Rationale

 The ratings reaffirmation of MIT World Peace University (MITWPU) factors in the steady expansion in its scale of operations, aided by healthy admission levels in its flagship courses and its strong brand strength. MITWPU also enjoys healthy financial flexibility and operational and financial support with the Maharashtra Academy of Engineering & Educational Research ((MAEER; rated [ICRA]A+ (Stable)) acting as a sponsoring body. ICRA expects MAEER to provide need-based funding support to MITWPU. Being a non-affiliated and self-financed university, MITWPU can decide its own course structure, examination pattern and fee structure, resulting in high operational and financial flexibility. The liquidity position of MITWPU remains adequate, supported by free cash and bank balances and fixed deposits of ~Rs. 91.5 crore as on March 31, 2024. The university’s financial risk profile is also healthy, marked by a low gearing of 0.8 times as on March 31, 2024, and robust debt coverage indicators, with total debt to operating profit before depreciation, interest, tax and amortisation (OPBDITA) and an interest coverage of 1.5 times and 7.8 times, respectively, in FY2024 (as per provisional financials). ICRA expects MITWPU’s financial risk profile to remain healthy in the near-to-medium term, aided by strong admission level, resulting in a rise in scale and improvement in profits, thereby maintaining a comfortable credit profile despite the ongoing capital expenditure (capex) plans of the company. MITWPU has been witnessing healthy occupancy across its key courses, with its flagship courses recording occupancy level of 89-95%, thus lending adequate revenue visibility. The university is, however, exposed to revenue concentration risk, with engineering courses generating about 38% of its total revenues in FY2024 and management courses [undergraduate (UG) and postgraduate (PG)] accounting for about 35%. Besides, the ability of the university to attract high quality students, given the intense competition from other reputed public and private institutes in the country, while maintaining the quality of its teaching staff remains essential. The rating also considers the inherent risk associated with the highly regulated education sector. The university, like other entities in the education sector, also remains exposed to the risk of cash flow mismatches, given the irregular nature of generating revenues. The Stable outlook on the long-term rating reflects ICRA’s opinion that the university will maintain a steady operational as well as financial risk profile, aided by healthy enrolments across key courses.