S Chand's Content Licensing Revenue Shortfall Dents Q1 Profits, But PL Capital Stays Bullish — Here's Why

S Chand's Q1 FY26 Ebitda loss of Rs 91 million surprised, driven by a deferral in high-margin AI content licensing deals. This compares to a profit of Rs 84 million in Q1 FY25 and missed the consensus estimate of a Rs 65 million loss.

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PL Capital Report

S Chand and Co. Ltd. reported weak operating performance with Ebitda loss of Rs 91 million (our estimate loss Rs 65 million) amid fall in high margin content licensing revenue to Rs 30 million in Q1 FY26 (Rs 115 million in Q1 FY25).

Given AI dataset deals are lumpy in nature revenue recuperation is expected in Q2 FY26E. Management reiterated that revenues are likely to surpass Rs 8,000 million with Ebitda margin of ~18-20% in FY26E led by-

1. 6-7% increase in volumes as NCERT is expected to release new syllabus books for grades 4,5,7 and 8 and

2. single digit price hike across product portfolio.

Backed by these factors, we expect sales/PAT CAGR of 11%/21% over FY25E-FY27E. S Chand trades at attractive valuations of 8x/7x our FY26E/FY27E EPS estimates with FCFF yield of ~11%.

We maintain our EPS estimates and retain ‘Buy' with a target price of Rs 286 valuing the stock at 11x FY27E (no change in multiple).

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