Veranda Learning Solutions Limited , a prominent player in the education sector, has announced a significant change in its auditing structure. The company's material subsidiary, BB Virtuals Private Limited, has undergone a shift in its statutory auditors as part of a broader strategy to align auditing practices across the group.

Key Developments

• Auditor Resignation: SCVJ Associates, the previous statutory auditors of BB Virtuals Private Limited, have tendered their resignation.
• New Appointment: Deloitte Haskins & Sells has been appointed as the new statutory auditor for BB Virtuals Private Limited.
• Strategic Decision: This change is part of Veranda Learning Solutions' initiative to appoint a common statutory auditor across all its material subsidiaries.

Reasons for the Change

The decision to change auditors stems from Veranda Learning Solutions' internal governance framework, which was implemented following the acquisition of BB Publication Private Limited. The company aims to streamline its auditing process by having a unified approach across its material subsidiaries.

Transition Details

Compliance and Disclosure

Veranda Learning Solutions has ensured full compliance with regulatory requirements:

• The resignation and new appointment have been disclosed under Regulation 30 of the SEBI Listing Regulations.
• A detailed resignation letter from SCVJ Associates has been submitted, confirming the completion of their professional obligations.
• The company has provided all necessary information as required by SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

Impact and Outlook

This strategic move by Veranda Learning Solutions is expected to enhance the consistency and efficiency of financial reporting across its group companies. By aligning its auditing practices, the company aims to strengthen its internal controls and provide more uniform financial oversight.

The smooth transition, with SCVJ Associates completing their obligations including the recent limited review, indicates a well-managed change in the company's financial governance structure.

Investors and stakeholders can view this development as a step towards more streamlined financial reporting practices within the Veranda Learning Solutions group.

Veranda Learning Solutions Limited (ISIN: INE0IQ001011) has reported robust financial results for Q2, alongside significant strategic developments that are set to reshape the company's future.

Financial Highlights

The company reported impressive year-on-year growth in Q2:

• Revenue: Rs. 127.00 crores (19% YoY growth)
• EBITDA: Rs. 48.00 crores
• Adjusted PAT: Rs. 23.30 crores (185% YoY growth)

Record Cash Collections and Enrollments

Veranda Learning achieved record cash collections of Rs. 173.00 crores in Q2, compared to Rs. 137.00 crores in the previous quarter. Student enrollments saw a substantial increase from 61,000 to nearly 1 lakh students.

Strategic Restructuring

The company announced three major strategic initiatives:

1. Commerce Division Demerger: The Board has approved the demerger of the Commerce Test Prep vertical into J.K. Shah Commerce Education Limited. This new entity is expected to be debt-free and generate Rs. 350.00 crores in revenue and Rs. 140.00 crores in EBITDA by FY26. Existing shareholders will receive one share of the new entity for every Veranda share held.

2. Vocational Segment Divestment: Veranda has divested its vocational segment to SNVA EduTech Limited in a share-based arrangement, giving Veranda a 50% stake in the global education enterprise.

3. Veranda 2.0 Strategy: The company will now focus on government test prep and academic segments.

Future Outlook

Management has provided guidance for FY26 for the combined entity:

• Revenue: Rs. 650.00 crores
• EBITDA: Rs. 170.00 crores
• PAT: Rs. 70.00 crores

Segment Performance

The company's performance across different segments shows mixed results:

Debt Reduction and Refinancing

Veranda has significantly reduced its debt burden following a recent QIP (Qualified Institutional Placement). The company is in advanced talks with public sector banks to refinance its remaining high-cost debt, which is expected to further improve profitability.

Expansion Plans

The company plans to expand its presence in the education sector through:

• Adding new junior colleges and degree colleges under the Tapasya and J.K. Shah brands
• Expanding BB Virtual, the online arm for coaching classes
• Introducing foreign courses like ACCA, CMA, and CFA across existing centers

These expansions are planned to be executed in an asset-light model, primarily through leased premises and minimal capital expenditure.

Veranda Learning Solutions appears to be at a pivotal point in its growth journey, with strategic restructuring and strong financial performance setting the stage for potential value creation for shareholders in the coming years.