Prabhudas Lilladher's research report on Navneet Education
We visited Navneet Education Ltd’s (NELI) manufacturing plant at Khaniwade in Palghar district of Maharashtra. The plant is spread across 6 acres and had ~100 tons of paper inventory. Predominantly, stationary products get manufactured (paper & non-paper) at the plant while some area is dedicated for storage of publication books. In the ensuing discussion post plant visit, NELI revealed it is still awaiting curriculum change announcement schedule for FY25E indicating publishing volumes would continue to remain under pressure.
Outlook
However, we expect stationary business to grow at a CAGR of 12% over FY24E-FY26E led by exports. While there are near term concerns on growth, NELI trades at an attractive valuation of 10x FY26E EPS (adjusting for K-12’s valuation) with a PAT CAGR of 21% over FY23-FY26E. We maintain our estimates and retain BUY on the stock with a SOTP based TP of Rs182.
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