Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Navneet Education Ltd (BOM:508989, Financial) declared an interim dividend of INR 1.50 per equity share, representing 75% of the face value.
- The company's export business showed growth, with revenue reaching 390 crore compared to 358 crore in the same period last year.
- There was a 4% increase in volume in the publication business, despite a reduction in the size of some products.
- The company is planning to expand its product offerings in the domestic market, particularly in non-paper stationery categories.
- Navneet Education Ltd (BOM:508989) is seeing promising inquiries for new product categories in the export market, including those evaluated for anti-dumping duties.
Negative Points
- The publication business experienced a marginal contraction in revenue, with sales at 498 crore compared to 504 crore in the previous year.
- Domestic stationery revenue declined to 173 crore from 189 crore, primarily due to product repricing following a reduction in raw material costs.
- The company faced challenges in domestic sales due to slower-than-anticipated movement of channel inventory in key markets.
- There was a reduction in sales realization in the publication business due to a decrease in the size of books following curriculum changes.
- The digital business incurred losses, although reduced from 30 crore last year to an expected 15 crore this year.
Q & A Highlights
Q: Can you provide some perspective on pricing in the publication and stationery segments, and how do you determine pricing given the low raw material prices?
A: In the publication business, we don't typically reduce prices due to lower raw material costs. However, we had to reduce book sizes due to curriculum changes, which led to a price reduction of about 6%. In stationery, pricing is adjusted based on market dynamics and raw material costs, often through trade discounts. (Respondent: Managing Director)
Q: What is the progress on the CBSE textbook business this year, and how many schools have you approached?
A: We are targeting to reach 11,000 schools this year, up from 8,500 last year. We have received orders from around 4,700 schools and aim to get orders from 6,000 schools. The titles are well accepted, and we expect the fourth quarter to be strong for CBSE business. (Respondent: Managing Director)
Q: How is the digital component of your publication business performing, and what are the current investments or losses?
A: We are not focusing solely on digital business as every book has a digital component. Last year, we incurred a loss of around 30 crore in digital, which may reduce to about 15 crore this year. (Respondent: Managing Director)
Q: What is the outlook for the export stationery business, and how are new product categories performing?
A: The export business is seeing good growth, with new product categories being well received. We expect a strong fourth quarter and continued growth into the next year. (Respondent: Managing Director)
Q: What are the expected margins in the publication and stationery businesses this year compared to last year?
A: Publication margins are expected to be around 30-31%, while stationery margins should be between 12-13%. We anticipate higher margins next year due to lower cost inventory and curriculum changes leading to volume growth. (Respondent: Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
