"Zee Telefilms plans to scale down the education business of Zee Interactive Learning Systems (ZILS) to stem losses. The education business, which is going through a downturn, has dragged the flagship’s profitability.
"According to sources, the company is exploring the possibility of either hiving off its education business or selling it off, either to an interested buyer or by liquidating the assets.
"During the second quarter ended September 2002, the education business recorded a decline of 70 per cent in topline, over the same quarter of last year, to Rs 3.3 crore. Analysts are further expecting a shrinkage of 30-35 per cent in Zee Telefims’ revenues in the next couple of quarters.
"ZILS had posted a loss of Rs 8.79 crore in its earnings before interest and tax in the second quarter of the current year. Further, it is understood from analysts that the management has asserted the loss of the education business for the full year ending March 2003 would be contained at the first half level of Rs 12.1 crore or less.
"Zee Telefilms expects to achieve this by focusing only on student-based revenue streams and moving out of corporate training and e-learning segments. The fierce cost cutting undertaken by the management in this business would ensure that the losses do not mount from here onwards.
"It was only in February 2002 that ZILS had plans to have around 400 ZedCA centres by the end of this year with around 800 ground centres in the next three years.
"Until then, ZILS had 350 centres. ZILS had also bagged an order from a UK-based education company for e-learning solutions for deployment on a global basis.