Spoke to someone in the Karnataka market. MT’s strategy on partnering with PUC’s is certainly interesting.
-Minimal Capital investment in the PUC model. Investment limited to some infrastrucutre related issues such as AC’s /Desks etc. Maximum investment is ~ 20-25 Lakhs/centre
-PUC Model is successful if both MT & the other partner has a long term view. Maintaining a JV (partnership) is a difficult proposition. One is actually managing egos so it can break down. So far no MT has not had anyone walking out of the partnership
-Typically MT goes after not so well doing campuses and then tries to turn them around. Here the biggest factor is good results. The key factor are results. At the moment Karnataka has 18-19 locations, of this 70-75% are doing well
-Sold the Managalore PUC college as it wasn’t doing well. Didn’t break even after 5 years so sold it off to recover investments. Sold it at no profit no loss.
-PUC model is more profitable than the normal model that MT follows. Slowly others are getting into PUC model as well, given its attractiveness. FIITJEE is coming in Bangalore but they are focusing on IIT. MT is focusing more on state boards at the moment
-Most of the PUC players are small and don’t have any plans of scaling up as such. As such there are not many organized players. There are 3-4 bigger players (Sri Chaitanya, Nalanda, Narayana & Deeksha) but none of them is doing well. Deeksha is winding up. MT has been expanding in the last 2 years. Plans to reach 30 tie-ups in the next 2 years. More than 70% of MT’s partnerships are doing well.
-MT doesn’t advertise a teacher or set of teachers. Other small PUCs focus on that. MT’s pitch is more about technology and its scale that it has achieved in other geographies
-Having established its first college in Mangalore- MT has a good brand recall across Karnataka. Mangalore is an education hub in K’taka.
-Karnataka has ~ 5000 students and the geography is profitable. Contributing 10-15% of revenues.
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