The academic performance of Aakash Educational Services Limited (AESL) was robust in FY26, while the financial metrics showed signs of distress, with the total revenue growth remaining broadly flat and the operating profitability declining considerably. AESL generated revenue from operations of ₹2,041 crore in FY26. This is nearly the same trend as ₹2,032 crore achieved in FY25. The business model behind the coaching chain primarily includes two streams of income: core classroom coaching and franchisee operations.

Expenditure adjustments and operating overview

For the core coaching division (including comprehensive classroom programs delivered through company-owned learning centers), total operating income remained significant, accounting for 96% of the revenue scale. 

Income from the classroom tutoring division came to ₹1,959 crore in FY26, showing marginal growth from the ₹1,951 crore that was earned in FY25. Income from the franchisees, including the cost incurred in brand licensing and income sharing from partner-managed centres located in different cities, showed ₹82 crore in FY26 and ₹81 crore in FY25. 

The company also reported non-operating income and other income of ₹44 crore, elevating its overall income to ₹2,085 crore for the current financial year compared with the same figure of ₹2,085 crore in the earlier one.

The company achieved no growth in the top line of its financial statements, whereas its operating profitability has been hit hard during the fiscal year. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) fell sharply by 65% to ₹15.3 crore from ₹43.3 crore in FY25. 

The sudden fall in performance has an adverse impact on the company’s profitability, which has fallen to an EBITDA margin of just 0.75% in FY26 against 2.13% in FY25. This operating pressure was also evidenced in the return metrics, with the Return on Capital Employed (ROCE) dropping to -50.1% in FY26, from -52.54% in the previous period. 

Unit-level economics indicated that operational expenditures continued to surpass operational intake, with the company spending ₹1.16 to earn every ₹1 of operating revenue in FY26, compared to ₹1.17 spent per ₹1 of operating revenue earned in FY25.

Expenditures remained at a higher level in spite of continued cost management across primary operational expenditure heads, as captured in the financial results. The total expenditure in FY26 was ₹2,368 crore, which inched down from ₹2,378 crore recorded in FY25. 

Aakash Educational Services Limited’s largest cost driver continued to be employee benefit costs, which accounted for over 50% of the group’s total cost load. Costs incurred in personnel and faculties reduced by 1.2% to ₹1,315 crore in FY26 from ₹1,331 crore in FY25. 

Costs on promotion and advertisement reduced marginally as advertising cost declined by 1.9% to ₹154 crore in FY26 from ₹157 crore incurred in FY25. Cost of procurement for educational content and courseware was reduced by 4.5% to ₹64 crore in FY26 from ₹67 crore in FY25.

However, overhead costs, facility rents, legal expenses, and utility bills erode those savings and keep overall operational expenditures at a high level based on revenue generation from sales.

Capital infusion and net earnings position

The negative operating difference between operating revenues that remained flat and fixed costs that remained significantly higher resulted in continued losses before tax and extraordinary items. The company incurred a pre-tax loss of ₹283 crore in FY26, which was slightly better than the pre-tax loss of ₹293 crore in FY25. 

After making necessary adjustments for deferred tax liability and provisions, the net loss incurred during FY26 stood at ₹212 crore against a net loss of ₹221 crore in FY25. The operational figures are exclusive of one-off provisions and legacy liability associated with parent entities or structural reorganisations, providing a clear representation of operationally-based metrics. 

Its balance sheet at the end of FY26 reflected current assets of ₹325 crore, comprising current assets minus inventory of ₹310 crore and cash and bank balances of ₹65 crore, against current assets of ₹341 crore and cash and bank balances of ₹72 crore at the end of FY25.

The financial path is concurrent with several corporate restructurings, ownership changes and capital infusion programs aimed at stabilizing the company’s future operating system. The company has undergone changes in its structure after association with the parent company Think & Learn Private Limited (Byju’s), which was placed in insolvency proceedings. 

The Manipal Group, led by Ranjan Pai, became the top equity stakeholder in the test preparation company through two methods: debt-for-equity conversion and buying a stake from private equity firms and initial investors. 

The capital raise programmes, such as rights issues, have progressed since approval from different regulatory and judicial bodies, including NCLAT and the Supreme Court of India, as disclosed in recent corporate filings. 

The board undertook capital injections with various investor entities based on their shareholding percentages to strengthen working capital needs and control operational expenses within its pan-Indian network.

The continued and sustained capital injection, debt restructuring, and restructuring of the firm’s governance, spearheaded by majority shareholders, are important moves toward recapitalizing the firm. Its ability to maximize capacity at physical locations, reduce costs, and reinstate its operating margins without compromising its core classroom brands requires a long-term recovery strategy.

Conclusion

The financial figures for FY26 highlight Aakash Educational Services Limited’s continued dominance over the competitive landscape of entrance exam coaching services, keeping its financial growth steady with a core revenue of over ₹2,000 crore.

The 65% drop in EBITDA and performance margin of 0.75% demonstrates significant profitability pressures due to high fixed employment costs and marketing needs. Although the operating loss rate is contained, operating revenues are lower than operating expenditure in terms of per-unit economics.