Education share price target

Education companies under our coverage are expected to report a modest 14.6% YoY growth in topline amid rising export headwinds given the ongoing geo-political tensions in West Asia. DOMS IN is likely to report a 17.0% YoY growth in topline led by stationary business. On the other hand, FLAIR IN is expected to report topline growth of 10.6% YoY (lowest in last 5 quarters) led by weak exports. Initial signs of margin pressure is also evident amid rising crude prices as DOMS IN is expected to report an EBITDA margin of 16.3% (down 100bps YoY). Though FLAIR IN's EBITDA margin is expected to increase 140bps YoY; the base was low amid inferior product mix and on...

growth would stem from rising usage of second-hand books and falling realization in the domestic stationery market. On the operating performance front, DOMS IN is likely to witness 210bps compression in EBITDA margin due high-margin syndication revenue, while NELI IN's EBITDA margin is likely to witness a compression of 40bps. Among our coverage universe, DOMS IN...

Additionally, NCERT's announcement of new competency-based textbooks for grades 4, 5, 7, and 8 marks a meaningful expansion in the curriculum upgrade cycle. While the sales season for FY25E will remain unaffected, this remain under pressure amid the growing adoption of second-hand books, although recurring institutional orders may offer a temporary buffer. On the operating performance front, while NELI and S Chand's EBITDA is likely to witness mid-single digit growth, DOMS is likely to witness margin compression due to consolidation of personal hygiene business. Among our coverage...

conversion cycle in education (publishing) industry we interacted with a few large dealers (Bihar/Jharkhand, Mumbai) and visited a lot of retail shops in and around Mumbai. Highly competitive nature of the CBSE/ICSE market coupled with seasonality (75-80% of S Chand's sales occur in 4Q; 50-55% of Navneet's sales occur in 1Q) results in higher receivable days for S Chand than Navneet. Consequently, Navneet has higher inventory days (prestocking happens prior to the start of the academic cycle) at year end than S Chand. We believe that working capital intensity of both the companies is unlikely to improve meaningfully in the near term. We have a BUY on both...