Addictive Learning Technology Ltd Q1 FY2027 Concall Summary

Key Takeaways

• Turnaround quarter, cash is the real story: Q1 FY27 reversed a "really bad" loss-making Q4 FY26, with operating cash flow of ₹4 Cr against PAT of just ₹31 lakh, the gap driven by non-cash amortization from prior years' course and technology investments.
• Distribution engine fixed: Advertising costs returned to prior levels after Ramanuj personally took over ads, tripwire funnel costs fell from ₹1,300 to ₹217, and inside sales crossed ₹3.5 Cr per month with sequential growth for four straight months.
• Competitors are exiting: Two competitors shut down after the company fixed its ads, including a billion-dollar-valuation company that exited legal education. Management attributes this to the software moat built over two years.
• Net cash is the north star: The company added ~₹2.2–2.3 Cr net cash in Q1, hit its ₹2 Cr per month goal in June and July, and is targeting ₹3 Cr per month at ₹10 Cr revenue.
• What to watch next quarter: Whether the ₹2 Cr monthly net cash run-rate holds through September, whether boot camp count actually doubles from 8 to 16 per month, and whether the IIT tie-up agreement gets signed.

Turnaround Mechanics

• What broke Q4 FY26: Advertising costs spiked from October 2022 onward as Meta and Google ad costs rose and algorithms changed, making boot camps unviable. Inside sales revenue crashed from ₹3.5 Cr to ₹2 Cr per month, and leadership exits compounded the damage.
• What fixed it: Ramanuj took over ads full-time by April, replacing a ~20-person ad team with a 4-person team of engineers and media buyers using AI. Paid lead costs returned to prior levels, and free boot camp registration costs dropped from ₹250 to ₹50–77.
• AI-driven ad improvements: A new AI platform serving landing pages in milliseconds improved post-click experience, causing Meta to send cheaper leads. AI-generated ads allow launching 50 ads per day versus a month to build one funnel previously.
• Inside sales rebuilt: Leadership was changed, new cohorts now ramp up and become productive in 2–3 months, and growth is stable and predictable without spikes and crashes. The team is flooded with leads, currently using only ~50% because there aren't enough salespeople or boot camp leaders to handle more.
• Cost structure reset: Overall cash outflow per month dropped from ~₹8 Cr in January to ₹6–6.5 Cr now, even while spending more on advertising, sales and marketing because those channels started working.
• EBITDA dip is transitional: EBITDA percentage declined YoY because management under-invested during the scary January–March period, then reinvested in sales and marketing in Q1. Management says this is not the new normal and the current quarter will look "way better."

Ramanuj Mukherjee: "So basically we had a really bad quarter. We had talked about it in our previous 9th June presentation also that we had a really bad quarter in the last quarter of last financial year and it was a surprise to us and to everyone but we worked very hard and thankfully lot of things we have been planning came together in this quarter and it's doing even better in the current quarter."

Cash Generation & Financial Position

• PAT vs cash flow gap: PAT of ₹31 lakh was depressed by non-cash amortization charges from prior years' investments in courses and technology. Operating cash flow of ₹4 Cr reflects the real current business performance.
• Capex reduction: New build has largely stopped; investing outflow fell to ₹1.9 Cr in Q1 from ₹17.5 Cr in all of FY26, which is why the profit line carries prior build costs while cash flow looks stronger.
• Amortization outlook: The non-cash amortization charge will continue at current level for the next ~3 years, then taper off. Reduced capitalization means it won't keep growing at the same rate.
• Cash in bank: Around ₹9–10 Cr currently, with ~₹2.2–2.3 Cr net cash added in the quarter.
• Next financial goal: Cross ₹10 Cr revenue and keep cash outflow under ₹7 Cr to hit ₹3 Cr net cash per month. Management describes this as achievable with operational improvements in the next six months.
• Cost efficiency gains: Server costs fell from ₹30–40 lakh/month to much lower, and transcription costs fell from ₹17 lakh/month to ₹1,700 because the company got better at those processes.
• IPO cash reclassification: Will seek shareholder approval at the upcoming AGM to reclassify ₹7 Cr+ undeployed IPO cash from acquisitions to other purposes.
• No fundraising needed: Management says cash is not the growth bottleneck, distribution is, and distribution can be financed from internal cash flow. No plan to raise funds in one year.

Siddhant: "I think what we are focusing on very extensively now with a very clear north star metrics of being net cash positive - that is something that we are keeping a very close watch on and everything else depends on that."

Distribution & Sales Engine

• The core bottleneck: Distribution scaling proportionately "has not been working" and remains the central challenge. The company is flooded with leads but can only use ~50% because sales and boot camp capacity lag.
• Sales team scaling lessons: Past mistake was scaling callers from 30 to 80 without adequate management layer, causing chaos. Now management and training bandwidth expand together with headcount.
• Boot camp leader bottleneck: Growth is now constrained by boot camp leader availability. The company is training leaders in-house, with Abhyuday, Nidhi, Sagar and Jasjit named as current good leaders.
• Boot camp growth plan: Currently 8 boot camps per month, targeting 10 next month, with a goal to double the number. Management will not promise revenue doubling again.
• Physical sales expansion: Building physical sales teams in Indore and Gurgaon, replicating past small-scale success. Remote sales works but consistency and motivation are challenges; physical sales floor energy helps.
• Referral portal underutilized: Technology built but not prioritized because management bandwidth is limited.
• Seasonality risk: October–December has been off in some years, but management expects less impact this year because the sales team is much stronger.

Ramanuj: "Our issue always has been that how do we distribute - like our distribution has to scale up proportionately and that has not been working."

AI & Technology Moat

• AI voice trainer: Created an AI voice trainer that does discovery calls, creates a 60-page personal strategy plan based on proprietary content, and provides follow-up coaching.
• AI evaluation: Almost no dependence on human evaluators now; quality and satisfaction rising.
• Self-service support: 25% of support tickets now solved automatically via AI self-service mechanisms in the support hub.
• Job-hunting software: Building AI-driven software for cold outreach, customer segmentation and relationship building, including a tool that creates offers and places them across 70 gig platforms, and a job-post mapping tool that identifies key people to network with for a specific job.
• MailBhejo: Built own email platform to replace external software costing ₹4–5 lakh per month; sent 4.5 lakh emails in last 20 days; includes AI email drafting and AI campaign analysis; being bundled for students' cold email campaigns.
• BootcampOS: Built and testing; automates the entire boot camp process; not live yet.
• Student-facing AI software: Built AI software for lawyers, patent professionals, academics and other audiences; already in students' hands.
• Competitive moat: Management attributes competitor exits to the software stack built over two years, which competitors cannot replicate.

Ramanuj: "This is one big difference like why any of our competitors just can't compete with us because they don't have this kind of softwares which we have invested over the last 2 years and built out."

Products, Partnerships & Expansion

• IIT tie-up: Confirmed just before the call: tie-up with "one of the biggest IITs in the country"; agreement to be signed soon; IIT asking for minimum number of students every year.
• New courses in development: Quantitative finance and algorithmic trading / high-frequency trading / low-latency systems courses being built with IIT faculty, driven by demand from GCCs and finance-sector engineers and data engineers.
• IIT Roorkee tie-up: Working "great"; other IITs are now approaching the company for tie-ups.
• LawSikho recovery: LawSikho grew back "in a big way" because the company restarted law boot camps, law communities are much larger than newer categories, and boot camps became profitable at the ad level.
• Revenue split: Last month's split was 55–45 LawSikho vs Skill Arbitrage; management says 50/50 proportion "can remain" for the overall year but it is not a focus area.
• US university: On hold; if ₹2 Cr net cash per month is sustained through September, plan to resume pursuing US university approval from October–November; pre-approval done, final approval pending. Arizona university approval expected in 1–2 months once application is filed.
• US sales engine: Goal is to restart US sales once the university is up and running with courses approved; expects ₹15–20 Cr cash in bank by then.
• Mainboard listing: Company becomes eligible from January; management has received conflicting advice and hasn't decided; Ramanuj is "more partial towards getting on main board than not."

Ramanuj: "I don't want to do that so that's why I will wait to start that but yeah by then by that time I think we'll have somewhere like 15 - 20 cr of cash in bank so it'll give us that much comfort."

Governance & Shareholding

• Promoter-group stake sale: One person in the promoter group, a former technology head who exited the company a year back, sold shares without notifying the stock exchange or the company. Permission was requested from the company secretary and denied; the company reported it to the stock exchange. Promoters Ramanuj and Abhyuday have not sold.
• Insider buying: Ramanuj personally intends to buy shares when the trading window opens; Abhyuday's father has filed a trading plan to buy more shares; Ramanuj has bought from the open market in the past.
• Buyback: No plans; will consider when ₹40–50 Cr cash is sitting in bank; "right now this is not the time."
• Investor relations: Looking for a very good IR services provider; had three bad experiences previously; will hire very carefully.
• More frequent reporting: Moved to quarterly results; will try to provide more updates going forward.

Ramanuj: "I don't know what is the right thing but the business is heading in the right direction. So we are not in a hurry to decide but from January we'll get eligible and I think it's not bad - probably I am more partial towards getting on main board than not."

Guidance & Commitments

Key Metrics