Addictive Learning Q2 Profit Falls 21% as Revenue Rises 21%

Addictive Learning Technology Limited reported consolidated profit of Rs 2.29 crore for the quarter ended September 30, 2026, down 21% year on year, despite revenue from operations rising 21% to Rs 25.29 crore. A higher tax charge, alongside increases in other expenses and depreciation, reduced post-tax earnings from Rs 2.88 crore a year earlier.

Why did Addictive Learning's Q2 profit fall despite revenue growth?

Addictive Learning's Q2 profit fell because its tax position changed sharply even though profit before tax increased to Rs 3.04 crore from Rs 2.59 crore in the quarter ended September 30, 2025. Revenue from operations grew to Rs 25.29 crore from Rs 20.96 crore, while total expenses increased to Rs 22.33 crore from Rs 18.83 crore.

The current-tax charge was Rs 81.17 lakh in Q2 FY27, compared with Rs 37.89 lakh in Q2 FY26. Deferred tax was a charge of Rs 6.71 lakh, against a credit of Rs 66.28 lakh a year earlier, resulting in a total tax expense of Rs 87.88 lakh versus a net tax credit of Rs 28.39 lakh.

The September 2025 quarterly comparison was derived by management from its books and accounting records because Addictive Learning had published half-yearly, rather than quarterly, results in the prior financial year. The company voluntarily began publishing quarterly results from FY27, and the June 2026 quarter was subject to limited review.

Which costs changed most in Addictive Learning's Q2 results?

Addictive Learning's other expenses were the largest cost line and increased 24% year on year to Rs 15.70 crore in Q2 FY27 from Rs 12.66 crore. Depreciation and amortisation rose 46% to Rs 4.70 crore from Rs 3.21 crore, while these two categories accounted for Rs 20.40 crore of the Rs 22.33 crore total expenses.

Cost of services declined to Rs 72.60 lakh from Rs 1.67 crore, and employee-benefit expense fell to Rs 1.21 crore from Rs 1.30 crore. The consolidated statement recorded no finance costs, exceptional items or extraordinary items in either the September 2026 or September 2025 quarter.

Sequentially, revenue from operations increased 11% from Rs 22.69 crore in the quarter ended June 30, 2026, to Rs 25.29 crore in the September quarter. Total expenses were broadly unchanged at Rs 22.33 crore against Rs 22.38 crore, and profit after tax increased from Rs 31.26 lakh in the preceding quarter to Rs 2.29 crore.

What do Addictive Learning's half-year results show?

Addictive Learning reported half-year profit after tax of Rs 2.60 crore for the six months ended September 30, 2026, down 38% from Rs 4.16 crore in the corresponding period a year earlier. Revenue from operations nevertheless increased 15% to Rs 47.98 crore from Rs 41.89 crore during the comparable half years.

Profit before tax fell 40% to Rs 3.46 crore from Rs 5.77 crore as total expenses rose 21% to Rs 44.70 crore from Rs 37.08 crore. Other expenses increased to Rs 30.76 crore from Rs 25.34 crore, while depreciation and amortisation rose to Rs 9.15 crore from Rs 6.10 crore.

The group identifies Education Technology, or EdTech, as its sole reportable business segment under Accounting Standard 17. It primarily operates in India, while revenue from export operations and overseas subsidiaries was described as insignificant; no geographical segment met the quantitative threshold for separate disclosure as of September 30, 2026.

How did Addictive Learning's balance sheet and cash flow change?

Addictive Learning ended September 30, 2026 with cash and cash equivalents of Rs 4.76 crore, compared with Rs 1.17 crore at March 31, 2026. Its half-year cash-flow statement showed Rs 9.56 crore of operating cash inflow and Rs 5.97 crore used in investing activities, producing a net cash increase of Rs 3.59 crore.

Total consolidated assets and liabilities were nearly unchanged at Rs 97.88 crore at September 30, 2026, compared with Rs 97.89 crore at March 31, 2026. Trade receivables declined to Rs 45.34 lakh from Rs 85.12 lakh, whereas other current assets increased to Rs 3.49 crore from Rs 1.81 crore.

Intangible assets under development declined to Rs 10.85 crore from Rs 12.93 crore, while reserves and surplus rose to Rs 65.63 crore from Rs 62.71 crore. Trade payables other than those due to micro and small enterprises fell to Rs 2.46 crore from Rs 4.11 crore, and purchases of fixed assets totalled Rs 7.12 crore in the half year.

What did Addictive Learning disclose on IPO proceeds and legal matters?

Addictive Learning had used Rs 50.70 crore of Rs 57.92 crore gross proceeds from its fresh equity issue by September 30, 2026, leaving Rs 7.21 crore unutilised. This balance comprised Rs 2 crore allocated to an identified acquisition and Rs 5.21 crore for working-capital requirements.

Shareholders approved the reallocation of Rs 5 crore originally set aside for unidentified acquisitions and Rs 21.32 lakh from issue expenses to working capital at their September 28, 2026 meeting. Shareholders also approved an extension through FY28 to use the Rs 2 crore balance for the identified acquisition, after Rs 1 crore of its original Rs 3 crore allocation had been used.

The filing also disclosed a legal dispute with a former employee and shareholder. Addictive Learning has claims of Rs 2.28 crore and has received counterclaims of Rs 1.71 crore; management, supported by legal advice, said it expects no material liability and had made no provision as at September 30, 2026.

Conclusion

Addictive Learning's September-quarter revenue growth did not translate into higher net profit, as a 21% increase in revenue to Rs 25.29 crore coincided with a 21% decline in profit after tax to Rs 2.29 crore. The quarter included higher other expenses and depreciation, while the movement from a prior-year deferred-tax credit to a deferred-tax charge increased the tax burden.

The next items to watch are the use of Rs 7.21 crore of remaining IPO proceeds, including the Rs 2 crore identified-acquisition allocation that can be used through FY28, and the final outcome of the legal dispute involving Rs 2.28 crore of claims and Rs 1.71 crore of counterclaims. Addictive Learning's voluntary quarterly reporting from FY27 will also provide additional period-by-period disclosures.