After a strong 2023, can CL Educate do well in 2024 as well?

CL Educate’s share price rose 40% in 2023. This was the third year in a row when the share price has done well. Since 1 Jan 2021, the share price has moved from Rs 32 to around Rs 102 at the end of 2023, giving a gain of 3.2x in three years.


Can it continue to beat the markets in 2024? We are IR advisors, not sell side analysts, so this is not a question we can answer. There is one point we would like to make here: The CL stock price is finally close to the price at which the company did its IPO in 2017. See this chart below from Yahoo Finance.

CL Educate listed in March 2017, its IPO was at a price of Rs 500 per share. Adjusted for a split to Rs 5, and then a 1:1 bonus, the equivalent price now is Rs 125. As one can see from the chart, CL listed below its IPO price, and then had a long downslide till 2020. After nearly six years, the share price has crossed Rs 100 per share.

No management likes company shares to trade below IPO price. The management of CL Educate will certainly be working hard to see the share price cross the IPO price in 2024.

A quick check at some of the factors that have driven the uptick since 2021:

  • CL had done a few acquisitions pre and post IPO, and had ended up with an unwieldy structure with too many subsidiaries. CL merged most of them into the parent, allowing the standalone company to accurately reflect the business.
  • While Covid badly affected the Career Launcher classroom business, and the Kestone event business, the management used the disruption to rationalise costs. It also took a decision to take certain write offs that helped to clean its books.
  • Over FY22 and FY23, CL started selling surplus real estate from its erstwhile K-12 and B-school business. As a result, by FY24 the company had reached a net cash position of close to Rs 100 crore.

The market recognised the above actions and rewarded CL with a higher market price. Over the last 3-4 quarters, some PMS firms and HNIs have built good long term positions.

Having cleaned up the books, the management is now strongly focused on delivering growth. The share price henceforth would largely reflect the market’s view on the growth performance of the company.

Leave a Reply

Your email address will not be published. Required fields are marked *