07 — Unit Economics
Per-Student Economics: Cloud & AI Track (4 months)
| Item | Amount (Rs) | Notes |
|---|---|---|
| Revenue | ||
| Student fee (blended average) | 80,000–1,20,000 | Mix of upfront, EMI, ISA |
| Employer fee (per successful placement) | 15,000–30,000 | 8.33% of annual CTC typical |
| Government subsidy (PMKVY/state scheme) | 15,000–25,000 | Realized amount after compliance costs and tranche delays; PMKVY 4.0 base rates are Rs 28,900–40,400 but actual realization is lower due to certification requirements and payment timing |
| Total Revenue per student | 1,05,000–1,70,000 | |
| Costs | ||
| Trainer cost (allocated) | 8,000–12,000 | 1:30 ratio, 4 months |
| Facility cost (allocated) | 5,000–8,000 | Rent + utilities, per student |
| Content & tech (allocated) | 3,000–5,000 | Platform, AI, cloud labs |
| Cloud lab credits (AWS/Azure) | 2,000–4,000 | Per student sandbox |
| Certification exam fee | 3,000–5,000 | AWS CCP / AZ-900 |
| Placement cost (allocated) | 4,000–6,000 | Team + activities |
| Student acquisition (CAC) | 5,000–10,000 | Marketing + counseling |
| Admin & overhead (allocated) | 5,000–8,000 | Central team, compliance |
| Total Cost per student | 35,000–58,000 | |
| Contribution Margin | 47,000–1,12,000 | |
| Margin % | 45–66% |
Per-Student Economics: Allied Healthcare Track (8 months)
| Item | Amount (Rs) | Notes |
|---|---|---|
| Revenue | ||
| Student fee | 60,000–1,00,000 | Lower price point for this segment |
| Employer fee | 8,000–15,000 | Healthcare employer fees are lower |
| Government subsidy | 15,000–25,000 | Healthcare skilling is priority sector |
| Total Revenue | 83,000–1,40,000 | |
| Costs | ||
| Trainer cost | 12,000–18,000 | 8-month program |
| Facility + equipment | 8,000–12,000 | Specialized lab equipment |
| Clinical practicum coordination | 5,000–8,000 | Hospital tie-ups, supervision |
| Content & tech | 3,000–5,000 | |
| Placement cost | 4,000–6,000 | |
| Student acquisition | 4,000–8,000 | CAC lower (word of mouth stronger) |
| Admin & overhead | 6,000–10,000 | Longer duration = higher allocation |
| Total Cost | 42,000–67,000 | |
| Contribution Margin | 41,000–73,000 | |
| Margin % | 42–55% |
Per-Center Economics: City Hub
| Metric | Conservative | Base Case | Optimistic |
|---|---|---|---|
| Students per year | 150 | 250 | 400 |
| Avg revenue per student | Rs 1,00,000 | Rs 1,20,000 | Rs 1,40,000 |
| Annual Revenue | Rs 1.5 Cr | Rs 3.0 Cr | Rs 5.6 Cr |
| Annual fixed costs (rent, staff, infra) | Rs 1.2 Cr | Rs 1.2 Cr | Rs 1.5 Cr |
| Variable costs per student | Rs 25,000 | Rs 25,000 | Rs 25,000 |
| Total variable costs | Rs 37.5L | Rs 62.5L | Rs 1.0 Cr |
| Total Costs | Rs 1.58 Cr | Rs 1.83 Cr | Rs 2.5 Cr |
| EBITDA | Rs -8L | Rs 1.17 Cr | Rs 3.1 Cr |
| EBITDA Margin | -5% | 39% | 55% |
Break-even: ~160 students/year at Rs 1L avg revenue = Rs 1.6 Cr revenue vs Rs 1.5 Cr costs. Break-even timeline: Month 12–18 (need 2–3 cohort cycles to reach steady state).
Key Assumptions
| Assumption | Value | Sensitivity |
|---|---|---|
| Placement rate | 75% | If drops to 60%, employer revenue falls 20%, student demand drops 30% next cohort |
| Student fee realization | 85% of listed price | ISA defaults, EMI delays, scholarships |
| Dropout rate | 15% | Revenue lost on dropouts; partially offset by non-refundable deposits |
| Govt subsidy realization | 50% of eligible amount | Govt payments are delayed 6–12 months; do not depend on for cash flow |
| Trainer utilization | 80% | 20% allocated to prep, training, admin |
| Batch fill rate | 85% | 30-seat classroom avg fills 25–26 seats |
Sensitivity Analysis
| Scenario | EBITDA Impact (vs Base) |
|---|---|
| Placement rate drops to 60% | -35% (fewer employer fees + reputation damage) |
| Avg fee drops 20% | -25% |
| Dropout rate increases to 25% | -18% |
| Rent increases 30% | -8% |
| Trainer costs increase 20% | -6% |
| Govt subsidy = 0 | -12% |
Biggest risk: Placement rate. Everything flows from outcomes.
Comparison with Existing Models
| Model | Fee | Duration | Placement | Margin | Our Advantage |
|---|---|---|---|---|---|
| NIIT (traditional) | Rs 2–4L | 12–24 mo | 50–60% | 30–40% | Shorter, cheaper, higher placement |
| Coaching centers | Rs 30–80K | 3–6 mo | <20% | 40–60% | Vastly better outcomes |
| Govt ITI | Free–Rs 10K | 12–24 mo | <30% | N/A (subsidized) | Faster, relevant skills, actual placement |
| Bootcamps (Masai, Newton) | Rs 0–3L (ISA) | 6–9 mo | 60–80% | 20–35% | Broader reach (Tier 2/3), multiple verticals |
| Project Disha | Rs 60K–1.5L | 3–8 mo | 75%+ target | 45–65% | Best unit economics + outcomes combination |
Working Capital Reserve
Minimum 6 months operating expenses in reserve before opening any new center. No exceptions. FIITJEE expanded before economics supported the cost base — this is how multi-center operations collapse.
Path to Profitability
| Phase | Centers | Students/yr | Gross Revenue | EBITDA |
|---|---|---|---|---|
| Year 1 | 2 | 300 | Rs 3 Cr | Rs -1.5 Cr (investment phase) |
| Year 2 | 5 | 1,200 | Rs 13–14 Cr (gross) | Rs 1–2 Cr |
| Year 3 | 12 | 4,000 | Rs 48 Cr | Rs 10–15 Cr |
| Year 5 | 30 | 15,000 | Rs 180–195 Cr (gross) | Rs 50–65 Cr |