Budget Coverage

A class act

Meera Siva | Updated on February 02, 2018 Published on February 02, 2018

The change

The tone and tenor of the Budget proposals point to 3Qs — qualification, quality and quantum — for the sector that is focussed on the 3Rs. The measures are extremely positive and a great step to reset the education sector that has not learnt new ways to launch itself.

The focus on improving the skill and qualification of teachers in schools through training is a key positive that will have an immediate impact on the quality of education. The idea to treat education from primary to class 12 without segmentation into primary, middle and high school is also a welcome one as it will help evolve a holistic view on learning outcome.

The plans to build on the results of the National Survey of children to develop strategies to improve the quality of education will have a long-term benefit. Better quality of education in Government schools can, over time, help stem the exodus of students to private schools.

The focus on research is also a much needed measure. The quantum of thrust, as seen by the huge investment proposed towards RISE (Revitalising Infrastructure and Systems in Education), will boost the creation of research-focussed institutions in the country. Funding for developing World Class Institutions has also been increased. These, along with the Research Fellows program to promote research, will pay dividends in the form of Intellectual Property creation. The focus on research and higher education will benefit players such as CL Educate.

The background

Education has been a big segment in the country, given its young population. Private education providers in the space have done well, as more children joined schools but the quality of public education faltered. Likewise, lack of growth in higher education institutions, even as college enrolment increased, led to the sprouting of private colleges, with no way to measure quality standards.

In spite of the opportunities, listed education players have not fared well, over the years. Earlier measures to bring digital education in schools have not been successful and companies in this segment faced various issues. Last year, the share price of players in the K-12 space, such as CL Educate and MT Educate, dropped, even as the broader market was upbeat. Others such as Educomp and Zee Learn saw tepid price action.

The unlisted space has been better for education companies. Many smaller players who offer technology or services saw robust private equity funding.

The verdict

The Budget will bring a lot of cheer to students and parents. Investors in the education space can likely see interesting IPOs from players who focus on education quality, in the next few years.

Published on February 02, 2018
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