PL First Cut – Navneet Education Ltd | 3QFY24 F | Lower than expected publishing revenue leads to disappointing results

*PL First Cut – Jinesh Joshi – Research Analyst, Prabhudas Lilladher Pvt Ltd*

Navneet Education Ltd | 3QFY24 First Cut |Lower than expected publishing revenue leads to disappointing results | BUY | TP 206|

✳️Consolidated revenues declined 2.1% YoY to Rs2,588mn (PLe of Rs2,967mn). Publishing sales decreased 5.2% YoY to Rs844mn (PLe Rs1,114mn) while stationery sales increased 0.2% YoY to Rs1,733mn (PLe Rs1,850mn).

✳️Gross profit decreased 3.7% YoY to Rs1,291mn with GM of 49.9% (PLe of 52.0%) due to lower than expected revenues, as compared GM of 50.7% in 3QFY23.

✳️Consolidated EBITDA decreased by 60.9% to Rs40mn (PLe of Rs270mn) with a margin of 1.6% (PLe 9.1%) as compared to an EBITDA of Rs103mn with a margin of 3.9% in 3QFY23.

✳️Consolidated net loss stood at Rs225mn (PLeRs114mn) as compared to a consolidated net profit of Rs307mn in 3QFY23.

✳️The stock currently trades at 14.1x and 12.5x our FY24E and FY25E EPS estimates. We have a BUY rating on the stock with a TP of Rs206.