ICICI Direct is bullish on Navneet Education has recommended buy rating on the stock with a target price of Rs 130 in its research report dated May 21, 2019.
ICICI Direct's research report on Navneet Education
Navneet reported healthy revenue growth in a seasonally weak quarter for the publications segment. Overall revenues grew 15.5% YoY to Rs 245.5 crore. On segmental front, revenues from publishing segment grew 14.4% YoY to Rs 62.2 crore while revenue from the stationery segment increased 16.0% YoY to Rs 182.9 crore. Growth in the publication segment was driven by higher sales of ’21 most likely questions’ owing to syllabus change in Maharashtra for X standard. EBITDA margins improved marginally by 30 bps YoY to 11.5% on lower raw material expenses (down 80 bps YoY). Higher finance cost (up 145.9% YoY, owing to increase in inventory on anticipation of spike in paper prices) impacted PAT (down 2.3% YoY to Rs 14.7 crore).
We maintain our BUY rating on the stock with a target price of Rs 130, valuing at a multiple of 14.0x FY21E EPS.
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