MOSL: NAVNEET EDUCATION (INITIATING COVERAGE)-Steadfast-growth gaining momentum-CBSE curriculum opportunity sizable
Navneet Education (initiating coverage): Steadfast; growth gaining momentum; CBSE curriculum opportunity sizable; future-ready with digital offerings
(NELI IN, Mkt Cap USD0.5b, CMP INR153, TP INR210, 37% Upside, Buy)
- Navneet Education Limited (NELI), founded by the Gala family, is in the business of (a) publishing – educational, supplementary, children’s and general books, (b) stationery products, and (c) digital education. It derives 54% of its revenue from publishing and 43% from stationery. NELI's products are sold under the brand names Navneet, Vikas, Gala, Grafalco, Boss, Youva and eSense. It recently acquired Britannica India’s curriculum business for INR880m; this would be synergic to its CBSE curriculum business & did buyback of shares to tune of INR580m.
- NELI dominates the market for supplementary educational material for the Maharashtra and Gujarat State Education Boards. Its domineering position makes it a key beneficiary of the sustained demand for new supplementary material & workbooks, driven by periodical syllabus overhaul by the State Boards.
- Change of Syllabus in X and XII in Gujarat in FY18 and X and VII in Maharashtra in FY19 provides strong triggers for growth in next two years.
- ommon curriculum in Mathematics and Science across India triggers a huge opportunity for NELI to sell textbooks to CBSE-pattern schools across India. With the recent acquisition of Encyclopedia Britannica India (EBI), NELI is well poised to gain meaningful share in the growing CBSE market.
Navneet Education Limited, formerly Navneet Publication (India) Limited, is engaged in the business of publication of education and non-education books, and manufacture of paper and non-paper stationery products. The Company's segments include Publication, Stationery and Others. Its geographical segments include North & Central America, Africa, Europe, Australia & Oceania, Rest of the World and India. It has published over 5,000 titles in English, Gujarati, Hindi, Marathi, Tamil, Urdu, and other Indian and Foreign Languages. The Company sells its products under various brands, including Navneet, Vikas, Gala, Grafalco, FfUuNn and Boss. It also publishes various titles in the Children and General books category, which are not based on syllabus, such as coloring and activity books, board books, story books, and books on health and hygiene, art and artist, cooking, mehendi and embroidery, among others. It has manufacturing facilities in Virar (near Mumbai), Guma, Dantali and Silvassa.
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