Buy Navneet Education; target of Rs 100: ICICI Direct
ICICI Direct is bullish on Navneet Education recommended buy rating on the stock with a target price of Rs 100 in its research report dated Jun 02, 2021.
June 10, 2021 / 12:18 PM IST
ICICI Direct's research report on Navneet Education
Navneet Education reported a subdued financial performance in Q4FY21. Revenues de-grew 8% YoY to Rs 191 crore on a low base (Q4FY20: YoY revenue decline of 16%). Gross margins declined 340 bps YoY to 58.2%. Though staff cost (as percentage of sales) grew 212 bps to 18.9%, other expenses declined 533 bps to 23.8%, which enabled the company to restrict the decline in EBITDA margin to 20 bps YoY to 15.9% with absolute EBITDA declining 9% YoY to Rs 30.3 crore. However, a decline in interest cost by 80% YoY to Rs 80 lakh enabled the company to report a flattish PAT of Rs 16.9 crore (Q4FY20: Rs 16.8 crore). For FY21, revenues declined 45% YoY to Rs 835 crore with PAT declining 72% YoY to Rs 56 crore.
The stock is available at reasonable valuations trading at 8.9x FY23E EPS. We reiterate our BUY rating on the stock with a revised TP of Rs 100 (~10.0x FY23E EPS, earlier TP: Rs 95).
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