upGrad Turns Profitable Ahead Of Unacademy Acquisition: Report

Edtech major upGrad turned PAT profitable in the first 11 months of the fiscal year FY26 ahead of its proposed acquisition of Unacademy, ET reported, citing a confidential valuation report filed by the company.

According to the report, upGrad posted a PAT of ₹38 Cr on provisional and unaudited revenue of ₹1,532 Cr during the first 11 months of FY26. The company is expected to close FY26 with revenue of around ₹1,972 Cr and PAT exceeding ₹60 Cr, against a net loss of ₹274 Cr in FY25.

In FY25, upGrad managed to cut its net loss by over 50% to ₹273.7 Cr from ₹559.8 Cr. Its operating revenue rose 6% to ₹1,569.3 Cr from ₹1,487.6 Cr in the year ago period. 

Looking ahead, the company has reportedly projected revenue growth of 30% in FY27, 64% in FY28, 59% in FY29 and 46.5% in FY30.

Its valuation, however, reportedly slipped to $1.7 Bn, a 24% decline from its peak valuation of $2.25 Bn in 2022, ahead of its planned acquisition of Unacademy. Inc42 has reached out to upGrad to get more clarity on the development. The story will be updated based on their response. 

Earlier this month, Inc42 reported that the amalgamation, which is said to be an all-stock deal, would value Unacademy at around ₹2,055 Cr (about $218 Mn). This would be a 90% cut from Unacademy’s peak valuation of $3.4 Bn it achieved during the 2021 funding boom.

The Ronnie Screwvala-owned edtech startup is still seeking the Competition Commission of India’s (CCI’s) nod for the Unacademy acquisition. 

The acquisition, among other such amalgamation deals, are expected to play a major role in the startup’s future expansion. Important to highlight that the Unacademy acquisition itself could add around ₹500 Cr to upGrad’s consolidated revenue.

The startup is also counting on Atlas University, study-abroad programmes, international expansion and new direct-to-consumer initiatives for future growth. Atlas University currently has around 7,500 students, providing a recurring revenue base for the company.

Meanwhile, new initiatives including its D2C business and School of Tech are expected to scale over the next 12-18 months.

The company has projected annual capex at 2-3% of revenue during the forecast period, with spending expected to rise from ₹5 Cr in FY26 to ₹460 Cr by FY31.

The startup is projecting profitability to surge to ₹5,334 Cr by FY31, while EBITDA is estimated to cross ₹7,000 Cr during the same period.

According to the report, the profitability push will be driven by cost controls. Employee expenses are expected to shrink to 19.6% of revenue from a historical average of 51.7%, while sales and administrative costs are projected to fall to 20.3% from 43.5%.

The report said upGrad expects customer acquisition costs to come down through organic growth and partnerships.

It also noted that the company has already trimmed its workforce over the past two years and plans to scale further without major hiring.

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