Investor Presentation – Q1 Results

The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of this information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by MT Educare Limited (MTEL). This presentation may contain ‘forward - looking statements’ – that is, statements related to our future, not past, events. In this context, forward - looking statements often address our expected future business and financial performance and often contain words such as ‘expects,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes,’ ‘seeks,’ or ‘will.’ Forward – looking statements by their nature address matters that are, to different degrees, uncertain. For us, the uncertainties arise from the change in consumer behavior, trends in financial markets, integration of acquired businesses; and from various matters outside our control environment which include both regulatory and non-regulatory in nature. These uncertainties may cause our future results to be materially different than those expressed in this presentation. We do not undertake to update our forward – looking statements

Disclaimer

2

Index

3

Business Overview

Key Differentiators

Industry in a growth phase

Q1 Results and Financial Overview

Shareholding Pattern

51

188

2007 2012

27,324 29,227 31,774

11,240 11,52714,524

14,16317,546

20,236

2010 2011 2012

School Section Science Section Commerce Section

Coaching services being provided by Mr. Mahesh Shetty since

1988 under the brand name ‘MAHESH TUTORIALS’

Diversified product offering from school tutorial to

vocational trainings

Network consists of 196 coaching centres across 4 states of

which 14 are franchisees and rest are company managed

One of the leading coaching service providers in

Maharashtra with 147 centres in Mumbai.

66,534 students serviced* in FY12; 870 faculty as of June 30,

2012 at owned centres. Additionally, 164 resident faculty

Helix, the private equity investor, invested in the company in

November, 2007. Listed in April 2012

Growing No. of Centres

Rising Number of Students Serviced* With Large Pool of Faculty Member

58,300 52,727

5

502209

181School Section

Science Section

Commerce Section

Additionally, 164 faculty members as resident faculty members

* - The number of students from whom revenue has been recognized, in whole or part, based on the distinct courses availed by them during the relevant fiscal in the coaching centres operated by the company

‘Result oriented’ education support and coaching services provider

66,534

Franchisee Students Serviced not included

Business Overview

Science Section Commerce Section Others School Section

XIth and XIIthstandard

Test prep for the

engineering and medical

entrance examinations

XIth and XIIthstandard

Bachelor degree in

Commerce (UVA)

CA-IPCC , CA Final, CA-CPT

CS-Entrance

IXth and Xth standard

Maharashtra, Gujarat,

Karnataka State Board

CBSE

ICSE Board

INK VIII

Study Mate*

Coaching for Masters in

Business Administration

degrees

Government Programmes

Preschool, etc

6

In the Secondary and Higher Secondary School Pursuing graduate degrees

Undertaking CA examinations.

A coaching services provider for students…

Preparing for competitive examinations

* - Coaching services at six locations in Delhi and Gurgaon through a joint venture with HT Education Ltd.

Business Overview – Capturing the entire Value Chain

7

CA,

MBA

Basic Graduation – UVA (FY SY and

TY)

Entrance Examinations – ISEET, NEET, CA-CPT,

CS - Foundation

Junior College (Std XI and XII)

School Section (Std. VIII to X) – State Boards, CBSE, ICSE

Creates a strong goodwill

and base for future growth

Test-Prep Business across education spectrum

Graduation courses supported by skill development programs

Major Professional Courses

Junior Colleges: Management Contracts

Servicing students throughout their education cycle

Strong base ensures enough Capacity for higher end courses

Location of Centres

8

Mumbai, Mah. State Board • English Medium - 56 • Marathi Medium - 12 ICSE - 8 CBSE - 11 XI, XII and CET - 28 XI, XII and CPT, Graduate Courses, CA IPCC, CA Final - 32

► Gujarat Secondary and Higher Secondary Education Board - 3

► XI, XII and CET - 2

Rest of Maharashtra Mah. State Board • English Medium - 14 ICSE - 2 CBSE - 3 XI, XII and CET - 12

Karnataka Secondary Education Examination Board - 5 XI, XII and CET - 5

Tamil Nadu CA

147

31

10

5

3

9

Location Count Reconciliation

Particulars Nos.

As of 1st April 2012 110

Less: Closed Locations

On Relocations 5

Actual Closures # 5

Add: New Locations

On Relocations 9

Fresh Locations 7

As of 30th June 2012 116

New Locations added during the quarter: Mumbai - 5 Pune – 4*

*The addition of 4 locations in Pune was under agreement entered into with Behere’s Commerce Coaching Classes for sharing of infrastructure facilities and involved no regular capital expenditure for setting up a center. # - Four out of the five closures during the quarter are on account of closing down franchisee locations.

Coaching Centre A unit where coaching services are provided by our Company for a particular stream (Science, Commerce, CBSE, ICSE etc.) More than one coaching centre may exist at the same coaching location.

Coaching Location Physical location where coaching services are provided.

10

New Avenues of Growth

• In the last quarter, the company has entered into two new agreements for PU College Tie-ups in Karnataka in Tumkur & Hubli. As of 30th June 2012, the total number of PU College Tie-ups in Karnataka stands at 5. • The company had also entered into an agreement with Bunts Sangha to provide integrated college education & test prep coaching in the college in Fiscal 2012. Post degree college admissions in June, the first batches of the integrated college course have already started. • MT Educare entered into a tie-up with Behere’s Commerce Classes, one of leading coaching services provider in the city of Pune, whereby MT Educare will utilize its infrastructure to provide coaching to students of Std. IX, X and Std. XI and XII in the Science Stream on a revenue sharing basis. This enables the company to expand its reach without incurring any incremental capital expenditure. Also, MT Educare has entered the higher CA market in Pune in this quarter. • Content can be considered as one of MT Educare’s biggest strengths and planned monetization by way of sale of educational CDs containing Std. IX and X content in digital format is underway.

Organized and Diversified Player

Large Pool of Quality Faculty

Members

Result Oriented Quality Methods

of Coaching

Corporatized Structure and Experienced

Management Team

No one man show or ‘Star Teacher’ concept 12

Key Differentiators…

Well Recognized Brand &

Experience

7 of top 35 in CA Final

May 2012

20+ students > 90% in HSC + CET

Mar 2012

1,556 scored ≥ 90% in Xth Std. Exam

A.Y 2012

147 Centers at 93 locations in Mumbai

Jun 30, 2012

Currently operates 35 centers at in Rest of Maharashtra, T.N. , Gujarat & Karnataka

14 Franchisee Centers

1,034 faculty members

300+ faculty Post Graduates (CA, BMA, B.Ed)

Multiple faculty teaching each subject

Continuous training

Increased visibility amongst governments and international educational institutions

Assisted in raising capital from private equity investors

Scientific coaching methods and system

Focus on conceptual knowledge and holistic development

Technology to supplement coaching

Jun 30, 2012

Career Counselling:

Through seminars and exhibitions

Symphony:

A mix of music, yoga and diet controlling techniques to reduce stress, enhance memory and improve communication skills.

Hum Se Poocho:

A 24 hour helpline during exam time.

Counselling Sessions:

To facilitate communication between the teachers, students and parents on the students’ requirements.

Value Added Services

Prepared by faculty heads from reference material

Theory and concept of various subjects are addressed in an efficient and simple manner

Unique Study Material

Based on experimental learning

Audio Visual Technology, Animation & Graphics

Conducive environment

Leads to greater retention

Interactive Course Delivery

Close attention to individuals’ needs & helping them in their day-to-day academics

Close monitoring of the attendance

Regular parent-teacher meetings

Close Monitoring and Reviewing

Series of tests and examinations are conducted for each course

Printed model answer paper, along with the marking scheme

Mock board examinations for school section

Tests & Examination Series

COURSE

DELIVERY

PROCESS

13

…Teaching Methodology

Large Addressable Market

15

24,418

40,187

75,629

2006-07E 2010-11P 2014-15P

Market Size - Classroom based coaching industry

Rs. Cr

13% CAGR

17% CAGR

Rising disposable income

Increasing household spend

on education

Infra bottlenecks for formal education

Increasing private sector participation

Growth in addressable market

INDIAN EDUCATION SYSTEM

Informal Education

Vocational Education

Formal Education

Open & distance learning

Multimedia in Pvt Schools

ICT in public schools

Play School

Higher Education

K-12 Coaching Classes

The Indian coaching industry is expected to grow from Rs. 40,187 crore in 2010-11 to Rs. 75,629 crore in 2014-15.

Strong structural factors aiding the growth of this sector A large market opportunity

No. of Students appearing in various examinations

Source: Crisil Source: Crisil

Source: Websites of JEE, IIT Delhi, AIEEE, MHRD, Annual report of ICAI, Maharashtra Directorate Of Medical Education and Research

1,325,936

1,061,566

769,929

1,065,100

468,240

282,096

135,617

574,259

120,195

100,151

80,077

0 400,000 800,000 1,200,000

MSB Higher Secondary

CBSE Xth

CBSE XIIth

AIEEE

IIT JEE 2011

Com Ent Exams, Mah.

All India Pre Med/Pre-Dental Test …

CA CPT

CA PCC

CA IPCC

CA Final

Comfortably positioned in the industry

16

India - Bifurcation of Avg. Annual Education Exp. per reporting student

Private

Coaching28%

Tution

Fee

32%Transport

17%

Books/

Stationery8%

Uniform6%

Exam

fees/ payments

6%

Others

3%

Private

Coaching

37%

Tution

Fee

29%

Transport

15%

Books/ Stationery

7%

Uniform5%

Exam

fees/

payments4%

Others

3%

Maharashtra - Bifurcation of Avg. Annual Education Exp. Per reporting student

Maharashtra Coaching market size and growth

Highly competitive organized market to stabilize price

High cost of operation (especially real estate)

Rising CET enrolments

Highest share of B.Com & CA enrolments

Highest penetration of organized coaching

3,2814,085

5,096

2010-11P 2012-13P 2014-15P

Largely private tution based coaching market

Low base of CA (commerce) market

Rising CET enrolments

Science stream dominated market

Increasing higher secondary enrolments

1,0671,375

1,773

2010-11P 2012-13P 2014-15P

Karnataka Coaching market size and growth

(Rs. Crs.)

(Rs. Crs.)

Source: CRISIL

Q1 FINANCIALS – STANDALONE AND CONSOLIDATED

18

Particulars

For the quarter ended 30th June,

2012

For year ended 31st March, 2012

For the quarter ended 30th June,

2012

For year ended 31st March, 2012

Standalone Consolidated

Fee Income 3,470.19 12,491.11 3,552.54 12,715.34

Other Operating Income 147.25 341.09 138.19 342.01

Total Revenue 3,617.44 12,832.20 3,690.73 13,057.35

Direct Costs 2,100.95 6,756.15 2,145.07 6,977.15

Personnel Costs 523.34 1,760.71 538.78 1,798.68

SD&A Costs 565.14 1,934.05 573.75 1,971.13

EBIDTA 428.01 2,381.29 433.13 2,310.39

Finance Costs 0.32 4.79 0.32 4.79

Depreciation 208.39 763.81 214.08 781.63

Other Income 139.36 404.49 135.19 396.75

PBT 358.66 2,017.18 353.92 1920.72

Income Tax 106.10 640.45 106.10 636.73

PAT (Before Minority Int.) 252.56 1,376.74 247.82 1,284.00

Minority Interest - - 0.15 (39.19)

PAT 252.56 1,376.74 247.67 1,323.19

` in Lakhs

Seasonality of Business

19

Strong seasonality in Revenues and Margins due to diverse product offerings across quarters

Q1

Q2

Q3

Q4

Apr - Jun

Jul - Sep

Oct - Dec

Jan - Mar

21%-23%

20%-22%

24%-26%

32%-34%

Fees %

Key Contributors to Fee Income

IX, X (PY and CY batches), XII + Test Prep (PY Sci. and Comm. batches)

IX, X (PY and CY batches), XI + Test Prep (CY Sci. and Comm. batches), XII + Test Prep (PY Sci. and Comm. batches)

IX, XI + Test Prep (CY Sci. and Comm. batches), XII + Test Prep (CY Sci. and Comm. batches)

X (CY batches), XII + Test Prep (CY Sci. and Comm. batches), Higher CA

Expenses being more or less fixed in nature are spread evenly across quarters

Accordingly, margins in Q2 and Q3 are significantly higher than Q1 and Q4

* PY Batches represents batches commenced in previous fiscal and completed in current fiscal. CY batches represents batches commenced in current fiscal and completed either in current fiscal or subsequent Fiscal/Fiscals. Large majority of CY batches begin start from Q2 onwards.

20

Key Financial Trends

7,316

8,322

10,551

13,057

3,691

922 1,247

1,902 2,310

433 273 475 812 1,323

248

13% 15%

18% 18%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

FY 09 FY 10 FY 11 FY 12 Q1 FY 13

EBID

TA M

argi

ns

(%)

` in

Lak

hs

Revenue, EBIDTA & PAT

Revenue EBIDTA PAT EBIDTA Margins

Revenue

21% CAGR

EBIDTA

35% CAGR

PAT

68% CAGR

Over the last 4 years..

21

Key Balance Sheet Trends

(1,683)

(2,778) (2,994)

(2,623)

(3,379) (3,263)

(3,807) (3,870)

(4,899) (5,228)

(6,000)

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

- FY 08-09 FY 09-10 FY 10-11 FY 11-12 Q1 FY12-13

` in

Lak

hs

Net Current Assets (Excluding Cash & Cash Equivalents & Investments in Mutual Funds) Advance Fees

8%

12%

18%

25%

11%

17%

28%

35%

0%

10%

20%

30%

40%

FY 08-09 FY 09-10 FY 10-11 FY 11-12

ROE ROCE

Operating at negative working capital Improving Return Ratios

Mangalore PU College Capital Expenditure Update: The total amount spent on the construction of PUC Campus at Mangalore PU College up to 30.06.2012 is `1,676.17 lakhs.

22

Division Wise Revenue - Standalone

Q1 FY 12-13 FY 11-12

Revenue (` in lakhs) 749 3,263

No. of Students Serviced*

7,006 14,524

Centres at period end 41 35

Scie

nce

Q1 FY 12-13 FY 11-12

Revenue (` in lakhs) 696 2,639

No. of Students Serviced*

10,383 20,236

Centres at period end 37 37

Co

mm

erc

e

Q1 FY 12-13 FY 11-12

Revenue (` in lakhs) 1871 6,004

No. of Students Serviced*

21,677 31,774

Centres at period end 104 97

Sch

oo

l

•No. of Students Serviced represents students coached for a course during the period under consideration. While a student is included in the no. of students serviced from the start of the course, the corresponding revenue for that student is accrued evenly over the course duration. Thus, the revenue recognized for the student builds up as the financial year progresses which is reflected by the annual average fee realization per student being higher than the average fee realization for the interim periods. The average fee realization per student serviced for the period under consideration is not comparable with the average fee realization for the full year.

Q1 FY 12-13 FY 11-12

Revenue (` in lakhs) 301 927

Oth

ers

Others consists of income from management fees, Dubai, Govt. Projects, Global Champs & Franchisee Income.

Shareholding Pattern – (As at June 30, 2012)

24

Category No. of Share

Holders

Total No. of Shares

% Share-holding

Promoter & Promoter Group

1 16,956,885 42.88

Mutual Funds / UTI 22 2,017,879 5.10

Foreign Institutional Investors

8 1,731,622 4.38

Bodies Corporate 124 3,365,549 8.51

Individuals (Nominal Capital < ` 1 Lakh)

2437 1,434,697 3.63

Individuals (Nominal Capital > ` 1 Lakh)

71 9,633,143 24.36

Other 122 4,408,097 11.14

43%

4% 5%

28%

9%

11%

Promoter & Promoter Group Companies

FII / FFI

FIs / Banks / MF

Retail Investors

Bodies Corporate

Others

Thank You