Navneet Education has been given a 'HOLD' rating by Prabhudas Lilladher, with a target price of Rs 139. The firm has revised its earnings per share (EPS) estimates downward for FY25E, FY26E, and FY27E, citing challenges in the publishing division and increased competition in the domestic stationery market.
The publishing division is facing growth hurdles, worsened by the rising popularity of second-hand books. A curriculum change is expected for approximately 15 subjects in Gujarat for FY26E, but the material volume increase is likely to occur only after higher grades experience syllabus updates. The domestic stationery market is experiencing declining average selling prices (ASP), indicating increased competitive pressure, while slow channel inventory turnover reflects a weak demand environment.
Navneet Education reported a 5% revenue miss and reached a break-even at the operating level, primarily due to struggles in its publishing and stationery segments amid declining realizations. Prabhudas Lilladher projects a sales and profit after tax (PAT) compound annual growth rate (CAGR) of 11% and 18%, respectively, from FY25E to FY27E.