Drishti IAS posts Rs 405 Cr revenue and Rs 90 Cr PAT in FY24

Offline coaching firm Drishti IAS Institute crossed Rs 400 crore of revenue during the previous fiscal year ended in March 2024. Moreover, the profits for the Vikas Divyakirti-led firm touched Rs 90 crore in the same period.

Drishti IAS’s revenue from operations increased by 30.6% year-on-year to Rs 405 crore in FY24 from Rs 310 crore in FY23, the consolidated financial statements filed by its parent (VDK Eduventures Private Limited) shows.

This highlights impressive growth over the past four years, with the Delhi-based company's revenue rising from Rs 40 crore in FY21 to Rs 119 crore in FY22, and further growing to Rs 310 crore in FY23.

The 26-year-old educational platform mainly provides offline coaching to help students prepare for the Civil Services Examination (CSE). Income from the coaching services accounted for 94.8% of the total operating revenue which increased by 37.6% to Rs 384 crore in FY24 from Rs 279 crore in FY23.

The remaining income is generated from the sale of study materials, including pen drives containing coaching classes, books, test papers, and other related resources. The firm also added Rs 15.3 crore mainly from interest on investments which took the overall revenue to Rs 421 crore in FY24 from Rs 314 crore in FY23.

Drishti IAS operates seven institutes, including two in Delhi (Karol Bagh and Mukherjee Nagar), three in Uttar Pradesh (Noida, Prayagraj, and Lucknow), and one each in Jaipur and Indore. 

Mukherjee Nagar Institute is the largest revenue contributor for Dirshi IAS which accounted for 58% of the total coaching income followed by Prayagraj, Jaipur, and Karol Bagh.

On the cost side, Drishti IAS employee benefits and faculty (teachers) charges accounted for 40% of its overall cost. This cost cumulatively increased by 41% to Rs 117 crore in FY24 from Rs 83 crore in FY23. During FY24, Drishti’s spending on advertising jumped 3.4X to Rs 51 crore in FY24.

Notably, Drishti IAS paid a total of Rs 15.17 crore to Vikas Divyakirti, which included Rs 3.97 crore in rent, Rs 5.2 crore in salary, and Rs 6 crore in faculty charges. Additionally, his wife Taruna Verma received a salary of Rs 2.4 crore in FY24.

Its rent cum electricity, legal, procurement of study materials, traveling, and other overheads took the overall expenditure to Rs 289 crore in FY24 from Rs 197 crore in FY23. See TheKredible for the detailed cost breakdown.

Higher spending on employee benefits and advertising resulted in a modest 3.4% increase in net profits, which rose to Rs 90 crore in FY24 from Rs 87 crore in FY23. The company's ROCE and EBITDA margin were recorded at 55.7% and 33.73%, respectively, while the expense-to-revenue ratio stood at Re 0.71. As of March 2024, the company's total current assets were valued at Rs 88 crore, with cash and bank balances of Rs 54 crore.

The Rs 90 crore PAT is not something you will read about in privately held firms in India, and just for that Drishti IAS is in a unique place.  A powerful brand, track record, strong word of mouth and a priceless alumni network have all combined to make it a force to reckon with even with a middling topline.  The firm has scaled up on the back of what is a single exam, and in doing that made itself a lot of money, and based on peers, a valuation upwards of $600 million. But of course it will not go public, or sell anytime soon, considering how well placed it is. In many ways, an outlier that continues to surprise.