Navneet Education - Publishing Performance Under Radar: Prabhudas Lilladher

Prabhudas Lilladher Report

We visited Navneet Education Ltd.’s manufacturing plant at Khaniwade in Palghar district of Maharashtra. The plant is spread across six acres and had ~100 tons of paper inventory.

Predominantly, stationary products get manufactured (paper & non-paper) at the plant while some area is dedicated for storage of publication books.

In the ensuing discussion post plant visit, Navneet Education revealed it is still awaiting curriculum change announcement schedule for FY25E indicating publishing volumes would continue to remain under pressure.

However, we expect stationary business to grow at a compound annual growth rate of 12% over FY24E-FY26E led by exports.

While there are near term concerns on growth, Navneet Education trades at an attractive valuation of 10 times FY26E earnings per share (adjusting for K-12’s valuation) with a profit after tax compound annual growth rate of 21% over FY23-FY26E.

We maintain our estimates and retain Buy on the stock with a SOTP based target price of Rs182.

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