On Saturday, January 25, FIITJEE – one of the largest training institutes in India primarily for engineering aspirants – said, it was working to “resume operations at all place within a reasonable time.” This came after centres pan- India, but primarily across Delhi – NCR, UP and MP, closed down overnight leaving several students in the lurch.

A glance through FIITJEE Ltd’s – almost a three-decade old entity - last available finances by businessline, indicate some stress with declining profits – down 77 per cent on a three-year basis (FY21-23), falling EBITDA (earnings before interest, tax, depreciation and amortisation), drop in revenues by 8 per cent (for a three year basis).

On a five year comparison (FY19 – 23), revenues are down 5 per cent, and profits are up 3 per cent CAGR.

As per filings with RoC and also available with Tracxn – the global start-up data platform - the last financial reports are updated till FY23.

In FY23, the company, as per Tracxn – had a negative cash flow from activities to the tune of ₹18 crore, and cash flow from financing activities were also in the negative, at ₹8.2 crore. Cash and cash equivalents for the period was ₹5.3 crore.

Numbers Game

The data reveals, FY23 revenues were up 22 per cent up year-on-year to ₹481.1 crore, from ₹394.4 crore in FY22 (a year partly impacted by Covid). Revenues have however took a fall from the FY20 peak, when it stood at ₹618 crore, up by 1 per cent-odd y-o-y over ₹615 crore of FY19. Highest revenue fall was reported in FY22 – a Covid year – at ₹394.4 crore.

Interestingly, during this five year period under review the company wiped out losses of FY19 which were to tune of ₹135 crore-odd and reported a profit of ₹20 crore in FY20. Profits peaked (in the five year review period) in FY21 to ₹57 crore, but there was a sharp decline a year later to ₹0.4 core in FY22. In FY23, the company had slipped into losses of ₹71 crore, as per Tracxn data.

The company’s EBITDA – a measure of profitability – also indicate a similar fluctuation.

In FY23, there was an EBITDA loss of ₹41.2 crore, while in the year-ago-period there was a positive EBITDA of ₹23.9 crore (for FY22). However, FY22 EBITDA was down 75 per cent-odd y-o-y from the ₹101 crore in FY21 – when it had peaked over a five year period. In FY20, EBITDA was 53.8 crore. In FY19, the company had a negative EBITDA of ₹109 crore-odd.

FIITJEE is yet to respond to queries from businessline; or share a turnaround plan.

In fact, there has also been a fall in its teaching staff numbers. Last available numbers with Tracxn show it had 1431 employees in September 2024, down 37 per cent. In fact, the employee count has been going down on sequential basis too. As on April there were 1689 staff (down from 2042 in March), and since then the head count went down to 1670 in May, to 1495 in June, and so on till there was a slight jump in August at 1466.

The company has an authorised capital of ₹62.7 crore and a paid up capital of ₹42.5 crore.

What FIITJEE said earlier

The Delhi-based company issued an official statement last week pointing out that the current turmoil is because of “overnight desertion of the centre by the Centre Managing Partner along with the entire team” and that the “present turmoil in the institution is temporary”.

Explaining the financial set-up FIITJEE said, every managing partner is responsible for the P&L of the centre. And all centre-level operational decisions (strategy & planning for business growth, management, revenue generation, administration, infrastructure, costs & expenses) are managed and executed at “exclusive discretion and judgement” of the managing partners-cum-centre heads.

“The corporate office at Delhi only follows the advice of the Managing Partners in order to grow the business,” it said adding that managing partners have a profit-sharing model (besides getting a regular salary).

Squarely blaming the managing partners, the company said, “owing to mismanagement & exploitation ...FIITJEE’s financial situation worsened in January 2024. Group CFO forecasted that after 6 months, the company might run into operational cash crunch.”

In February 2024, the company had told its managing partners to “optimise excess manpower” while outlin(ing) a strategy for bouncing back.

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