Navneet Education Limited (NAVNETEDUL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Navneet Education Limited Q4 and FY26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the lesson only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference to Utam Sir Sunil Gala, Managing Director of Navneet Education Limited. Thank you very much, sir.

Thank you. Good afternoon, ladies and gentlemen. Today, I am pleased to present the financial and strategic performance of your company for the fourth quarter and the full year, FY25-26. During the past year, that is FY25-26, our business has demonstrated remarkable resilience. I will tell you the reason why. We navigated intense regional competition, changing tax landscapes, particularly in our stationery business, and shifting global trade policies due to the recent war that it took, as well as the tariffs imposed in the U.S. So in Q4, in particular, our revenue remains stable. More or less at the same number, 394 versus 389 crore, whereas full-year performance was reduced, I will tell you the reasons also why, to 1683 crore against 1733 crore earlier year. While global micro headwinds caused a 3% contraction in our top-link performance, Our domestic engines achieved better operational momentum. Now, as usual, I will take you all through segmental review. So, first I'll talk about the content business, publication business as you all know it. Our publication division delivered a stable full-year revenue of 719 crore. Looking ahead, we are entering a highly lucrative growth phase between FI27 and FI29. Reasons? Maharashtra and Gujarat, where our strong foothold is there, will implement a sizable curriculum change. Historically, these transition cycles always trigger healthy double-digit growth for our publication business. We are fully prepared to capitalize on this demand, which will boost our operating margins over the next few years. Now, coming to domestic stationery business, which grew, of course, only by 4% in value to 366 crores. Importantly, we have achieved 6% volume growth, which proves that consumer demand for our products remains structurally sound. I will explain you the reason why 6% volume and only 4% in value. So this is the growth was achieved despite downward trend in global paper prices and intense pricing pressure from unorganized regional players. So you would have understood that prices of the raw materials decreased and so as the product pricing also we had to reduce. So, we achieved a little higher volume growth versus the revenue growth. Profitability was also impacted because of two, three reasons. One of them being paper stationery became exempt from GST. So, it prevented us from claiming input tax credit on the inventory that we were holding as on that date. As well as in the initial almost two months of period, at vendor level, there was lots of confusion whether to charge GSU or not, but we had to continue our cycle, and therefore we had to buy paper. Now, to turn these challenges into opportunities, we have two strategies. One is brand mode. So, we have decided to invest heavily in nationwide branding and expanding our management as well as manpower to out and compete the regional players. Additionally, portfolio diversification. We are rapidly scaling up our better margin, non-paper stationery products. As web portfolio and expanding our footprint in digital commerce. While these strategic investments will impact on our domestic margins in a short to medium term, they are absolutely vital to secure long-term market dominance. Coming to the exports business. Now, our export stationary revenue saw a 10% decline, which compressed our divisional EBITDA margin by 3%. Divisional, what I mean is the stationary business EBITDA margin by 3%. This decline was a direct result of tariff challenges in the United States. And to maintain business continuity and protect our market share, we deliberately reduced from our normal pricing till the situation settles. This pressure was partially offset by a favorable exchange rate movement, which gave us a 4% cushion to our reduced pricing. But overall, both on the revenue front as well as on the margin front, we were impacted. I believe we had no option but to just carry on with the business and try to see that we have a long-term relationship continuing with our present customers. Now, today, we have much better clarity on these tariffs. So, we anticipate that our exports revenue will gradually get back on track starting from the current year. In the last couple of quarters, I would have spoken on our capital allocation, particularly the investments in stationery business. Thank you. And on behalf of the company, I feel sorry that the line got disconnected in between. I do not know where I had completed or till what had you heard me. But let me repeat again, for the benefit of everyone, I was talking about segmental performance of the company. So, first I will start with our content business. We all know that as a publication business. So, this year, the period under review, publication division delivered us stable full-year revenue. Looking ahead, we are entering a highly lucrative growth phase between FY27 and FY29, and that too both in Maharashtra and Gujarat, which will implement a sizable curriculum change. Historically, this transition cycle triggered healthy double-digit growth for our publication business. We are fully prepared to capitalize on this demand, which will boost our operating margins over the next few years. Coming to domestic stationery business, the domestic stationery division grew by just 4%. More importantly, we have achieved a volume growth of 6%. This growth was achieved despite a downtrend or downward trend in the paper prices and intense pricing pressure from unorganized regional pairs. Profitability was also impacted because of paper stationery became exempt from GST, preventing us from claiming input tax credit on the inventory we were holding on that day, as well as there was confusion at a vendor level whether to charge GST or not. Anyway, all this is settled now. So, we have devised a couple of strategies to further enhance our brand in the future. So, first, we are going to invest in the brand. So, we will have a nationwide branding and expanding our management stroke manpower to out-compete the regional players. Simultaneously, we are rapidly scaling up our little better margin non-paper-stationary portfolio and also expanding our footprint in digital commerce. While these strategic investments will impact our domestic margins in a short to medium term, they are absolutely vital to secure our long-term market dominance. As we have in our publication business. Over to export business. Our export stationery saw a decline of 10%, which also compressed the divisional EBITDA margin by 3%. What I mean divisional is the stationary EBITDA margin by 3%. This decline was a direct result of our tariff challenges in the US, our major market. To maintain business continuity and protect our market share, we deliberately reduced the pricing of our products for our customers, so that even they get some compensation from the tariffs that were levied. Of course, the pressure was partially offset by favourable exchange rate movement, but now today we have much better clarity on these tariffs, and therefore we anticipate our export revenues will be back on track starting FY27.

Hello.

In terms of capital investments, I would like to also mention about two critical adjustments that has been made. First, which I had spoken about earlier on our UAE manufacturing project. So, we had placed our investments in manufacturing. for UAE, but today we have kept it on hold due to ongoing geopolitical tensions. So very limited investment has gone till date. We may resume depending on the situation going forward. Simultaneously, we have successfully invested in a state-of-the-art manufacturing facility in southern Gujarat. This plant will cater directly to new product categories for both domestic and export market, and by which we believe we will be able to introduce several other categories. So, dear friends, your company is transitioning from a traditional paper station manufacturer into a diversified digital-powered consumer brand. We are strategically absorbing short-term margin pressures today to build a strong market position for tomorrow. With the upcoming curriculum changes and our Gujarat planned, Which will help us expand in our non-paper product line. Our long-term growth foundations have never been so stronger than what we have been seeing now. On behalf of the management, I extend my deepest gratitude to all of you for your unwavering trust and confidence in your company ahead. Thank you very much.

So, shall we open the door for Q&A?

Yes, please.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Praneet from SJ Investments. Please go ahead.

Hi, management. Thank you for the opportunity. First, I wanted to ask in terms of, let's say, guidance from the international, let's say, stationary division. So, the customers, how are they reacting? I understand everything is set back to normal. Did they start procuring their old volumes, or is there any reduction for the time being? Will you just give a broad sense on what's happening from the consumer side in terms of our offtake?

Thanks, Manit. So, I need to explain you the cycle which we go through every year. So, between November and February, each of our customers, they plan their back-to-school buying volumes. And similarly, in the current year, these numbers were crystallized, finalized by them between this period. So, as we speak, There are no cancellation of orders at all. As I explained in my brief note at the start, we had to reduce our margin to maintain our continuity of business. But volume front, there are no reductions. Thankfully, today, whatever price reduction that we had offered earlier, Now they are reversed back. So overall, from volume point of view, we are not seeing reduction as well as on margin front. We'll be able to achieve the same margins as we were doing earlier.

Understood, sir. So, right now, the compression we probably took through the year is not going to likely continue, and we can go back to, let's say, last year's margins. Is that a fair understanding?

That's right. Only the first two months of the year where reduced pricing supplies have already happened. So to that extent, we may see some little margin compression, but for the year, it will be hardly impact in not even a hundred basis point. It will be more or less lesser than that.

And one more question regarding our domestic strategy. You sounded a lot more, let's say, aggressive in terms of our domestic strategy, whereas we used to do that in the past for the at least international exports for a specialty. Could you explain what is the strategy just or is it just the fact that we have more specialized plans today?

So, one, we now clearly believe that brand pool only will be a sustainable long-term growth. Where we have decided to bring out several other categories in stationary area. So, and the brand is not that much known in stationary, particularly the non-purpose stationary brand. And therefore, we have decided to invest aggressively in the brand, building brand of both paper and non-paper stationery. That is very, very important for our long-term sustainable growth. And that is the strategy we have decided.

Understood, sir. Could you explain a little more behind the reasoning for the… What is any market dynamic was changing, or in terms of internally, we had a change of direction on where we wanted to be?

So, till date, we were always dealing in paper stationery, and there, whatever, initially, in the initial period when we launched paper stationery, we had spent on brand, and then thereafter, we reduced that expense dramatically. But now that we are entering various other new categories, we just don't want to start with a small number and also grow in a very small percentage. And therefore, we felt that if we really want to give a good impact initially on the revenue and then on the margins, we finally decided that we need to push hard to create brand awareness.

Would it be the same UR brand? Would it be taking forward or are we launching other brands also?

No, it will be under UR brand only.

Understood, sir. So, right now, you mentioned that you wanted to become aggressive. Could you explain what are the advertisement spend going to be like in terms of going forward, let's say, a year or two? And when do you think we need to continue spending this incremental investment in creating the brand? How long do you think that will be?

So, in the first year, we have planned around 30 crore, the brand expense, and in the subsequent year, around 40 odd crore to spend on brand. So, this is the two-year strategy that we have decided, and reasonably, we are clear that we won't spend the same number in the subsequent years.

But in terms of, let's say, these things, so as a result, are we going to charge a higher brand premium or we want to still stay very on the similar price bracket for the next two years?

I don't think so. We can really remain in this competitive environment. We can really charge premium just because we are spending. Like all other brands, we will not play with the end product pricing, that we will see the comfort of the end consumer, and so I think this will not get upset by the price increase, and it will be a pure additional expense for the company.

So, right now, we want to, so paper would not be, let's say, start. It will be a large part of our portfolio, but not this far, but we want to continue creating new non-paper products where we start growing much faster. Is that the right understanding?

That's right. That's right.

Got it, sir. And in terms of our, let's say, both paper capacity versus non-paper capacity, could you give a broad sense on how it is today?

On paper capacity, I would say we are quite highly utilized. So on an annual basis, I can say around 80%. And why 80%? That three months of the year, we have a very, very low volume manufacturing because of this being a seasonal business. Then also we are able to consume around 80% of our capacity. And we actually outsource a lot also during the year. With respect to non-paper stationery, apart from the manufacturing plant that we set up in Gujarat, southern Gujarat, which is mainly for plastic-based products, so that will, of course, will get manufactured there, but other categories that we plan to come out with, initially, we will be outsourcing with our brand and packaging. We are not going to invest in every category immediately.

So, you'll wait till probably that product is...

I'm sorry to interrupt, Rameer. You may please reach out to me for more questions.

Okay, thank you. I'll join back to you.

Thank you. We'll take our next question from the line of Neeraj. From Whitevine Investment, please go ahead.

Yeah, thank you. Sir, I have a few questions. One is, in the South Gujarat plant, how much CAPEX have we done on that?

So, altogether, we have invested 65 crore, including buying of a land.

And how much asset turn can we assume on such business?

Now, as per our budgeted plan, the asset turn could have been two times in this second year itself and 2.5 times thereafter. Unfortunately, the day the plant got started, lots of challenges from the export market came, then several challenges came, so we have actually not been able to utilize this plant at its right capacity as on date. I would say, in a normal period, we'll be able to consume one time asset turnover in the first year, and at least two times in the second year, and thereafter around 2.5 times.

So, the 2.5 is the max you can talk about today.

So, here it is. See, actually, we have a larger land as well as larger building with us. The machinery that we have invested so far can bring up, bring out this much of production and any addition of machinery where additional investment in plant and building will not go. So any, every additional machinery will further bring the output. So going forward for beyond 2.5 times investment, we just need to add the machineries. But, sir, consider it. Yeah, then asset turnover will be much better, much different. Got it.

And so, in terms of, but if you see your, if your revenue of domestic is 400 crores, we're talking of, say you put up 130 crores of, or 140, 50 crores of revenue capacity for the land. Is it right to say that your, a lot of other products that you're planning to launch from a branding perspective will be mostly from outsourcing side?

No, first of all, this plant is not only for domestic business. This plant also will be utilized for the exports. The plastic products that we have been exporting till date, which is a combination of plastic and paper at times, which we are outsourcing today. So all that will stop and we will start manufacturing in this plant only. So this plant is going to support both businesses. But as I mentioned to Pranit earlier, for other categories, we are going to outsource. All plastic-based products will come out from this factory. Got it.

Two more related questions, and I'll come back on the queue. One is, you had seen export revenue growth of 18-20% compounded for years, between FI 16 and 23. And then it's tapered down. And what is your expected range of growth, say, next three, four years, three, four years, in exposed revenue of the stationary side?

So, barring any incidences across the globe in a normal situation for us to grow at Around 15% is possible, and we already had spoken this with our present customers also, and we are helping them to develop newer and newer products and categories on a regular basis. So 15% growth is quite achievable for us. But if such situation comes, then we frankly do not have clarity on. And now there is one more reason that we should mention, I should mention on this call that because of tariffs and other situations happening today in the globe, there has been inflation pressure in the developed countries, including U.S. Now, what will be the impact of that inflation on the buying pattern of the end customer? That really needs to be judged or understood. We believe that we are in very, very basic products, so there we are not going to see any impact of such inflation, but nevertheless, we all may discount by around 5% to 7% impact. And the last

question, sir, on the margins, what margins are you expecting the stationary business? Because you said 30 crores and 40 crores of spending in advertising, which is a very large, good, reasonable percentage of the domestic revenue. But as an overall stationary segment, how much EBITDA margin are you expecting to go back to?

So... In the current year, with things normalizing as we see in the country at least, as well as with our exports, so we should be making around 9% margin in the current year post these expenses, and in the subsequent year, around 9.5% to 10% versus around 30% that we are making on a regular basis.

Okay, and that's because of the investments that you're doing?

That's right.

Okay. But won't the U.S. margins also be better to export its margins because the rupee has depreciated, your growth will also pick up on that side.

So that is a short-term benefit at times we have got in earlier years. Whenever such situation arises, our customers are quite big, smart. They also understand the currency fluctuations and currency rates of the respective country. So when they negotiate in the subsequent years, they always consider, keep these currency rates also in mind. So actually they do not allow us to earn more.

Got it.

What they guarantee is the volume. They just don't allow us to earn more percentage.

Okay, so thank you. I'll come back and thank you. Thank you.

Sure.

Thank you. Next question is from the line of Gunit Singh from Counter-Cyclical Investment. Please go ahead.

Hi, sir. Thank you for this opportunity. So, I would like to understand why has our revenues from the publishing segment largely remained flat since FY19? So, I am sure that the curriculum must have changed a couple of times in between, but the revenues have remained flat. So, can you help me understand that?

So, since FI 19, not even FI 19, but FI 18. Curriculum has not changed at all, and that is the main reason. And as I mentioned in my brief speech earlier, the curriculum change cycle is starting from the current year, that is FI 27 onwards, which will continue for four years. So that is one reason because there was no curriculum change. There are several other reasons year on year.

Which we are facing.

One of that is the post-pandemic, our customer segment, which normally was studying in the state curriculum, has shifted to central. Many of them have shifted to central curriculum. So our state revenue could not really grow because of that. The balance per customer segment. Buying capacity also had reduced over the years. So, there are such two, three reasons, but the most important was no curriculum change for this period. That was the reason of the flat revenue for such a long period.

Got it. So, in Maharashtra and Gujarat, you're saying curriculum did not change since FN19. And now, You are expecting curricular change in the current calendar year. So, what kind of a, I mean, when you push or what kind of a target, when you can expect from this publishing segment because of the new curriculum? And where exactly is the curricular changing in both Kusrat and Maharashtra?

So we are not expecting, we are certain about it, because both respective state governments have announced and accordingly the new curriculum books have already started coming in the market. So we are certain about it. Now with respect to growth, at least in the first two years, we are clearly seeing growth of around 15% in a single year, and this we are expecting because In both the states, Gujarat and Maharashtra, where we are quite dominant, the curriculums are changing simultaneously.

Got it. So, in both these, I mean, does the curriculum change take a couple of years, or does it happen just over, say, one year, like, for example, if it... Happens in 2026, then the same curriculum will continue over the next two years. I hope to understand that. And what actually drives this growth when there's a curriculum change? I mean, what is the reason? Because the number of students is the same. So what are exactly the drivers?

So, curriculum change, overall curriculum change right from kindergarten till twelfth grade, the change happens over a period between three and four years. Not all grades or standards changes in a single year. So, what I, if I want, can explain you a little better that, for example, in the current year, grade 3, 4, 5 curriculums are changing. In the subsequent year, there will be two or three more standards curriculum will change. So, this cycle gets completed over a period of three to four years. Now the reason of better mud growth in the curriculum change. Particularly, the highest category of products that we sell, the biggest competition comes from our own second-hand books. So, that second-hand book market is totally gone away whenever curriculum change happens. And secondly, for all the category of products that we are publishing, There is no trade inventory also. With 5,000 retailers, they also need to maintain the inventory. And therefore, for both these reasons, it helps the company to grow quite significantly during curriculum change cycle.

Got it. And we've seen that the stationery business has been growing, so do we have any plans for de-merger of the stationery and the publishing segment? Because we have different strategies for each anyway. So, what are your thoughts on having a de-merger?

So, as on that, the numbers are not that big even for stationery independently. So, there are no plans right now, no thoughts also right now to de-merge the business.

Got it. And in terms of capital allocation, would you be looking at share buyback because the share price is lower than what it was in 2017? And buyback will give an indication to the market of future growth and confidence also. And also, it's a tax-efficient way of returning money to the shareholders. Thank you. What are you talking about buyback?

No, no. I think you are a new investor. In the last five years, we have already done, if I am not wrong, around three buybacks already in the last five years. Right, sir. Yeah, at the right time, we may again decide on the same.

All right. I need to request you to consider it. Thank you very much.

Thank you. Next question is from the line of Arihan from Bohair. Please go ahead.

Hi, sir. Thanks for taking my question. Sir, I wanted to know, like, in standalone publication business, the EBIT margin, there was a decline in second half, FY26. Like, in first half, they had jumped 300 basis points, but in second half, they fell by around 500 basis points. So, wanted to know what was the reason for falling the publication EBIT margin in second half, and how would the publication EBIT margin will be in FY27 compared to FY26?

So, Ariyant, first of all, I have always been requesting all my investors to consider our numbers on an yearly basis. There are a couple of reasons for that, that our business does not continue every year in the same manner. What I mean is, sales does not happen in the same manner every year. So, for example, a couple of institutes buying products in the first half. Now, even though schools reopen in the month of June and part of areas in the month of July, they end up buying in August, September, October, depending on their fund situation. So whenever there is some shift in buying pattern, automatically margin fluctuates between these periods. So that is one of the main reasons. Added to that, overall inflationary trend together with no revenue growth automatically shrinks margin. So these two things would have happened. And thirdly, Kalpesh may come in because of the one-time provision, because of the new labor law also impacted the margin of the publication business as well as stationery business in the second half. Kalpesh, you may please correct me if I am right or wrong. Yeah, that's correct.

That was a part of exceptional item,

so it's not fitting a rebid.

But for Kalpesh, he's saying it is part of exceptional only and not as the EBIT margin of the... Publication business standalone.

But see, again, we have created a provision for a live encashment. So that has also created some negative impact on our margins. Is this because of the new labor law? So, as per new labor law, at present, we have continued with our old system, and in next first quarter, there will be some positive impact, because this will change it to a new labor law, wage recognition. But, at present, there was some extra provision created for new engagement.

So anyway, what I am trying to say, with no growth in revenue and continuous inflationary pressure, the margins are likely to impact. Again, also another important area that you may have to consider that this being a seasonal business, for a particular year, we do not change the end product pricing. Whereas, we do not have full control over the purchase of our raw material pricing. So, this also may impact. Now, in the first half, I just recall, in the first half, the paper prices were in our favor. So, we saw a little better margin. But in the second half, it was not. So, my request is, if you can look at the full year picture, it would be better.

So, in FY27, are we expecting similar full-year margins or in publication use?

I would say a little better margin because of the... Double-digit growth that we are expecting in the revenue. So, that will offset not only the inflationary pressure of the current year, but will add further margin into the business. So, there will be at least 200 basis points better margin than the last year.

Okay. What was the Indianica revenue and tax for the full year? Can you write for FY27? And similarly, what are our expectations for domestic stationery roads and expo stationery roads for expectantism?

Kalpesh, can you briefly tell me about Indian Econ numbers independently?

I'll just open my working. Yeah, so Indianica had a next sale of 48 crore for, sorry, 42 crore for the year, and it had a negative profit of loss at pet level at 16 crore.

Okay, so what was the reason for decline in revenue? And last year, we had 55 crore sales. And this year, they are much lower as 42 crores.

The major reason is that we are not trying to grow in terms of creating new products in that business. The reason is that we have already enough categories for that business. So, as we stopped creating new categories, The demand for the old category is reduced. So that is another setback that we had. And simultaneously similar type of products we have started bringing it in Nomnit also. And that is the main reason of these lower revenue numbers in Indianica. And higher returns were there in the current year.

Okay. What is the domestic stationery and export stationery growth expectation for FF27 year on year? Yes, so I was asking what are our domestic stationery revenue and export stationery revenue growth expectation for FY27 year-on-year, and also what grade curriculum is changing for Gujarat specifically in FY27?

So, in domestic stationery business, we are expecting growth of 1, 5, 15%, including our new category in launches that we have already done so far. So, we are expecting around 15% growth. In the subsequent year, of course, it will be higher growth, but since we are just launching various products, we are expecting 15% growth. In Gujarat, Rumi, do you have full clarity on which all grades are changing?

Yes. So, as Arians, I had communicated to you earlier also that there are a couple of standards which are changing, but not all the subjects of this standard. So, standards like 6th, 5th, 4th, and 7th are changing certain subjects, but not all the subjects like it is happening in Maharashtra.

Okay, sir, on export growth, what is the guidance for this year?

So, export growth, I will be little conservative on estimating in a single-digit growth, higher single-digit growth, and reason being that we really do not know the impact of the recent. What is the situation happening and how much would that additionally cost to the end customer as well as to our buyers? And how will that change the buying pattern that we are not very clearly sure of? So I would say single higher digit growth will be an estimation around 8 to 9 percent.

Thank you, sir.

Thank you. Next question is from the line of Sooham from PressPadder3AMC. Please go ahead.

Hello. Am I audible, sir?

You are audible. Please, please.

Thank you. Thank you. Thank you. Sir, Sunilwa, you are just mentioning that you are going to spend the money on the branding for the stationary business. But I am surprised because our export business is degrowing or rather the margin is eight because of the tariff issue. And in the domestic market, because of the unorganized segment, there is a competition. And even after spending the money on the funding, we are not going to charge any premium. So, what is the exact logic to spend the 30 years in the first year and 40 years in the second year? How it will be benefited to the company and what exactly benefits we are thinking to get from this brand exercise?

Valid question. Now, exports market in last two years, in particular, we have been seeing some of the other challenges where we are not at fault. Now, how much should we continuously depend only on exports business, generate higher revenue and higher margin from export business? Can become question going forward and therefore we need to have good foothold in the Indian market. That is the first reason of us deciding on spending higher amounts. Now, thankfully, whatever export business that we do, which has reasonable margin. So if we look at a stationary business as a whole, where manufacturing setups are common, most of the investments made are common. We feel that if we establish ourselves as a strong brand in the country, that will benefit overall in the domestic market. Otherwise, it remains a static supplier, a static producer of a product, and particularly when we are introducing newer category of products. I think, I believe it becomes very, very important, and therefore this decision. Having said that, if situations will worsen from here in the exports market, we may not spend, but today, as per our plan, the numbers I gave you.

Okay, okay, sir. So, we are spending to promote the Yua brand. Is it right, sir?

Yes, please.

Okay. Sir, it is not advisable to strengthen the distribution channel because the textbook has a boundary, say in the Gujarat or Maharashtra particularly textbook, because we are publishing that or providing the publishing business for the Gujarat and Maharashtra side. So, stationery, as such, no boundary, because the stationery produced in the Gujarat or Maharashtra can be sold in the other state also. So, it is not advisable to strengthen our distribution channel so our product is available on a pan-India basis, and so there will be a revenue growth, at least in the domestic world?

See, for your information, we are already available all India for a number of years. Only thing, we have not penetrated within the same geographies beyond Maharashtra and Gujarat. So, our revenue percentage from other states are still low. Now, when I am spending on brand, but obvious, if the availability of products are not there, it is not going to help. So, there is a continuous... Increase in number of distributors across various states, that also processes on, in which we really don't have to spend money on. So that is additional strategies that we already are implementing. But since it is not affecting the margins, I did not speak about it.

And, sir, my last question, you just mentioned that there was a syllabus change for the standard 3, 4th, and 5th for the Maharashtra standard. Do the company has remained any inventory of these standards, which is not sellable now, because of the change in syllabus, and it is of a margin, or it becomes a useless inventory? Is there any amount of inventory lying with the company?

No, no. So, yeah, immediate reaction that there is very, very low inventory, not even 1% of our total revenue of the company we have as an inventory. Now, having spent so many decades in this business, every curriculum change cycle we are very clear of. We knew about so government also announced almost a year ago about this great changing. So automatically we become cautious in further printing in the previous year. So therefore, thankfully, we do not really have big inventory of old slaves items.

Okay, if you permit, sir. Company, do, do the sun and will, are we taking any meaningful step to make the Indian niqab at least achieve the breakeven?

So we have filed for rather we have decided to merge it with Naunid and the major reason being that lot of cost that are duplicated at both the locations and both the companies individually gets reduced. So that is number one. Simultaneously after having merged the company. There will be a lot of commonalities in terms of distribution depots. It means the logistic costs also will come under control. So these are a couple of reasons. And when both the companies, the parent and the subsidiary publishing does Books for the same curriculum that is central board. I think consolidation at that level also will further benefit the company. So that is the reason now. Earlier, we always thought that. Central board market needs a different brand and different strategy. Therefore, we always kept it separate, but now we have realized that there is no meaning of keeping it separate, and therefore we are merging. So this is the major strategy shift that we have decided, and we are waiting for the authority approvals for it to merge.

Okay. Okay. Thank you. All the best, sir. Thank you. Thank you, sir. Thank you.

Thank you. Next question is from the line of Himanshu Upadhyay from Street Ford Investment Managers. Please go ahead.

Yeah. Hi. Good afternoon. My question was, if we add the business of Navneet plus Indianica on the CBSE, has it increased or reduced overall in FY26? Because we stated some of the things which were there in Indianica, we have brought to Navneet and all that stuff. So, just to understand how it has moved.

So, your question is better by adding the number. Yeah, hello.

Yeah, hello. Yes, please. No, my question was, what is the combined revenue of CBSE for both Navneet and Navneet? Ablishers plus Indianica. And how did it fare in FY26?

If we say combined revenue, it was last year around 7-0 crore. And only this year what we did was.

So, you are talking about the combined revenue for financial year 26 of Indianica and our CBSE business, what we do in knowledge education, right?

Yeah, and what is FY25?

Yeah, it's, it's, yeah, it's, it is about 63, 64 crores.

And this is FY25 you are talking about or FY26?

I am talking about FY26. So, it is about 65 crores at present. And in FY25, I have to get the numbers.

Okay. And how many schools would we be present now across? Or where the books are subscribed in FY26? And what is the outlook for 27? What CBSE am I talking about?

You are talking about CBSE schools, right?

Yeah. How many schools subscribed the books for FY26 versus FY25? And what is our expectations for FY27 in CBSE?

Huh, so you're asking specifically for Indian Nika, right?

No, I am saying, let's say, overall CDST business, the whole purpose is to grow that business, okay? We are saying more schools are moving towards that direction also. So I'm trying to understand how is my penetration with schools increasing? Whether it is Indian Nika or Navani, it does not matter to me. But I'm saying overall business, how is it moving?

So, every year we try to reach out to more number of schools than the previous year, okay? Now, if you look at the data, so there are around 35,000 to 40,000 schools, okay, which use this type of publication. So, every year we try to reach out to more and more number of schools. Now, if you ask us the exact number of schools that we are reaching out to and the business that we are getting from, the number of schools out of which we are reaching out, may be a difficult question to answer right now. Okay. But rest assured that the penetration that we are trying to do, the number of new schools that are opening over a period of time, we are trying to reach out to all the schools. At the same time, trying to increase our title in the same school. So, both the exercises are going on simultaneously as far as CBSD is concerned.

Now, I appreciate that, but see the results are not there. So, just trying to understand. Where the problem is? Okay. And what are we doing to resolve the problem? Because it's quite some time. I think more than 6-7 years we have been working on or trying these things. So what are we changing or what are we doing now?

So as we have discussed earlier also, now it is not the business like what we do in Navneet or skateboard school. It is a difficult business. Number one. And number two, there are a lot of competitors in the same business. Right? So, we are trying to come up with more number of titles, more number of titles in the same category also, in different categories also. And that is what everybody is doing. And if you look at any CBC publisher's numbers, we will always see that, you know, Their numbers are not growing over a period of time. The schools are growing, the number of students are growing, but at the same time, the competition is also equally growing. So, we are trying to maximize our opportunities with the existing schools, reach out to more and more number of schools, and at the same time, increase our presence in existing schools.

Okay. And one more thing, under the changed syllabus, how is the size of the book changing? Or generally books, are they becoming thicker or thinner? And how does the realization also change? Is the value per book increasing or going to remain constant? Some of those thoughts will also be helpful to understand. This is, I am talking about Gujarat and Maharashtra State Board, where syllables are changed.

So, see, as and when the government launches the textbooks in the market, depending on the size of the government textbooks, we have our books published. Now, whether they increase the size of the textbooks, then the size of my supplementary books will also go up. If they reduce the number of pages and the chapters or the content in the textbook, accordingly, my book will also go down in number of pages. And everything depends on the number of pages as far as our products are concerned. So, it all depends on the government textbooks.

I completely agree to that. So, my question is that only how is that changing under new education policy and the labour scheme? Is the syllabus increasing? Are the books increasing? And will the realization also increase? Or do you think if we take the overall lump sum situation, there won't be much change on the realization and the size of the book? So that is what I am trying to understand.

So, you can consider your last statement as a valid one that The size of the books more or less will remain the same as far as the grades are concerned. Okay. Yeah.

Okay. Okay, yeah, thanks for the reply.

Yeah, sure.

Thank you. Next question is from the line of Sara Jutul from Benwell's management. Please go ahead.

Thanks to the opportunity. Are you audible?

Yes, you are.

Okay, so my question is again, it relates to Indianica. Can we just quantify the cost synergies are realizable because of the budget? And the second question is, which are roadmap for Indianica, like any investments are lined up? And finally, like, do you have any plans to monetize a huge contingency policy you created over your decades, just like one of your peers is doing? These are my three questions. Thank you.

So I believe the first two questions can be answered by Kalpesh.

Good morning, everyone. So, see, definitely there will be a lot of cost synergies when we merge Indianica because there are overlap of schools when we visit. The same school may be visited by Indianica sales team and an only sales team. So, definitely there will be cost synergy in terms of number of schools being visited. We can increase the number of schools being one team. Second, in terms of technology and content creation. Also, there will be synergy and we can say a lot of cost there.

Okay, by any chance, can you quantify like the time it takes to realize whenever the merger happens?

Yeah, it will be difficult here at present, and with the time merger happens, we will not be able to disclose. What was your second question on the, sorry.

Second question was related to future strategic roadmap for the India Mika business. Do you plan to enter any more new markets, geographies, or launch new product or something like that?

Yeah, definitely. Since we'll have, this overlap will go away, so we'll have more staff on the ground to cater to the more number of schools and maybe more new territories. So that is definitely a plan to look out for as a complete CVAC business, since it will be under the umbrella of NEL and only education limited. And there is a continuous development on the new products, new titles, whatever you want to come out. So that is a continuous process which we work on. And definitely that will help.

And any investments lined up for the business, like strategic investments that you have in your mind?

See, main for publication business, main is the content. And on that only we'll have investment. So it's not any physical investment like factory or all we'll need to do because we have a capacity which we can gather and there are enough capacity available in the outside market. So no physical investment, but yeah, definitely we'll invest in content creation and all. So let's see.

And the final question was regarding any plans to monetize the huge content repository which you created over decades, just like one of your peers is doing. Any plans to do that in the future?

Like which peer you are talking about?

I don't know if I can change the name or not, but actually what the company is doing is, like, they are licensing their own content to AI-related companies or other companies, which out of which they are making the high-margin business, like high-margin revenue, which adds directly to the bottom line. If I can take the name, I can take it. I don't have any issues. Can I take the name?

I don't know whether you can pick the name or not, but anyway, I will check this internally and get back to you.

Okay, okay, okay. Okay, yeah, thank you.

That's all for my day. Thanks for taking my questions.

Thank you. A reminder to all the participants, anyone who wishes to ask a question, may press star and one. We will take our next question from the line of Arihan from Boheat. Please go ahead.

Yeah, hi. I just wanted to know regarding the paper prices. So, was there any jump in paper prices in the last quarter in 4 to 26? And what is the current trend you are seeing in paper prices? So, that's my first question, and second word, what is up, KPIC? We are expecting an F-27, F-27.

One second, eh? One second.

Yeah, Arian, this is Mr. Gala here. Let me come back online. Yeah, so your first question is, the last question was, what are the CAPEX? So as such, as I mentioned, the UAE project has been stalled for a while, till situation improves. We can't really commit on when will we be doing. But otherwise, at a company level, in India level, at India level, at present, we don't have big plans to invest either in land building or in machinery. So it would be just hardly 25, 30 crore of investments. And what was your first question, Aryant?

I wanted to know, regarding the paper prices, was there any jump in last quarter in 4-26, and what are the current trends in your expectations?

So, the paper that we used in last one quarter, we have seen around 8% jump from its lowest level that it had gone down last year. Uh, future direct talks. Because the cost of manufacturing paper has really gone up because of the fuel pricing. They use lots of coal or electricity to manufacture as well as the chemicals that they use also has gone up dramatically. So, there has been talks of... Cost going up, but finally paper mills will have to adjust to the market competitive environment. So they have been talking, but whether we really doubt that they'll be able to increase the paper prices going forward for next at least three to four months. Beyond that to predict also it is impossible for us.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sunil Gala, Managing Director, for closing comments.

So, thank you once again, friends. So, we are transitioning from just curriculum provided through textbooks or through paper to various areas of digital AI as well as stationary, including non-paper. As I mentioned, we'll be absorbing short-term margin pressures for the better future, but with curriculum change cycle and the new plan that we have just put up, I think our growth conditions. Uh, would be much better for next three, four years until the time we will have good breathing time to really think much better for the future period. So on behalf of the management, I extend my deepest gratitude to all of you for your unwavering trust and confidence in our journey ahead. Thank you.

Thank you. Thank you. On behalf of Navneet Education Limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.