Buy S Chand and Company; target of Rs 312: Prabhudas Lilladher

Prabhudas Lilladher is bullish on S Chand and Company has recommended buy rating on the stock with a target price of Rs 312 in its research report dated August 13, 2024.

Broker Research

August 20, 2024 / 10:25 IST

Buy

Prabhudas Lilladher's research report on S Chand and Company

In a non-seasonal quarter, S Chand & Co’s topline was in line with our estimate, while GM of 72.5% (PLe 71.5%) was aided by a content syndication deal. For FY25E, the management is guiding for double-digit growth in topline with EBITDA margin of 17-19%, backed by price hike, RM stabilization and increased volumes that would come from NCF roll-out. S Chand has started launching new content based on NCF, but the adoption rate has been low as NCERT has announced new syllabus books only for grades 3 & 6 till now.

Outlook

We expect further announcements for additional grades during the year, which is likely to result in higher adoption rate of new syllabus books. Buoyed by NCF, we expect sales/EBITDA CAGR of 15%/22% over FY24-FY26E. We broadly maintain our estimates and retain BUY with a TP of Rs312 (12x FY26E EPS; no change in target multiple).

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