Publication biz to grow beyond 20%: Navneet

Shares of Navneet Publications gained almost 10 percent in the past six to eight trading sessions. The stock was hovering at Rs 55 at the beginning of December and is currently at Rs 62.

President Finance Sunil Gala told CNBC-TV18 attributed no specific reason to the rise seen in stock price, however he said that company's core business- publications is performing well and digital learning is also finding good traction. Publication contributes 60 percent and stationary contributes 40 percent to revenues of the company. Gala is hopeful that publication segment will grow beyond 20 percent and the stationary business wiill see 10-15 percent rise ahead. Below is an edited transcript of Sunil Gala’s interview on CNBC-TV18. Q: Anything that investors need to know from Navneet since the stock has been up? Are you planning any expansions, tie-ups? A: The stock has been performing at the same level since the last one year. Therefore, I would not say that it has risen for some specific reason. Overall, the company is doing quite well and is likely to do better for the next couple of years. Adding to that, our core business - publications is doing well, our digital learning is also finding good traction because market is expecting good numbers from us and we are very hopeful on that. Q: What are those good numbers? You have guided for about 20 percent, are you likely to do better? A: Our publications business may grow beyond 20 percent. Stationary business would grow at around 10-15 percent, but in digital, we are likely to have good traction this year and subsequent years as well.

Q: Focusing on direct education venture, you have 24 percent stake in a company which is involved in the K12 segment. Do you get more aggressive in the direct education space and how exactly is this investment doing? A: As far as investment is concerned, there were a lot of challenges even after we entered. We are fortunate and happy that we have been able to correct most of the challenges. We are seeing good growth coming in particularly in Andhra Pradesh right now.  For our overall focus, we will not invest more money into direct education. We will first vouch for a couple of years, see the results whether that is suitable to us and then we might grow in our core areas too. Q: The syllabus change expected in Maharashtra and Gujarat are quite a driver for you going forward or rather bring in some amount of consistency in terms of publication developments, has that happened? How are these two markets doing? A: Yes, that started last year. As per the plans of government of Gujarat and Maharashtra for next couple of years we hope that syllabus change cycle will continue. That is why we are expecting a decent growth in the publication segment. Q: What exactly are you doing in the digital space, how much money is it bringing and what is the activity? A: As far as Navneet is concerned, our core focus has always been on content. We are not available for big investments. Therefore, we are happy that now even schools, be it private or the state level government schools, all of them are focusing on quality content. Though we took three years to see the reasonable number, now we believe the numbers will come be quite well and are hopeful. We are very excited about the overall acceptance levels for the content. Q: Do you provide digital content to schools?

A: Yes, we do. Q: How much does it contribute in terms of revenues? A: It is a 100 percent subsidiary of Navneet. Last year, it just contributed Rs 10 crore, this year we might do between Rs 15-20 crore. We are expecting some good orders and if we receive them, the numbers might be much higher.