The financial results of Byju’s for the year ended March 2022 were probably awaited with as much anticipation as the annual Union Budgets. When Byju’s released its results for the year ending March 31, 2021 about a year ago, they had stated that the revenue was readjusted since the auditors did not agree with the method of revenue recognition followed by the company.

Much has happened at Byju’s since the 2021 results were announced. Some investors have left the Board, the auditors resigned and a CFO joined and left the company in a matter of months. Byju’s had to renegotiate the terms and conditions of a loan with an US institution. The company appointed a new firm as auditors, got a new CFO and formed an Advisory Council to assist the company in navigating through uncharted waters.

For the year ended March 2023, Byju’s only announced a summary of their financials. Excluding all acquisitions, the core business of Think & Learn, has reported substantial growth, with total income surging to ₹3,569 crore from ₹1,552 crore in the previous year, marking a robust 2.3x increase.

The numbers

The EBITDA loss for the core business decreased from ₹2,406 crore to ₹2,253 crore year-on-year (YoY), coupled with an improved margin from -155 per cent to -63 per cent from FY21 to FY22. These numbers were the standalone financials and did not include the results of the many acquisitions that Byju’s made over the years.

Not all the acquisitions have gone according to plan — the consolidated numbers could possibly include some impairment losses. Considering the amount of publicity the company has received over the last couple of years, Byju’s would do well to announce their consolidated financial results.

They would do even better if they make public the main contents of the report of the auditors. The auditors for the year ended March 31, 2021 had some comments to make on revenue recognition and internal controls. Making public the main contents of the report of the new audit firm would clear the air on whether those comments still remain or have been rectified.

The management of Byju’s have also stated that the audited results for the year ended March 31, 2023 would be announced in due course of time.

IPO plans?

Not being a public company, Byju’s are not duty-bound to put out their results and audit reports in the public domain. It is possible that they are doing so to negate some of the negative publicity that they have encountered over the years.

Negative publicity impacts valuations adversely, which in turn impacts the returns to investors. It is apparent that the days of dizzying valuations and dazzling non-revenue metrics (such as the number of hours students engaged on the platform) are long gone. Further investment rounds would be harder to get.

It is being reported that Byju’s wants to take one of the companies it acquired — Aakash Education Services — public in 2024. It is possible that valuations for this IPO would be reasonable since the Aakash acquisition was probably the only one that was a win-win for both the parties — the acquiree profited generously from the transaction and Byju’s got much-needed cash flows.

Byju’s could use the time till the proposed IPO to get used to the culture of a public company — announcing the consolidated results on time every quarter, having an independent audit committee and enforcing robust corporate governance practices.

The bourses in India have never really discouraged companies that have a history of losses but with a reasonable management and tolerable corporate governance policies from being listed. There is no reason to believe that their treatment of Byju’s would be any different provided they step up their game.

The writer is a chartered accountant