­­Established track record of operations and experienced management
Incorporated in 1998, JSPM is founded by Prof. Tanaji Jaywant Sawant and Mr. Shivaji Sawant (President) who have more than two decades of experience in the education sector. The trust provides over 13 courses ranging from Pre-primary to technical courses like MBA, MCA Engineering, Pharmacy among others and has a total of 51 institutes at its four campuses in Pune. JSPM has developed a healthy track record of operations reflected by its stable operating income over the years. Total operating income of the trust stood at Rs.271.20 crore in FY23 as against Rs. 265.78 crore in FY22. Further the revenues stood at Rs.280.25 crore in 9MFY24. The occupancy levels have remained healthy at 94.89 percent for H1FY24 as against 72.80 percent in FY23. Acuité believes that JSPM will maintain a stable business risk profile based on the promoters vast experience and the trust established track record of operations.

Moderate financial risk profile
The Corpus fund of the trust stood at Rs. 335.99 crores as on 31st March 2023 as against Rs. 297.82 crore as on 31st March 2022. The increase in the fund is on account if accretion surplus to the fund. The gearing level stood at 0.56 times as on March 31, 2023. The total debt consists of Rs.189.77 crore consists of long-term debt of Rs.109.86 crore, unsecured loans of Rs.0.50 crore and short-term debt of Rs.35.13 crore as on March 31, 2023. JSPM has added a term loan in FY23 for the capital expenditure undertaken for the university. The interest coverage ratio stood at 3.29 times in FY23 as against 4.18 times in FY22. The DSCR stood at 1.50 times in FY23 as against 1.40 times in FY22. Acuité believes that the company is likely to maintain a moderate financial risk profile in the medium term.

Working capital intensive operations
JSPM’s operations are working capital intensive marked by GCA days of 409 days for FY23 as against 356 days for FY22. The high GCA days are driven by high debtors days. The debtor days stood at 279 days for FY23 as against 310 days for FY22. JSPM has a student mix of both open category students as well as backward category students. JSPM is a charitable trust and majority of the fee income of the students are received in the form of government subsidy. The late receipt of the government grant leads to the high receivable days. The average utilisation of bank limits stood high at 96 percent in last 6 months ended January 2024. Acuité believes that the ability of the company to improve its working capital operations will remain key sensitivity medium term.

Dependence on scholarships; stringent regulatory framework
A majority of the admissions in the institute are based on scholarships from the government which results in delays in revenue recognition. The institutes face intense competition from other private institutions offering similar courses. Given the competition, the ability of the institutes to attract requisite students in tune with its sanctioned intake would be a challenge. The Indian education industry is highly regulated and consequently subject to the stringent regulatory framework, which is to be followed by trust operated institutes. Any major change in regulatory framework by Government of India or change in policy by various affiliated boards will have major impact on the revenue, financial and operating performance of the trust.