CL Educate Limited

Consumer Defensive — Education & Training Services · NSE

₹57.11+₹2.89 (+5.33%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of CL Educate Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

CL Educate Limited provides education and test preparation training programmes in India and internationally. The company operates through EdTech, MarTech, DEX, and Others segments.

IndustryEducation & Training Services

SectorConsumer Defensive

Employees521

Annual revenue₹529 Cr

How does it make money?

Turns over ₹529 Cr a year. Of every ₹100 of sales, about ₹-5 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 521 employees supports ₹1.02 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.02 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +89% while net margin moved -161% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+89%

Margin effect-161%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 18.4 points over the period

Quality vs. Valuation

Company Quality

44/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

54/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

6.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 12.2% to 15.6% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 8.2% to -10.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.0% to 4.6% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1539% over 3 years, from ₹17 Cr to ₹273 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.5x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹26 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.0x to 0.5x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.2% to 15.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 8.2% to -10.2%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 18% a year✓ 23.7% CAGR
Latest reported year was -12.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 15.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 0.5x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹50 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

4 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 3 neutral · 6 weak

Market Cap

₹310 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.21x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-3.78

Loss-making

Negative earnings per share — the business is losing money

ROE

-10.2%

Weak

Weak capital efficiency

ROCE

4.6%

Weak

Low return on total capital employed

Debt/Equity

1.09x

Moderate

Moderate leverage

Revenue Growth (YoY)

-12.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-129.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹50 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

-4.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.08

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.34

Defensive

Steadier than the market

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

53.8 / 57.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹280 Cr	₹296 Cr	₹338 Cr	₹529 Cr	+23.7%
EBITDA	₹34 Cr	₹44 Cr	₹43 Cr	₹82 Cr	+34.0%
EBITDA Margin	12.2%	15.0%	12.6%	15.6%	—
PAT (Net Profit)	₹23 Cr	₹15 Cr	-₹11 Cr	-₹26 Cr	—
EPS	₹4.08	₹2.89	₹-2.09	₹-4.81	—
ROE	8.2%	5.4%	-4.1%	-10.2%	—
ROCE	7.0%	8.8%	1.2%	4.6%	—
Total Debt	₹17 Cr	₹32 Cr	₹264 Cr	₹273 Cr	+154.0%
Free Cash Flow	-₹4 Cr	₹4 Cr	-₹14 Cr	₹50 Cr	—

🟢 Revenue has grown at 23.7% a year over 3 years.

🟢 EBITDA has grown at 34.0% a year over 3 years.

🟢 EBITDA Margin has risen from 12.2% to 15.6% over 3 years (+3.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹23 Cr to -₹26 Cr.

🔴 EPS has turned negative, from ₹4.08 to ₹-4.81.

🔴 ROE has fallen from 8.2% to -10.2% over 3 years (-18.4 pts).

🔴 ROCE has fallen from 7.0% to 4.6% over 3 years (-2.3 pts).

🔴 Total Debt has grown at 154.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹4 Cr to ₹50 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹898 Cr

Total Liabilities

₹647 Cr

Cash & Equivalents

₹46 Cr

Operating Cash Flow

₹79 Cr

Capex

-₹29 Cr

Shareholding (proxy)

Institutional Holding

4.8%

Insider Holding

65.5%

Corporate Actions

Ex-Dividend Date

22 Nov 2019

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 mixed5 general

It's Down 28% But CL Educate Limited (NSE:CLEDUCATE) Could Be Riskier Than It Looks

Simply Wall Street, 07 Feb

CL Educate Ltd. Share Price Rise Streak After 18.82% Move

Univest, 15 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

CL Educate shareholders approve shifting registered office to Maharashtra

scanx.trade, 16 Jul

CL Educate Upper Circuit Streak: Day 2 Price and Data

Univest, 15 Oct

CL Educate Ltd IPO Status, GMP, Price & Dates Today

Alice Blue, 25 Jun

We Think CL Educate (NSE:CLEDUCATE) Can Stay On Top Of Its Debt

Simply Wall Street, 24 Jan

Watch Items

Revenue growth is negative (-12.5%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

MiddlingFinancial Health · Valuation

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑