Sanjeev Mansotra, Chairman & Global CEO, CORE Education & Technologies Ltd is a first generation entrepreneur who founded CORE Education & Technologies Ltd. (CORE) in 2003. Mansotra’s ability to forge strategic alliances with key partners across the globe has led to the bringing in of prestigious global education organizations like the University of Oxford; Centre of Higher Learning, NASA; Texas Instruments; East Valley Institute of Technology, Arizona into India. His unique understanding and skill in working with Government bodies have seen CORE form credible long term associations with Governments of the USA, UK and India among many others. Mansotra’s strategic vision has today resulted in CORE emerging as India’s largest global education leader present across the entire continuum of education – K-12, Higher Education, Skill Development. Mansotra is also the Chairman of the CORE Group which, apart from Education, consists of successful business entities across the globe in Wellness, Energy and International Business.
CORE Education & Technologies Limited is India’s largest global education company that has presence across 18 states in India, 46 states in the US, 40 LEA and institutions in the UK, 8 African and 3 Caribbean countries. We enable the creation of a better future across the globe by providing transformational and innovative solutions for the entire education continuum of K-12, Employability Education and Higher Education.
Replying to Anil Mascarenhas of IIFL, Sanjeev Mansotra says, “Our global order book as of 31 March 2012 stood at about US$ 220mn with India contributing roughly about US$ 120mn.”
Brief us about your business model. Explain to us your presence in the education space.
Core Education & Technologies Ltd is India’s leading global educational continuum, listed in BSE and NSE with headquarters in Mumbai, and international head quarters in Atlanta and London. CORE is an end-to-end, technology-enabled education solutions provider that aims to transform the education spectrum that covers Pre-K, K-12, Higher Education and Vocational Education. CORE’s 95% of revenue were derived from US, UK, African and Caribbean countries with increasing focus on Indian operations which contributed 4% in FY12. CORE has a presence in 15 countries with 36 offices across the globe.
Give us an overview of the education sector. What is the size and what growth rates is the industry witnessing?
Governments around the world are currently faced with unprecedented challenges in educating and preparing their populations to compete in the global marketplace of the 21st century.
The overall education market on a global basis amounts to US$ 2.2 trillion in which CORE is focused on key developed markets such as USA ($ 750 bn), UK ($ 60 bn) and have started focusing on emerging markets such as India ($ 40 bn), Middle East ($ 67 bn) and endeavors to serve as a vital partner to both the public and private sectors through its delivery of highly-effective, technology-based solutions that track and assess students’ academic progression as well as teaching effectiveness.
We have already marked our Pan India presence. We are working with various state governments such as Haryana, Maharashtra, Gujarat, Jharkhand, Nagaland, Karnataka, Assam providing various solutions in advanced technologies and education governance space. We have a significant presence in developed economies such as USA and UK and have entered into strategic partnerships for our business growth. In US, we have a presence in 46 states out of 50 while in UK we are present in 40 counties with a network of about 1600 schools. Apart from that, we are present in two Caribbean countries and seven African nations.
Which are the various segments you cater to? How is the revenue pie distributed?
The company provides a wide range of products and solutions spanning across various stages of education, covering K-12, Higher Education and Vocational Training. CORE’s business is aligned across six key elements of education delivery that are designed to present CORE’s customers with a comprehensive, end-to-end solution viz –
* Assessment & Intervention
* Advanced Technologies and
* Consulting Solutions
What are the enabling factors that will help CORE build new paradigms in Education?
Enabling factors for CORE can be identified as follows –
* Unprecedented global need for more effective and accessible education solutions creating massive market opportunity
* Comprehensive platform providing economies of scale
* Significant focus on research augmented product innovation & development
* Strategic partnerships driving industry leading content and innovation
* Cost efficient onsite off shore delivery model
* Strong and focused management team
What is the current order book?
Our global order book as of 31 March 2012 stood at about Rs. 1100 crore (US $ 220 million) with India contributing roughly about Rs. 600 crore (US$ 120 million) and balance contributed by other geographies.
Brief us about your capex plan? How would they be funded?
We do intend to focus on our Advanced Technologies business in emerging markets and will continue to make investments in product development to augment our growth with a adequate mix of debt and equity
Tell us about your financials? What is the outlook?
CORE has exhibited robust top-line growth with historical revenue CAGR of 33% from FY 2009 – FY 2012 as well as significant operating leverage as EBITDA margins has expanded by 6.9% over this timeframe. CORE’s scalable business model has been driven by the Company’s ability to leverage its on-site-offshore model in the midst of integrating various acquired businesses. In addition, the Company’s track record of successful student outcomes has translated into a highly stable and recurring revenue base. This dynamic has led to high levels of visibility for future revenue from CORE’s existing client base as well as creating a reputation for CORE as a trusted partner in an industry that relies, in part, on customer referrals when chasing new business.
You have done a number of acquisitions over the years. Have you managed to successfully integrate them? Any further inorganic plans? In which segments?
CORE has carried out as many as 12 successful acquisitions in the past 7 years. It acquired US$ 35mn UK-based education firm ITN Mark and completed 3 FCCBs of USD 12.25 mn, US$ 80mn and US$ 75 mn respectively in past 5 years. CORE Education also bagged one of India’s biggest education advanced technologies projects worth Rs. 295 cr.
As a result of the CORE’s successful track record of strategic acquisitions, it is regularly approached to consider new acquisition opportunities and proposals and is frequently invited to bid for particular assets. CORE intends to continue evaluating acquisition opportunities and proposals as they arise and may act rapidly to pursue attractive future opportunities.
What would be your suggestions to the government to improve education in our country?
India needs significant quality improvement in education and hence governments at all levels should encourage PPP through initiatives like infrastructure support, tax breaks, co-funding of local IP creation and facilitate capacity building of industry manpower.
Quality improvement is the major area that needs to be given more focus. Government of India has an agenda of Access, Inclusion and Quality in education hence equal amount of weightage should be given to all these three and it can be achieved only through ICT and through PPP model.
Also, government should be open to create more IT driven accountability frameworks with PPP so that planning & outcomes are transparent to all stakeholders.
How difficult is it for a new entrant into this business? What are the entry barriers?
This sector is highly regulated by various regulatory bodies, Central and State Govt., were policies and frameworks are laid and it takes its own course to get implemented. Further, Education is also considered at Social Subject in India, so, expertise and domain knowledge in the field is required and it takes years to learn and build.
Education is dynamic in nature, constant innovation on product and solution front is required in the sector to address the sector and its demand.
Profitability is also a key issue for serious players who came into the segment with long term outlook and sustainable solutions. CORE has worked with various governments of the most developed and challenging markets such as USA and UK and our experience & expertise from these tested markets for building innovative products and solutions come handy for India markets. All these offerings are accessible and can be adapted, applied and scalable to the needs of Indian markets. Thus, we attempt to build cost advantage compared to other players.
What is the future of education likely to be in terms of delivery in the coming years?
Education customers are showing great deal of trust on IT based & output driven products & solutions, and we have seen various states adopting cloud based solutions, Software as a Service (SaaS), Platform as a Service (PaaS) in their operations & we expect these demands to grow to next level.
Output driven solutions at various government and private sectors will play a major role, where return on investment is guaranteed and it can be achieved without hampering the quality education. CORE’s plans to push its globally successful products and solutions like Assessment (which assesses a student’s progress in class), MIS (to keep track of schools day to day operations and expenses), School Quality improvement programme (aims to improve teacher’s teaching quality in schools and teacher training), E-Governance initiative like Child Tracking System (CTS, which creates Unique ID for every child in school covering entire state) etc., in Indian market.
Comment on the major alliances you have and what do they bring to the table?
CORE also has some prestigious global partnerships for building new paradigm in education. Company’s alliance with University of Oxford for teacher capacity building focuses on assessing teacher enhancement, developing training & intervention modules and create content. Company has also entered into a partnership with the Centre of Higher Learning at NASA, for cutting-edge Immersive 3D Visualization technology. CORE will bring modern 3D immersive learning by simulating real life experience for complex subjects on topics that are difficult for students to grasp, learn, experience and then apply.
Further under vocational training segment, CORE has an agreement with East Valley Institute of Technology (EVIT), an Arizona based non-profit public school, to develop a high quality CTE curriculum (including virtual and non-virtual coursework) as a part of “Core Careers” (a technical education program for high school and post-secondary education in online and physical environments).
These initiatives are in line with the strategic focus of CORE to offer holistic and integrated Global Education Solutions through a single window.
Do you hire from B-Schools? What is your message to B-School students to become job-ready?
We definitely hire from leading B schools of the country. All B schools students should take industry training/internship very seriously to become ready for their future jobs.
What would you describe as your key differentiators?
CORE’s biggest differentiators are its vast international expertise and its end-to-end education solutions spanning both the front & back end of the education business – which is unmatched by any other player in the sector today. Unlike other Indian education companies, CORE has worked extensively with governments from across the world in building solutions to support the highest standards of education. We have built strong domain knowledge in the education sector, having product suites providing end-to-end solutions to education institutions, to manage various functions of the public education system. As a result, we believe that our end-to-end product offerings increase customer satisfaction, and hence increasing CORE’s revenue stickiness from existing clients.
Global Delivery Model
Headquartered in India, we provide substantial cost advantage to our subsidiaries in US and UK, delivering quality solutions to our clients from multiple locations.
Aggressive growth strategy
CORE’s strategy has been to acquire companies which have IPR-led products and are available at 1-1.2x TTM sales, and are in the early stage of business, are cash strapped and finding it difficult to grow on their own.
We have retained the core management teams of most of our acquisitions so as to benefit from the domain expertise and to leverage existing client relationships. CORE has successfully integrated the businesses and the personnel of the acquired companies, to ensure a smooth amalgamation of the offerings and the services for the education community.
With the world class array of products and solutions, coupled with domain knowledge, we are all set to penetrate developing markets like the Middle East, Africa and Sri Lanka.
Add Research Augmented Product Innovation & Development global RAPID – for global markets. Company remains focus in creating IP that helps us differentiate from conventional competition. Examples of item bank development in New Jersey, special education solutions from Atlanta office, teacher learning platforms from oxford, STEM solutions from Mumbai.
What is your shareholding pattern?
Around 47% is held by Promoter Group entities with 27% held by institutions and balance held by general public with a market capitalization of about $ 600 mn as of date.
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