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India has a population of over 110cr, with a student
population of a massive 13.5cr, the largest in the world.
The total population grows by 1% (1cr) every year and
as a result, the student population is also increasing by
the same amount. India has a poor literacy rate and to
counter this, the Government has embarked upon an
ambitious drive to improve quality and accessibility
through the Public-Private Partnership route.
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 is the largest K±12 education company in

India. It serves approximately 8 million students and
teachers worldwide, and employs over 4000 people.
Educomp was founded and is led by Mr.Shantanu
Prakash. It serves the K-12 segment in US, Singapore,
China and Sri Lanka.

Educomp is publicly traded on the Bombay Stock

Exchange and the National Stock Exchange of India.
 Š Incorporated in September, 1994 by Mr
2  Shantanu Prakash as a Private Limited
Company

Š In 2000, Educomp converts into a Public

Limited Company and enters the e-learning
space 2003: Launches Smart Class
content solutions
 c ! 
Š Provides its education products and services to
both private and public schools
Š The Company¶s key business areas are:
Š Business-to-Business initiatives:
± SmartClass division
± Instructional and computing technology (ICT)
solutions for government schools through its ICT
division,
± Teacher training programs under Professional
Development.
Š Direct Initiatives:
± educational aids, CD-ROMs and learning
content through its online initiatives (including
MathguruTM and Learning HourTM)
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Š Technology right inside the classrooms
Š It enables teachers to select and use digital content
modules developed using graphics and 3D animation
Š Educomp has developed a digital content library
comprising more than 16,000 content modules on
subjects such as science, mathematics and social
sciences
Š Educomp had Smart Class contracts with 1267 private
schools as on 30 September 2008 with over 1.4 million
students learning through Smart Class multimedia
content
Š imed at private schools
Š Used sources such as graphics,3d images and
video clips along with traditional chalk board
method of teaching. This helped in visualizing
things better with the help of graphical
representation.
Š Smartclass Rolling Digiboard system was used
to convert classes into smart classrooms. The
system was connected to the pc in the
classroom which in turn was connected to the
knowledge center of the school.
Š Teachers used pc in the classroom to access
content from the knowledge center
Š Smart ssessment System was used to frame
MCQ¶s. Hand held remote device was used to
answer them
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c
  !
Š
irst mover advantage
Š Develop content in regional languages.
Š Huge subscriber base
Š Innovations- easy to understand.
Š Expanded into developing educational products that were
employment oriented.
Š low prices against competitors.
Š Expansion through - cquisition and joint ventures abroad &
integration and diversification strategies.
Š Training for teachers acted as a barriers for new entrants.
Š Shortage of teachers and NCLB helped it in tapping tutorial
market (SES).
   
Š Requires trained staff ± so less teachers
available.
Š Delay in installation
Š Govt. schools low spending on infrastructure.
Š wareness about other products than SM RT
CL SS.
Š Dependency on EDUCOMP for technical
assistance.
Š Changes require investment.
Š Charges on per student basis.
1.dependent on no. students.
2. dependent on reputation of school.
  22

Š Emerging IT era.
Š Lack of standardize and high quality education
in tier III towns.
Š Shortage of over 2lakhs schools in country.
Š Increased government focus on education.
Š Rising income of middle class segment &
educational priority for Indian parents.
 
Š It¶s a capital intensive business.
Š Being an emerging and growing business it
invites competition.
Š nalysts felt that payments from
governement are delayed.
Š Risk of change in government policy.
Š Gaining acceptance in tier II and tier III
cities.
 
Š Multimedia in private schools uses digital
educational content and infrastructure
solutions in schools as a teaching aid.
Š Educomp has pioneered a well-packaged
multimedia product called Smart Class
Š The product does not involve any capex or
opex cost for the school and students are
charged on a monthly basis (Rs150 per
student). Contracts are typically for a
duration of five years, which makes Smart
Class an annuity product.
Š Over the years, Educomp has managed to build a strong
content library comprising 16,000 modules and an
extensive distribution network with a 185-people sales
team.
Š The upfront capital cost (~Rs85,000 per class) is borne
by Educomp. ssuming an average of 40 students per
class (Rs150 per student per month; payments usually
on quarterly basis), the investment is recovered in just
over a year. The product fetches high margins (58% at
EBIT level) and superior RoCE (49%). Going forward,
players in this space are working on lowering their capex
requirements.
Š Multimedia in private schools uses digital
educational content and infrastructure
solutions in schools as a teaching aid.
Š Educomp has pioneered a well-packaged
multimedia product called Smart Class
Š The product does not involve any capex or
opex cost for the school and students are
charged on a monthly basis (Rs150 per
student). Contracts are typically for a
duration of five years, which makes Smart
Class an annuity product.
Š Educomp plans to substitute the plasma/
LCD screens used in classrooms with
digital whiteboards and projectors.
Educomp plans to lease the hardware for
new contracts as against owning the
assets.
Š The product is offered on the BOOT model (Build,
Operate, Own and Transfer) with a contract life of five
years, after which the hardware belongs to the school.

Š Educomp has set up three content development facilities

based in Gurgaon (NCR), Greater Noida (NCR) and
Bangalore. new facility is coming up at Parwanoo
(Himachal Pradesh) and is expected to commence
operations in
09.
Š Even though Educomp provides for a
hardware and software-lock in order to
protect the IP, content replication/
duplication by competitors or the schools
remains a risk. lso, high returns have
been attracting players to the space, which
means increasing clutter. However, we see
Educomp well placed to protect its
leadership as besides having a head-start
in the business with a strong brand, it has
also been acquiring µcompetitors¶. Thus, we
expect the growth momentum to continue
for at least 3-4 years.
"2"# #
# 
  $c! 22
Š 
 wins N SSCOM
oundation Social
Innovation Honours-2010.
Š
eatured in BT 500 2009 list of most valuable private
companies in India .
Š Ranks first in Education & Training in India¶s Best
Companies to Work
or 2009 .
Š Emerging
ranchisor of the ear 2008 .
Š
eatured in
orbes magazine's 200 Best Under Billion
.
Š warded CNBC-ICICI Bank emerging India award as
Company of the year 2005
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