Class apart

Educomp Solutions is bullish about the education sector.

An almost Rs 54-crore elearning solutions provider "� one of India's few listed companies in this space "� Educomp Solutions plans to reach out to around 10 million learners through its products and services by 2008 and aims to be among the top 10 learning solution companies worldwide by 2010.

Its bullishness arises from two aspects "� it's performance on the stock markets and the good prospects of the education sector.

Growing at over 60 per cent annually, Educomp has partnerships with companies like Wipro, Microsoft, Intel and World-Links and focuses on the K12 group (Kindergarten to Class 12 students only), explains Shatanu Prakash, M D, Educomp Solutions.

Its revenue flows from three broad streams: Content licensing to schools; Bridging the 'Digital Divide' (by taking IT even to rural areas) and 'Professional Development (of tutors)'.

The first revenue stream envisaged the launching of a countrywide initiative to introduce its 'Smart_Class' programme to schools across 50 Indian towns and cities.

"The program for digitising classrooms is being offered through a BOOT (Build, Own, Operate and Transfer) model, in which Educomp installs the entire technology infrastructure and provides a digital content library (over 7000 content modules) to schools along with in-campus training of teachers and maintenance support," explains Prakash.

Each centre costs around Rs 5 lakhs and the monthly subscription for each student is around Rs 100-150. Prakash expects each centre to break-even at a strength of 100 students.

Educomp's 'Smart_Class' flagship programme has also been launched as pilots in Singapore and the US too. In India, there are over one-lakh students using 'Smart_Class'. Prakash is also upbeat about the US market where the government spends $30 billion annually on school education under the 'No Child Left Behind' Act.

If one considers this 'Content-licensing' business, as of March 31, 2006, Educomp had contracts with 91 private schools which contributed around Rs 20 crore to its revenue. The gross margins are around 60 per cent.

The second revenue stream focuses on bridging the 'Digital Divide'. It recently signed contracts with the Gujarat Council of Primary Education (GCPE) and School Education Department of West Bengal to provide them with computer-aided education services in 500 schools each.

Value of the deals put together is worth Rs 50 crore. It also signed five-year contracts with around 700 schools in Kolkata, Orissa, Uttar Pradesh and Tripura. The gross margins here are around 38 per cent.

The third revenue stream revolves round 'Professional Development'. Educomp has tutored around 800 kids in the US through its 'Green Board' initiative.

It has trained close to three lakh teachers in 20 metros and 40 towns across India, having worked with 5000 schools so far. It expects this business stream to grow at 100 per cent for the next five years.