Veranda Learning Q4 FY26: Profitability milestone, demerger momentum, and FY27 growth targets

Veranda Learning Solutions ended FY26 with a key milestone: the company reported its first full-year profit after tax since listing. Revenue from operations rose to 481.5 crore for FY26, up 35 percent year on year, while reported EBITDA jumped to 204.0 crore. Profit after tax for the year was 129.7 crore versus a loss of 251.6 crore in FY25.

The March quarter continued the momentum. Q4FY26 revenue from operations came in at 132.4 crore, up 52 percent year on year. Gross profit increased to 90.1 crore and gross margin improved sequentially to 68 percent from 65 percent in Q3, reflecting operating leverage in the scaled portfolio.

Management positioned FY26 as a year of restructuring under the Veranda 2.0 agenda, supported by debt reduction, portfolio actions, and a sharper strategy for the commerce and non-commerce segments. The company also highlighted progress on the proposed commerce demerger and reiterated FY27 financial guidance.

FY26 financial performance: scale, margins, and a PAT turnaround

The reported numbers show two important shifts. First, revenue growth was accompanied by stronger gross profit. FY26 gross profit rose to 310.5 crore, and the gross margin was shown at 64 percent. Second, finance costs declined materially. Finance cost fell to 63.3 crore in FY26 from 114.6 crore in FY25. On the earnings call, the CFO linked the decline to balance-sheet deleveraging, QIP proceeds, and refinancing into lower-cost debt.

In Q4, EBITDA was 54.5 crore, up 4 percent sequentially, and PAT was 15.7 crore. For the full year, the company also reported 32.2 crore of one-time expenses and an exceptional item of 86.1 crore. Despite these moving parts, the management message was consistent: FY26 was a break from the loss-making profile seen in FY25.

Segment performance: commerce leads Q4, government turns positive on EBITDA

Veranda’s segment data in the presentation highlights a commerce-led quarter. In Q4FY26, Commerce Test Prep revenue rose to 94.2 crore from 57.1 crore in Q4FY25. Government Test Prep revenue increased to 28.6 crore from 21.6 crore, while the Academic segment was broadly stable at 8.2 crore.

The EBITDA split shows a strong jump in Commerce Test Prep profitability in Q4, rising to 52.5 crore from 16.9 crore. Government Test Prep moved to positive EBITDA of 4.0 crore in Q4FY26 from a negative 0.9 crore in the prior-year quarter. The Academic segment EBITDA increased to 7.3 crore from 6.3 crore.

On the call, management addressed a concern on government test prep profitability, noting that Q4 included an impairment impact of about 5 crore as part of audit procedures. The CFO stated that without this one-time effect, the underlying performance would have been positive.

The demerger: timeline clarity and the value unlock argument

The most consequential corporate action in progress is the proposed demerger of the commerce vertical. The presentation lays out a step-by-step sequence: board approval in September 2025, filing with exchanges in September 2025, receipt of exchange NOC in January 2026, filing with NCLT in January 2026, and shareholder approval through a court convened meeting in April 2026. The next NCLT hearing is scheduled for June 3, 2026.

On the earnings call, management provided a practical timeline for investors. The Chairman said the company expects the final NCLT order around 30 days after the June hearing, followed by another couple of weeks for ROC filings and other approvals. Based on this sequence, management expects listing by end of July or by mid-August.

The stated shareholder benefit is a 1:1 share allotment. Every Veranda shareholder is expected to receive one share in the newly listed JK Shah Commerce entity at no additional cost.

Management’s rationale for value unlocking focused on the advantages of a sharply focused business. The Chairman argued that a commerce-exclusive listed entity could better exploit a large opportunity in finance and commerce education and may receive a different valuation profile compared to being embedded within a broader education group. The company also reiterated its long-term aspiration of 1,000 crore plus revenue by FY30 for the commerce business.

FY27 outlook: guidance, expansion plans, and near-term margin trade-offs

Veranda has provided explicit FY27 guidance. The company guided revenue of 670 crore, EBITDA of 260 crore, and PAT of 144 crore. It also provided a segment split for FY27E: commerce revenue 450 crore and non-commerce revenue 220 crore.

Strategically, the FY27 playbook includes multiple expansion initiatives. Government Test Prep is planned to expand into Karnataka, and the presentation highlights an intent to tap KPSC and state-level aspirants with localized content and offline centers. The company also aims to create offline presence in North and West India, naming UP, Bihar, Rajasthan, and Gujarat.

Commerce expansion is set to be a major operating priority. The company plans 15 new offline commerce college locations. Management was also transparent about the trade-off. In response to a question on commerce EBITDA margin expectations, the CFO explained that the initial year operating expenses and setup costs for the new colleges would weigh on margins. Management described the first year as potentially marginally breakeven, with benefits expected over the next two years as the colleges stabilize.

Alongside this, the company outlined additional priorities such as managed school services in pre-KG, expansion of managed K-12 schools, and continued digital-led admissions and marketing efficiency.

Takeaways for investors

FY26 marked a financial inflection for Veranda Learning, with the company reporting its first full-year PAT positive performance since listing. Revenue growth, improved gross margins, and a meaningful reduction in finance costs were central to the turnaround.

The next phase is shaped by execution: completing the commerce demerger within the stated July to mid-August window, scaling new offline expansion in commerce and government test prep, and managing the near-term cost impact of new college launches. With FY27 guidance already on the table, investor focus is likely to remain on delivery against these targets and the pace at which the post-demerger structure translates into sustained, segment-led growth.