With the rapid development of urban and rural areas along with foreign investment in the economy, there is a rising need for skilled labour, which can only be fulfilled with quality education and training. To fill the gaps in educational infrastructure, the government is consistently funding initiatives to eradicate illiteracy and provide every child access to primary education. The elevated economic trajectory and a dominant demographic of young citizens have led to the birth of several education-based organisations contributing to academic transformations of scale. In a natural order of progression, these businesses have carved a space for themselves in the capital market with education stocks.
Also read: How to invest in US Stocks from India
What are education stocks?
Education stocks represent equities of companies operating within the education sector. These entities encompass a diverse range of businesses, from traditional for-profit colleges and universities to innovative online learning platforms and supplementary tutoring services. Additionally, the sector includes providers of educational content and materials.
Future of education stocks
The education industry is undergoing a period of substantial transformation, driven by several key factors:
- Emergence of EdTech: Educational technology is revolutionising accessibility and personalisation in learning. Online learning platforms and adaptive learning solutions are gaining significant traction.
- Growing demand for skill development: The contemporary job market increasingly prioritises specialised skill sets. Consequently, education companies offering vocational training and skill development programs are well-positioned for growth.
- Globalisation of education: The internet has facilitated cross-border access to education, creating new opportunities for companies providing online courses and programs.
These industry trends collectively indicate a promising outlook for education sector equities. Global projections for the online education market are substantial, with estimates indicating a valuation of $257.7 billion by 2028.
Points to remember before investing in education stocks in India
Before riding the wave of popularity surrounding education stocks, you must verify the following aspects.
1. Financial health
It is important that you evaluate the company’s fiscal standing before making any pledges. Double-check its revenue streams, profits, and debt to gain a comprehensive understanding of its performance. Also, draw data about its past investment returns and understand whether those numbers align with your expectations.
2. Trends
Trends can cause upheavals in the market without any notice. Therefore, always stay apprised about the current happenings in the education sector. This could include emerging learning practices, news or government announcements, and even marketing campaigns. Assess how the companies you plan to invest in leverage these ongoing trends to amplify their brand.
3. Regulations
The education sector is largely impacted by state and national protocols. Any changes in regulatory ecosystems can swiftly affect the operational processes of an educational business and, thereby, its profits. So, stay updated with the current government policies around education and confirm if the concerned enterprises are complying with them before investing.
4. Technology
When the pandemic hit, numerous educational institutions were in for a rude shock because the technological infrastructure for online learning was somewhat run-of-the-mill. However, now, most education companies are in a better position to integrate technology solutions that facilitate improved remote learning outcomes with advanced tools for assessments and teacher-student collaborations.
5. Competition
When you are investing in education stocks, take a minute to check how they fare in terms of the products and services, tie-ups with companies, international partnerships, technology, and customer feedback.
List of top education stocks to buy
Here is a list of some of the most popular companies offering education stocks you can consider investing in. However, please note that these may not be suitable for all investors. It is recommended that you seek advice from independent financial advisors before starting your investment journey.
1. Zee Learn
Besides its Kidzee pre-schools and schools, Zee Learn has amplified its product offerings with digital education, along with construction and leasing specifically for academic purposes. The company also has a manpower and training division that oversees consultancy services for hiring concerns.
2. NIIT
Founded in 1981 to meet the burgeoning demands of the IT industry, NIIT Group is a prominent Indian IT services corporation specialising in skill development solutions. The company caters to a diverse clientele encompassing individuals, enterprises, and academic institutions.
With a global footprint spanning over 30 countries, NIIT Group delivers cutting-edge learning solutions. The organization comprises NIIT Limited (NIIT) and NIIT Learning Systems Limited (NIIT MTS), which offer a comprehensive suite of learning and career advancement programs with a particular emphasis on the technology and banking domains.
3. Veranda Learning Solutions
Founded in 2018, Veranda Learning Solutions delivers comprehensive learning solutions across online, hybrid, and offline platforms. Our curriculum is meticulously designed to cater to a diverse clientele, encompassing students, graduates, and corporate professionals.
We specialise in preparing learners for a wide range of competitive examinations, including those conducted by insurance, railway, banking, and State Public Service Commission boards, as well as for the IAS and CA qualifications. Additionally, we offer specialised programs for individuals seeking to enhance their skills or acquire new competencies.
4. Aptech
Aptech Limited, an Indian vocational training organisation, specialises in delivering comprehensive training solutions across diverse sectors including information technology, media, retail, aviation, beauty, banking, and early childhood education. The company caters to a broad client base encompassing students, professionals, academic institutions, and corporate entities.
Aptech's operations are primarily structured into two divisions: Individual Training and Enterprise Business Group. The Individual Training division offers career-oriented and professional development programs through esteemed brands such as Lakme Academy Powered by Aptech, Maya Academy of Advanced Creativity, Aptech Aviation Academy, Aptech Learning, Arena Animation, and Aptech International Preschool.
5. MT Educare
A big name in the student coaching ecosystem, MT Educare has been helping students prepare for their board examinations and competitive assessments for more than three decades. The company’s exhaustive learning resources and adaptive instruction methods make it a popular pick for many students.
6. CL Educate
Helmed by a team of graduates from renowned institutes like IIT and IIM, CL Educate has four major segments—test preparation, consumer publishing, enterprise institutional, and enterprise corporate. It has around 200 test-prep centres across 100 Indian cities and has also expanded to the UAE. Their test preparation arm caters to all kinds of students, including those who want to crack engineering, medical, civil services, GRE/GMAT or banking exams.
7. Career Point Limited
Founded in 1993, Career Point Limited is a prominent Indian education conglomerate renowned for its commitment to academic excellence. The company provides a comprehensive range of educational products and services, catering to learners across all stages of education, from early childhood to doctoral studies.
Career Point operates within both regulated and non-regulated educational sectors, encompassing preschool, K-12 schooling, test preparation, higher education, online learning, and vocational training. The company's operational structure is divided into three core divisions: Education & Related Activities, Financing, and Infrastructure
8. Global Education Limited
Incorporated in 2011 with headquarters in Mumbai and a branch in Nagpur, Global Education Limited operates within two primary segments: Educational Business Support Activities and Educational Training and Development Activities.
The company offers a diverse portfolio of services encompassing skill development programs under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), publication and distribution of NCERT textbooks, medical simulation training, training programs, online examination administration, power training, digital solutions, facility management, and placement services.
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Should you invest in education sector stocks?
Several compelling reasons underpin the attractiveness of education sector stocks:
- Consistent growth trajectory: The burgeoning global population, coupled with increasing emphasis on skill development and lifelong learning, drives sustained demand for educational services.
- Relative economic stability: Historical data suggests that the education sector exhibits a degree of stability during economic contractions, making it a potentially defensive investment option.
- Societal impact: Investing in education aligns with the desire of many investors to contribute to positive social change
Conclusion
Investing in education stocks in India can diversify your portfolio, simultaneously enabling you to be a part of the academic revolution that is transforming the Indian scholastic landscape. However, like any other investment, the education sector is also susceptible to external factors like policies and market trends. Before you take any major investment call, don’t forget to do your research. You can hire a financial advisor who could guide you through the specifics of education stocks in India so that you can choose wisely.
