UBS analysts led by Tim Plumbe said the decision was likely to pull annual net profit after tax and amortisation down by 14 per cent, leaving a $27 million hole in earnings.
IDP told the ASX that the Canadian agency Immigration, Refugees and Citizenship Canada had outlined on May 27 it would begin accepting results from four rival tests for students on their English language proficiency assessment from August 10. The tests are for prospective students from 14 countries including China, Brazil, Morocco, India, Pakistan and Vietnam, seeking a student visa.
UBS said when a similar opening up of language testing occurred in the United Kingdom, it caused a 10 per cent loss in market share for IDP.
Mr Plumbe estimated that about 75 per cent of applications from Indian students for visas are via the Student Direct Scheme, which had previously only accepted the International English Language Testing System operated by IDP.
