Please refer to important disclosures at the end of this report
1
Navneet Education Limited (NEL) founded by the Gala Family is an educational
syllabus based content provider in print & digital medium, manufacturer o
f
scholastic Paper stationery, publisher of general & children books and others.
The publication segment revenue (including Britannica) seems to grow driven b
y
syllabus changes in Gujarat (9
th
&11
th
standard) and Maharashtra (6
th
&10
th
standard) and paper pattern change in Maharashtra for 9
th
and 10
th
standard.
NEL has entered into an agreement to acquire Britannica’s Indian curriculum
business. As per the agreement, Britannica’s Indian curriculum business will
become a subsidiary of NEL. The company will market Britannicas existing India
specific curriculum titles such as ‘Know for Sure’ and ‘The English Channel’ and
also publish text books for CBSE board. 97% of the products under Britannica
are expected to be sold outside Maharashtra & Gujarat which will enable NEL to
diversify its geographical reach as currently majority of the NEL’s publication
revenues are derived from these two states. With the up-tick in rural demand on
the back of better monsoon, change in syllabus and exam paper pattern change
in few sates, government initiative (scholarship programme), PM Modis
campaign of “Beti Bachoa Beti Padhav”, entry in CBSE & ICSE curriculum and
geographical expansion augurs well for NEL to augment its revenue for the next
2–3 years. The Company has reduced debt from `143cr in FY15 to `100cr in
FY16. The company has been maintaining a healthy dividend payout of 41.17%
(Div. Yield: 1.52%). The company has reported a healthy Return on Equity o
f
23% for the last 5 years. Hence Buy.
BUY
CMP `145
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 61.8
MF / Banks / Indian Fls 16.6
FII / NRIs / OCBs 5.0
Indian Public / Others 16.6
Abs. (%) 3m 1yr 3yr
Sensex 8.2 17.6 32.0
Navneet Education 31.8 77.0 157.2
52 Week High / Low 153/80
Avg. Daily Volume 24,757
Education
Market Cap (
`
cr) 3,447
2
BSE Sensex 28,946
Nifty 8,935
Face Value (
`
)
Reuters Code NAVN.BO
0.5
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Navneet Education
Others | Education
March 14, 2017
Navneet Education | Education
March 14, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Navneet Education
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15