Navneet Education Limited reported a 9% year-on-year decline in revenue for the second quarter of fiscal year 2026, primarily due to challenges in the export stationery segment. However, the company's publication business showed promising growth, signaling a positive trend in the domestic market.

Financial Highlights

• Revenue: INR 246.00 crores (Q2FY26) vs INR 271.00 crores (Q2FY25)
• EBITDA Margin: 4.90% (Q2FY26) vs 7.50% (Q2FY25)

Segment Performance

Key Takeaways

1. Publication Segment Growth: The publication segment grew by 12% to INR 91.00 crores, driven by minor curriculum changes in lower grades. This marks the beginning of a new curriculum change cycle, which is expected to extend to higher grades in the coming years.

2. Export Challenges: The export stationery segment faced significant headwinds, with revenue dropping by 22% due to tariffs imposed by the United States. However, management anticipates improvement once trade conditions normalize.

3. Domestic Stationery Performance: The domestic stationery business remained flat in terms of revenue. While sales volume increased, lower paper prices reduced the realization of finished products.

4. EBITDA Margin Compression: The company's EBITDA margin compressed to 4.90% from 7.50% in the same quarter last year, primarily due to reduced export earnings.

5. Future Outlook: Management expects favorable tariff decisions by the end of December, which could potentially improve the export business. The company is also focusing on product diversification and innovation to mitigate risks.

6. Working Capital Management: Despite challenges, Navneet Education maintained a relatively stable working capital cycle of around 84 to 88 days, demonstrating operational resilience.

7. New Product Initiatives: The company has introduced new writing instruments and other stationery products under its Youva brand, with initial responses better than expected.

8. CBSE Segment: The company's CBSE segment, particularly the 'Rise' series, is gaining traction in Maharashtra and Gujarat, where many SSC English medium schools are converting to CBSE-affiliated schools.

9. Digital Integration: Navneet is increasingly integrating digital components into its products, especially for grades 5 and above, to enhance product attractiveness.

Management Commentary

Gnanesh Sunil Gala, Managing Director of Navneet Education, commented on the results: "We are confident in our strong position for continued expansion and value creation. We remain committed to delivering sustainable growth and maximizing shareholders' value."

He added, "Our publication business continues to perform as a key growth driver, while we navigate temporary headwinds in the stationery segment. We are optimistic about the potential reduction in tariffs, which we expect to create a more favorable business environment for our exports."

Looking Ahead

Navneet Education is positioning itself for growth through various initiatives:

1. Expanding its CBSE segment offerings
2. Introducing new product categories in stationery
3. Integrating technology with publishing
4. Focusing on product diversification and innovation in exports

The company expects the publication segment to show strong growth in the coming years, with potential EBIT margins of around 27-28% in FY27. For the domestic stationery business, management projects an EBIT margin of around 8%.

As Navneet Education navigates through current challenges, particularly in its export business, the company's focus on innovation, diversification, and market expansion strategies may help in maintaining its competitive edge in the education and stationery sectors.

Navneet Education Limited , a leading educational content provider, has projected a potential turnaround in its business for the fiscal year 2027 (FY27). The company expects a 12% year-over-year growth in its publications segment, driven by early curriculum changes.

Publication Segment Growth

The company's optimistic outlook is primarily based on the anticipated revisions in school curricula. Navneet Education foresees a potential multi-year upswing as higher grade revisions commence, which may boost demand for its educational materials.

Strategies to Address U.S. Tariff Impact

To address the challenges posed by U.S. tariffs on exports, Navneet Education is proactively developing new product lines. This strategic move aims to diversify its offerings and potentially mitigate the impact of trade barriers on its export business.

Domestic Stationery Performance

The company reports that domestic stationery volumes remain stable. Navneet Education expects potential margin recovery in this segment as paper prices stabilize, which could improve profitability.

Digital Learning Ecosystem

In line with the evolving educational landscape, Navneet Education is expanding its digital learning ecosystem content. This initiative reflects the company's commitment to adapting to changing educational technologies and student needs.

Financial Performance

According to the latest financial results for the quarter ended September 30, 2025:

(Figures in crores of rupees)

Despite the overall decline in revenue, the publishing content segment showed strong growth, aligning with the company's future projections.

Dividend Announcement

The Board of Directors has declared an interim dividend of Rs. 1.50 per equity share (75%) for the financial year 2025-26, demonstrating confidence in the company's financial position despite current challenges.

Navneet Education's focus on curriculum-driven growth, product diversification, and digital expansion positions it to potentially capitalize on upcoming educational reforms and technological advancements in the sector.