IN THE EYE OF THE STORM

With losses widening, edtech major BYJU'S is shifting its focus to profitability from growth at any cost 

- BINU PAUL

INVITING A STORM of criticism and even rebuke from the government due to a delay in reporting its results, India’s most-valuable unlisted start-up, BYJU’S, finally declared its audited results for FY21 after an 18-month delay, on September 14, 2022. What followed was an eventful week of scrutiny of its financials and corporate governance practices.

BYJU’S parent, Think Learn Pvt. Ltd, saw its consolidated losses widen by nearly 20 times to 4,588.75 crore in FY21 from 231.69 crore in FY20. Revenues from operations grew marginally to 2,280.26 crore in FY21 from 2,189 crore in FY20. The firm attributed the subdued growth to a change in the way it recognises revenue, as advised by its audit firm Deloitte Haskins Sells. Earlier, it used to recognise total revenues of streaming services at the beginning of multi-year subscriptions, which is now being booked over the period of consumption. Also, it now accounts for payment of instalments for loans availed by its customers after they have been made. As per the auditor’s note, these changes prevented the company from booking 1,156 crore of deferred payment) as revenue in FY21. BYJU’S came under criticism following revelations of its unusual accounting practices, with some experts saying that it reflects their lackadaisical commitment to strong governance standards.

“The reason there is a governance gap is because companies define their own metrics, which makes it difficult for stakeholders to determine how well the company is doing. Financial metrics should help the stakeholders do an apple-to-apple comparison. BYJU’S needs to show that it is serious about corporate governance,” says Shriram Subramanian, Founder MD of InGovern Research Services.