Navneet’s net profit likely to rise by 131% YoY: Report

According to a recent report published in Money Control, the net profit of Navneet Education is likely to rise by 131% YoY. This shows the company’s dominance on the vast education market in India and its export prowess.

23 May 2018 | By PrintWeek India

According to domestic brokerage firm Motilal Oswal, Navneet Education is likely to see 131% YoY rise in net profit for the quarter ended March 31 to Rs 39 crore. The firm expects revenues to grow by 47% on a YoY basis to Rs 307.4 cr in 4QFY18.

The EBIDTA margin is likely to expand 460 bps on a YoY basis to 17.9% and EBIDTA is likely to grow by 97% YoY to RS 55 crore.

In the last three years, Navneet’s revenues increased from Rs 95,937 lakh in 2014-2015 to 1,09,831 lakh in 2016-2017.

Meanwhile, another research report by Prabhudas Lilladher published in 14 May 2018, recommended accumulate rating on Navneet Education with a target price of Rs 161.

Navneet's Q4FY18 standalone results were marginally below expectations with 1.8% YoY revenue growth and 10.6% YoY earnings contraction in a seasonally lean quarter. However, disappointment came from Indiannica Learning Ltd (ILL) which reported loss of Rs 193.9m for FY18 impacted by operating deleverage, higher employee cost and lower revenue recognition due to change in accounting policy for  sales return to the tune of ~Rs 170m.

However, management is confident of steady double digit growth in publishing aided by syllabus change in key states; better stationery export visibility for FY19 and double digit growth coupled with improved margins with large expansion in titles in ILL.

Founded by the Gala Family, Navneet Education is an educational syllabus-based content provider in print and digital medium, manufacturer of scholastic paper stationery, publisher of general and children books and also has a wide range of Scholastic non-paper stationary products. Over the years, the company has built a strong brand in educational content and Scholastic stationery gaining a leadership position.

Since 1959, Navneet has been a major force in the dissemination of knowledge as since then it has published more than 5,000 titles in English, Gujarati, Hindi, Marathi, Tamil, Urdu and other Indian and Foreign Languages, making it one of the most dominant players in the field of publishing.

The company has a dominant market share of about 65% in Western India. And, with a new range of supplementary books for students of CBSE and ICSE Boards, its educational products are now available across India.

In 1993, the company saw promise in the export of stationery products, for which it now has state-of-art manufacturing facilities in Virar, Guma, Dantali and Silvassa. In the same year Navneet launched its paper stationery products for the domestic market. The product range included tight bound note books, long books, hard case bound books and drawing books.

Today, with more than 500 stock keeping units, Navneet is one of the largest paper stationery brands in India. It is also the leader in premiere stationery in markets like USA, Africa, Europe and Middle East.

In 2011, Navneet ventured into direct education/ school management business by acquiring a minority stake in a ‘School Management’ company in Andhra Pradesh. Today, it has 12 CBSE schools by the name Orchids – the International School. Of these, five are in Bengaluru and four in Mumbai and one each in Navi Mumbai, Pune and Hyderabad.

In 2013-14, Navneet launched its first retail digital product ‘UTOP, in Maharashtra and Gujarat. It is available in English, Marathi and Gujarati. It is a complete education solution where students learn via audio-visual content and evaluate themselves through multiple choice questions on every chapter.

In December 2016, Navneet acquired ‘Encyclopaedia Britannica (India)’ which has enabled Navneet to be a pan-India player.