India’s educational institutions are expected to record a steady 11–13 per cent increase in total income over the next two fiscal years, driven by rising enrolments and fee revisions, according to a report by Crisil Ratings.
The report notes that FY26 will mark the fifth consecutive year of double-digit growth for the sector, reflecting higher household spending on education amid improving income levels. While revenues are set to rise, operating margins are projected to remain stable at around 27–28 per cent, as institutions face increased expenditure on staff salaries and related operational costs.
Educational institutions are also expected to step up capital expenditure to expand capacity and improve infrastructure. However, strong internal cash flows are likely to limit dependence on external borrowing, keeping overall credit profiles stable.
An analysis of 107 institutions with a combined income of nearly Rs 26,000 crore indicates that enrolment growth will continue to support expansion plans across segments. The K–12 segment, which accounts for about one-third of sector revenues, is projected to grow by 9–10 per cent, supported by urbanisation, improved affordability, and regular annual fee increases.
Higher education enrolments in arts, science, commerce, and diploma courses are expected to grow moderately at 3–4 per cent. In contrast, engineering and technology-related programmes are likely to see stronger demand, driving higher income growth despite global economic uncertainties and challenges related to overseas job markets.
Crisil Ratings noted that fee increases are largely being driven by higher inflation, particularly in urban areas. At the same time, rising spending on salaries and facilities is expected to prevent any significant improvement in operating margins.
Overall, the report suggests that India’s education sector will maintain healthy growth momentum while preserving financial stability over the medium term.
