNETEDULI). The company has a market cap of $363.56 mn. Since last year, the company’s shares have gained 31.02%. Along with that, the shares have a PE ratio of 14.89 and a price-to-book ratio of 2.60.
NIIT
NIIT is an Indian multinational skills and talent development corporation that offers a wide range of educational training services, including consulting services, curriculum design and development, learning administration, and strategic sourcing, among others.
The company registered a 36% year-on-year rise in revenue, amounting to Rs. 341.3 Cr ($41.43 mn) in the fiscal year ended March 2023. During the same period, its profit after tax amounted to Rs 3.2 crore ($388,455.1).
The company has a market cap of $132.31 bn and is traded on the Bombay Stock Exchange (BOM: 500304) and the National Stock Exchange of India (NSE: NSE: NIITLTD). The company’s shares have fallen by 155.4% since last year. It has a PE ratio of 4,181.45 and a price-to-book ratio of 7.58.
Editor’s note: All stock movement figures as of July 12, 2023.
