Allen Career Institute, a name synonymous with India’s test prep ecosystem, has reported a sharp decline in its financial performance for FY25. The company’s net profit plummeted by 70%, falling to ₹41 crore from ₹136 crore the previous year. Revenue also dipped slightly to ₹3,067 crore, down from ₹3,473 crore in FY24. For a company that has long been considered a benchmark in the coaching industry, these numbers are a sobering reminder of how difficult it is to scale in this space.
Founded in 1988 in Kota, Rajasthan, Allen has grown from a modest setup with just eight students to a sprawling empire with over 300 classroom campuses across 70 cities, serving more than 3.5 lakh offline students annually. Its core strength lies in preparing students for engineering (IIT-JEE) and medical (NEET-UG) entrance exams, along with Olympiads and foundation-level programs.
Over the past two years, Allen has pursued an aggressive expansion strategy. It opened over 100 new self-operated centres, including in Tier 2 and Tier 3 cities, and significantly ramped up its digital presence through Allen Digital. This pivot was catalyzed by a massive $600 million investment from Bodhi Tree Systems, a joint venture between James Murdoch and Uday Shankar. The funding was aimed at transforming Allen into a hybrid education powerhouse, combining its legacy offline strength with a robust digital offering.
But the financials tell a different story. Scaling a test prep business is not like scaling a tech startup. Physical expansion demands heavy upfront investments in real estate, faculty, and operations. These costs scale linearly, while revenue often lags behind due to the time it takes to build local trust and student enrollment. Allen’s employee costs, marketing spends, and infrastructure investments have ballooned, squeezing margins.
Moreover, the traditional Kota-based coaching model is under pressure. With rising concerns around student well-being and a shift in preferences toward hybrid and online learning, Allen has had to diversify geographically and digitally. Today, 75% of its revenue comes from outside Kota, a significant shift from its earlier dependence on the city.
n terms of market positioning, Allen remains a heavyweight. It operates at a scale nearly four times larger than FIITJEE, and significantly ahead of Aakash (owned by Byju’s) and PhysicsWallah in terms of offline reach. However, the competition is intensifying. Aakash is backed by Byju’s deep pockets and digital infrastructure, while PhysicsWallah is aggressively expanding its hybrid model at a lower cost base
Allen’s FY25 results are a wake-up call—not just for itself, but for the entire industry.
Allen’s aggressive growth is not just a strategic choice—it’s also a response to investor expectations. With Bodhi Tree holding a 36% stake, the pressure to deliver scale and returns is real. The company is also reportedly in talks to acquire Unacademy, a move that could further consolidate its position in the edtech space.
Despite the profit plunge, Allen’s fundamentals remain strong. It boasts a net cash position of ₹2,000 crore, and its city-level classroom operations are still profitable. The brand continues to command trust among students and parents, especially in the medical and engineering prep segments.
But the broader lesson here is clear: scaling in test prep is a game of patience, precision, and adaptability. It’s not enough to open more centres or launch an app. Sustainable growth requires a deep understanding of student needs, operational discipline, and the ability to evolve with the times.
Allen’s FY25 results are a wake-up call—not just for itself, but for the entire industry. The test prep sector is undergoing a transformation, and only those who can balance academic excellence with business agility will thrive in the long run.
(data based on web research)