Tree House Education’s profitability declines in Q3FY16

Tree House Eduaction (THEL) declared its Q3FY16 results on February 14.The company’s revenue increased by 5.03 per cent to Rs 55.78 crore in Q3FY16 as compared to same period in previous fiscal year.Its total expenditure increased by 46.44 per cent to Rs 30.68 crore in Q3FY16 on a yearly basis.

THEL’s EBITDA declined by 21.95 per cent to Rs 25.1 crore in Q3FY16 on a yearly basis.The company’s EBITDA margin contracted by 2055 basis points to Rs 45 per cent in Q3FY16 as compared to same period in previous financial year. It’s PAT also dropped by 59.52 per cent to Rs 6.12 crore in Q3FY16 as compared to same period in previous fiscal year. THEL’s PAT margin contracted by 1750 basis points to 10.97 per cent in Q3FY16 on a yearly basis.

Considering nine months' financials, THEL’s revenue increased by 16.1 per cent to Rs 1821 crore in 9MFY16 as compared to same period in previous financial year. The company’s EBITDA too increased by 4.5 per cent to Rs 995 crore in 9MFY16 on a yearly basis. However,its PAT decreased by 15.7 per cent to Rs 369 crore in 9MFY16 on a yearly basis.

THEL witnessed net addition of 168 preschools over last four quarters, including 162 self- operated preschools. The company has 730 centers as of December 2015 quarter. Out of the total centers 621 are self-operated preschools.

THEL is now present in four cities in India and has now launched in Faridabad during this quarter.The company provides school management services to 24 K-12 schools in three states. The Board of Directors has approved the Scheme of Amalgamation with Zee Learn in Q3FY16.

The share price of THEL decreased by 8.4 per cent on bourses in early trades; and closed at Rs 102.1 on an intraday basis.

THEL runs quality preschools and also provides educational services to K12 schools throughout the country. The company has revolutionized the concept of pre-school pedagogy in India through the use of innovative teaching methods and child-focused personal care.