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FUSION KLASSROOM EDUTECH LIMITED

Fusion Klassroom Edutech Limited - Related Party Transactions

Introduction

Based on the Red Herring Prospectus (RHP) dated September 26, 2025, and subsequent filings, here are the “Related Party Transactions” (RPT) details Fusion Klassroom Edutech Limited.

Business Model Operations

  1. Business Model: Klassroom operates a hybrid, multi-channel model integrating online and offline learning. It features an AI-powered Education OTT app (B2C) for subscriptions, 30 partner-led offline centers for tutoring and skill development, and a B2B/B2G segment that executes large-scale government and institutional projects.
  2. Comparable Peers: Listed peers include Physicswallah Limited, MPS Limited, Veranda Learning Solutions Limited, and Arihant Academy Limited.
  3. Raw Materials: As a service-sector company, there is no traditional raw material consumption. The company procures stock-in-trade such as learning devices (tablets) and printed courseware to bundle with its digital offerings.
  4. Factors Affecting Business: Key factors include government policy changes (NEP 2020), the ability to adopt new technology (AI/ML), student retention, and geographic concentration risks.
  5. Competitive & Regulatory Landscape: The industry is highly fragmented and competitive. Regulatory factors include compliance with NEP 2020, guidelines on misleading coaching advertisements, and data protection laws like the DPDP Act.
  6. Total Addressable Market (TAM): The overall Indian EdTech market is projected to reach USD 29 billion+ by 2030 with a CAGR of 27.65%.
  7. Customer Concentration: Revenue is concentrated, with the Top 1 customer contributing 40.11% and the Top 10 contributing 78.72% in FY 2025-26.
  8. Revenue Mix (Domestic vs. Exports): The revenue is 100% domestic, with no reported export sales.

Financial Performance Health

  1. Balance Sheet Health: The balance sheet has expanded significantly, with Total Assets growing from â‚ą448.48 lakhs in FY 2023-24 to â‚ą2,545.86 lakhs in FY 2025-26. The company maintains a healthy Debt-Equity ratio of 0.19.
  2. Operating Cash Flows: CFO was â‚ą1,071.40 lakhs in FY 2025-26, up from â‚ą93.84 lakhs in FY 2023-24.
  3. Debt Raised (Last 3 Years): Total debt stood at â‚ą342.61 lakhs as of March 31, 2026, comprising â‚ą95.59 lakhs long-term and â‚ą247.02 lakhs short-term borrowings.
  4. Capital Expenditure: Massive investment in intangibles (content and software); total CapEx was â‚ą1,437.16 lakhs in FY 2025-26.
  5. Return on Capital: ROE for FY 2025-26 was 53.45% and ROCE was 45.60%.
  6. Asset Turnover: Calculated as Revenue from Operations divided by Total Assets, the ratio was 0.90x in FY 2025-26, down from 2.25x in FY 2023-24 due to heavy front-loaded investment in digital assets.
  7. Growth Trends (Sales, EBITDA, PAT): All three are increasing rapidly. Sales grew 128% in FY 2025-26; EBITDA rose from â‚ą101.54 lakhs (FY24) to â‚ą1,299.00 lakhs (FY26); PAT rose from â‚ą34.38 lakhs (FY24) to â‚ą760.12 lakhs (FY26).
  8. Margins: EBITDA Margin increased from 22.16% (FY24) to 56.38% (FY26), and PAT Margin rose from 7.50% to 32.99% over the same period.
  9. Cash Flow Analysis Table (â‚ą in lakhs):

The EBITDA to CFO conversion % is decreasing.

Risks Management Outlook

  1. Key Risks: High geographic concentration (Uttar Pradesh, Maharashtra, and Rajasthan contribute over 90% of revenue), reliance on high-speed internet in expansion areas, and high faculty attrition rates.
  2. Red Flags: Negative free cash flow for the last three years due to high asset capitalization, high customer concentration, and a decreasing profit-to-cash conversion rate.
  3. Growth Plans: The company plans to transform its platform into a full-scale AI-powered ecosystem, establish new AI/ML labs in Mumbai, Pune, and Jaipur, and pursue inorganic growth through unidentified acquisitions.
  4. Government Intervention: Government policy (NEP 2020) acts as a strong tailwind, but a shift toward in-house government platform development is a noted risk.
  5. Promoter Quality: The promoters have extensive education industry experience (up to 40 years). Mr. Dhruv Javeri is a "BW Disrupt 40 Under 40" awardee. They have successfully pivoted the company to profitability since FY 2023-24.
  6. Industry Trends: Management views the current shift toward hybrid and digital-first learning as a structural change reinforced by NEP 2020 and permanent changes in learner behavior.


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