Anuj Ahuja, CEO, DMC Education has done his MBA from IIM-Banglore in 1991. He is also M.tech in polymer science from IIT-Delhi. He is passionate about education and has more than 15 years of experience in Education sector.DMC Education focuses on supplementary education verticals and came into existence in 2001 ( in the brand name of Trump & Gates). DMC Education Ltd is a BSE listed company professionally managed by CAs, IITians & IIM Graduates. The company is destined to be one of the most trusted and fastest growing entities of its kind in the country. DMC Education envisions India as a talent pool of well groomed and adept personnel and the global epicenter of Entrepreneurs and Service Providers.
Replying to Anil Mascarenhas of IIFL, Anuj Ahuja says, “Domain experts from service industry in the delivery of content and using technology as an aid to deliver the courses are our other differentiators.”
Give us a brief overview of the education sector.
Education is primarily handled by the government through its school infrastructure and large Union Budget outlays. The Indian Government targets to guarantee elementary education to every child between the age of 6 and 14 years and for this purpose, it expects to increase access to education as well as improve the quality of education being provided. It has been laying greater emphasis on the quality of education imparted in the country since the Eleventh Five-Year Plan. The quality of education has assumed importance in light of the poor academic achievement by the students. We believe poor academic performance by students and lack of proper training in soft skills would reduce their employability post passing out of the education system.
In line with this, to improve access to and taking care of the quality aspect of education, the government has introduced programs like the Sarva Shiksha Abhiyan (SSA), Mid-day meal schemes and Kasturba Gandhi Balika Vidyalayas
You see the government playing an active role in education?
The Central Government continues to play a leading role in the evolution and monitoring of educational policies and programmes, the most notable of which are the National Policy on Education (NPE), 1986 and the Programme of Action (POA), 1986 as updated in 1992. The modified policy envisages a National System of education to bring about uniformity in education, making adult education programmes a mass movement, providing universal access, retention and quality in elementary education, special emphasis on education of girls, establishment of pacesetting schools like Navodaya Vidyalayas in each district, vocationalisation of secondary education, synthesis of knowledge and inter-disciplinary research in higher education, starting more Open Universities in the States, strengthening of the All India Council of Technical Education, encouraging sports, physical education, Yoga and adoption of an effective evaluation method, etc. Besides, a decentralised management structure had also been suggested to ensure popular participation in education. The POA lays down a detailed strategy for the implementation of the various policy parameters by the implementing agencies.
Comment on your Plansteps acquisition. What does it bring to the table?
Plansteps is a focused company in career counseling space and DMC is in the preparatory market whether GATE preparations, IAS and study abroad etc. So it is a forward integration to provide counseling to students who are undergoing our tuition.
How difficult is it for a new entrant into this business? What are the entry barriers?
Rising real estate costs are the entry barriers. Quality manpower is also expensive.
Explain to us your business model. How has it evolved over the years?
Business model is B to C for customers and B to B for corporates for the same product with an average profit margin of 35%.
What is the future of education likely to be in terms of delivery in the coming years?
Technology is going to change the pace of education. Satellite-based learning, mobile, web and TV is going to get education a lot of global recognition. Merger and acquisition activities are going to wipe out the unprofessional and small, run of the mill organisations.
Comment on your brands and what is the revenue and profit contribution from each?
Our brands include Study Abroad, Trump and Gates, Actuarial science, India’s first actuarial business, Lifelong Learning and Plansteps which is into ethical career counseling. The profit margin varies from 25% to 40% margin depending on different products.
How are the margins in the education business?
EBDITA margins varies from 15% to 30%.
Do you hire from B-Schools? What is your message to B-School students to become job-ready?
Yes we do hire from B- Schools. There is no substitute to hard work and experience and real world is quite different from what they are taught at different schools.
What is your strategy for growth? What are your expansion plans and how would you fund the same?
Our strategy is to use our print media currency to acquire more customers in our existing centers, open more franchisees and acquire companies in the same segments and in areas where we are not operating. There are a lot of sitting ducks in education sector who are not able to grow because of lack of capital, management issue or are looking at exiting at a healthy profit.
You also have specialized content. How is this business coming about?
Yes we have specialized content and unlike other knowledge industries where your asset walks in everyday and walks out every night we have copyrighted the content and patented the same.
What would you describe as your key differentiators?
We have an excellent team of trainers with top management from IIT and IIM with rich experience in education sector. Domain experts from service industry in the delivery of content and using technology as an aid to deliver the courses are our other differentiators.
What is the market for supplemental education ?
The market is estimated at Rs. 80bn and growing at 16 % to 25%. The break up would roughly be Engineering tutorials at Rs40bn, Medicine at Rs. 20bn, IAS at 3bn and MBA at Rs5bn and the remaining shared by various other segments.
How many business partners do you have? What is the cost for becoming a business partner. How long do they take to break even?
We have 20 business partners and the cost is about Rs2mn. It takes approximately 1 year to breakeven.
Your message to shareholders?
As a company, we are eyeing growth and looking at becoming a leader in the area we are operating.
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