Entry into new markets/segments to boost revenues • Navneet Education :: ICICI Securities, pdf link

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Midcaps - 2014 Value Buys: ENIL, Navneet, TTK Prestige:: ELARA

Value buys
Entertainment Network India – steady revenue growth
Entertainment Network India has continued on its robust growth path
despite a weak ad market through innovation and improved offerings.
We expect the company to report 11% revenue growth, driven by
higher volume. EBITDA margin is expected at a healthy 35%, about
50bp higher YoY, on account of operating leverage. With limited free
capacity, we expect it to drop low-yield clients and improve ad rates.
TRAI’s upcoming recommendation on license renewal and phase III
hold key to growth opportunity.
Navneet Publication – shift of gov orders to Q4 to impact sales
Navneet Publication should face pressure on top line in Q3FY14, due
to the absence of INR 20mn in government orders awarded in
Q2FY14. However, the company has received clearance from the
government, and orders should be received in Q4FY14, thus
compensating for flat growth expected in Q3FY14. If we were to
exclude government orders, revenue would grow at 15%. Increased
competition in the stationery segment should lower revenue and
impact EBITDA significantly, leading to a sharp fall in EBITDA of 62%
YoY. However, this should be offset in Q4FY14. Management is
confident of 15% growth over the next 2-3 years, owing to the
syllabus change schedule until FY16. We believe the stock is valued
attractively based on 9.7x FY15E earnings, given its asset-light balance
sheet, consistent FCF, robust 25%-plus return ratios and no macro risk.
TTK Prestige – macro concerns, given lack of growth drivers
TTK is battling several issues like power shortages in Tamil Nadu,
geopolitical concerns in Andhra Pradesh, and the government’s policy
to increase cap of subsidized LPG cylinders to 9 from 6, affecting
revenue. We expect top line to decline by 6.5%, with about 100bp
margin contraction, leading to a 22% YoY drop in PAT. With limited
signs of new product categories launches, the company should face
growth issues over the next 2-3 years. The stock is trading at 29x
FY15E earnings despite deteriorating financials.

Technicals: NIIT tech, Kaveri Seed, TTK Healthcare, Federal Bank, Navneet Publications, EID Parry, SRF, :Business Line

Please provide technical guidance on SRF and EID Parry both of which are currently trading at 52-week lows.

Ajit

SRF (Rs 199.7): You are right in stating that SRF is trading at a 52-week low. The stock is in a medium-term down-trend since the peak of Rs 444 recorded in November 2010. But it is halting at the key long-term support at Rs 200. This level occurs at 61.8 per cent retracement of the stock’s up-move from February 2009 low.

We can give the stock leeway up to Rs 180. That is long-term investors can hold the stock as long as it trades above Rs 180. But decline below this level will drag the stock to Rs 98 or even further to Rs 62.

Medium-term resistances for the stock would be at Rs 290, Rs 320 and Rs 350. The stock needs to record a strong close above Rs 350 to pave the way for a rally to Rs 444.

Education :: Q4FY12 Results Preview:: Centrum

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Growth momentum intact
Education companies are likely to deliver strong results
in Q4. However, we expect the companies under active
coverage to register 6% growth during Q4FY12 due to
unique one-off reasons. While Q4 is seasonly a weak
quarter for Navneet, NIIT’s single digit growth stems
from the sale of Element K business in Q3 that would
lead to lower revenue in Q4. We believe the growth in
topline would be largely driven by multimedia solutions
to private schools, vocational courses and IT training
segments. Within the space, we like Navneet Publication
and NIIT considering attractive valuations, strong
topline growth and better prospects of improving their
margin profiles in FY13E.
􀂁 Topline growth to continue: We expect the growth
momentum to continue for companies given the
opportunity in the space and also because Q4 is
seasonally a better quarter. Segments including
multimedia solutions to private schools and IT training
business would be key drivers. In case of Navneet, Q4 is
seasonally a weak quarter. NIIT (excluding corporate
learning solution) is likely to register 12% YoY growth.
􀂁 Operating margin to decline on one-offs: NIIT would
witness subdued margin as the individual learning
segment is in the process of integration. We believe
that NIIT would see margin expansion in FY13E on the
back of better sales mix in favour of individual learning
solutions and school learning solutions.
􀂁 Prefer Navneet Publication and NIIT in the space: We
prefer NIIT in the space considering attractive
valuations and prospects of margin expansion in FY13E.
Within the Publication space, we like Navneet
Publciation given its strong growth momentum for
FY13E/14E and margin expansion and improvement in
return ratios.

Navneet Publications Buy Target Price: Rs75 : Centrum

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Navneet Publications

Buy

Target Price: Rs75

CMP: Rs55             

Upside: 37%

Poised for growth

Navneet Publications (Navneet) is a dominant publication house in Maharashtra and Gujarat producing both curriculum and non-curriculum books. We expect the growth momentum to pick-up backed by a change in syllabus in the states of Maharashtra and Gujarat leading to 12.3% CAGR in revenue over FY11-14E. The strategy of the company is to focus on its content business which has a stronger business profile that leads to profitable growth. We like 1) the business profile, 2) consistency in terms of growth rate and operating margin which is slated to improve with better sales mix and 3) consistent dividend payout (dividend paid since listing). We initiate coverage on the stock with a Buy rating and a target price of Rs75, implying 15x FY14E earnings.

m  Strong track record: Over the years, the company has demonstrated solid track record which is visible from its leadership position (especially publishing business in its areas of operation in Maharashtra and Gujarat) and its financial performance. Over FY06-11 (5 years) the company has achieved revenue CAGR of 13.5% and EBITDA margin in the range of 20-22%. We believe that this leadership status will be maintained with pick up in growth profile going forward. 

m  Publishing revenue to deliver 15% CAGR: Publishing business, 60% of revenue, caters to both curriculum (state board) and non-curriculum books.  Our expectation of higher growth for the next two years stems from the change in syllabus in the states of Maharashtra and Gujarat.  Navneet is expanding its market in the content business to Andhra Pradesh which together will contribute 15% CAGR over FY11-14E.  

m  Margin to improve with better sales mix:  We expect EBITDA margin to improve by 200bp as 1) Sales mix changes in favour of publication business which generates 33-34% operating margin; 2) stationery business reaches its bottom in terms of sales and margin in FY12E and 3) the turnaround of its subsidiaries. 

m  Valuation to pick up on better growth prospects: With 60% revenue coming from publishing business, revenue visibility of the company is strong and is fairly insulated from the volatile macro economic environment. We expect revenue and net profit to register 12.3% and 21.3% CAGR respectively over FY11-14E driven by better sales mix and improvement in EBITDA margin. Also, the return ratios would improve consistently and go up to 25-26% by FY14E on the back of profitable growth and limited capex needs. We believe these reasons force us to build a case for multiple re-rating and return to one year forward price-earnings of 15-18x. The company has been distributing dividend since listing and the dividend yield stands at 2.6% considering FY11 payout. We initiate our coverage with a Buy rating on the stock with a target price of Rs75, implying 15x FY14E earnings.

Buy Navneet Publications; Target : Rs 65 ::ICICI Securities (pdf link)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


PDF LINK for report- click HERE



S t a t i o n e r y   s e g m e n t   a ff e c t e d   b y   r u p e e …
Navneet Publications’ (Navneet) Q3FY12 results were marginally lower
than our estimates on the topline front. However, the EBITDA and PAT
were considerably lower than our  estimates. The company reported a
topline of | 84.1 crore (up 12.8% YoY) against our estimate of | 90.5
crore, led by 13.6% and 10.9% YoY growth in the publication and
stationery segment, respectively. The operating margin came in lower
than our expectation of 14.8% due to increased raw material cost and
higher other expenses. The company reported an EBITDA margin of
11.9%, down 156 bps YoY. A weak operating performance and a
depreciating rupee led to a PAT de-growth of 34.8% YoY to | 4.0 crore (Idirect estimate: | 7.4 crore). While the publication segment is expected to
continue its strong performance on the back of the lined up syllabus
changes, the stationery segment is likely to face short-term problems. We
have revised our FY12E estimates to factor in the same.
ƒ Segmental highlights
Publication: The publication segment reported a topline growth of
13.6% and 18.5% to | 48.1 crore and | 319.9 crore in Q3FY12 and
9MFY12, respectively. The segmental EBIT margin stood at 21.5%
and 34.2% in Q3FY12 and 9MFY12, respectively (22.2% and 33.6%
in Q3FY11 and 9MFY11).
Stationery: The stationery segment’s revenues increased by 10.9%
to | 34.7 crore in Q3FY12. However, for 9MFY12, the segment
revenues de-grew 3.3% to | 173.6 crore. The segmental EBIT
margin stood at -8.9% and 8.4% in Q3FY12 and 9MFY12,
respectively (4.0% and 13.6% in Q3FY11 and 9MFY11).
V a l u a t i o n
Considering the virtually debt-free status, healthy return ratios (RoE of
greater than 20%), strong free cash flow generation and the potential to
boost the earnings through inorganic growth, we believe Navneet
Publications is a good play on the Indian education sector. At the CMP of
| 57, the stock is trading at 16.6x and 13.2x its FY12E and FY13E EPS of
| 3.4 and | 4.3, respectively. We have a BUY rating on the stock with a
target price of | 65 (based on 15.0x FY13E EPS).

Buy Navneet Publications; Target : Rs 65 ::ICICI Securities (pdf link)

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


PDF LINK for report- click HERE



S t a t i o n e r y   s e g m e n t   a ff e c t e d   b y   r u p e e …
Navneet Publications’ (Navneet) Q3FY12 results were marginally lower
than our estimates on the topline front. However, the EBITDA and PAT
were considerably lower than our  estimates. The company reported a
topline of | 84.1 crore (up 12.8% YoY) against our estimate of | 90.5
crore, led by 13.6% and 10.9% YoY growth in the publication and
stationery segment, respectively. The operating margin came in lower
than our expectation of 14.8% due to increased raw material cost and
higher other expenses. The company reported an EBITDA margin of
11.9%, down 156 bps YoY. A weak operating performance and a
depreciating rupee led to a PAT de-growth of 34.8% YoY to | 4.0 crore (Idirect estimate: | 7.4 crore). While the publication segment is expected to
continue its strong performance on the back of the lined up syllabus
changes, the stationery segment is likely to face short-term problems. We
have revised our FY12E estimates to factor in the same.
ƒ Segmental highlights
Publication: The publication segment reported a topline growth of
13.6% and 18.5% to | 48.1 crore and | 319.9 crore in Q3FY12 and
9MFY12, respectively. The segmental EBIT margin stood at 21.5%
and 34.2% in Q3FY12 and 9MFY12, respectively (22.2% and 33.6%
in Q3FY11 and 9MFY11).
Stationery: The stationery segment’s revenues increased by 10.9%
to | 34.7 crore in Q3FY12. However, for 9MFY12, the segment
revenues de-grew 3.3% to | 173.6 crore. The segmental EBIT
margin stood at -8.9% and 8.4% in Q3FY12 and 9MFY12,
respectively (4.0% and 13.6% in Q3FY11 and 9MFY11).
V a l u a t i o n
Considering the virtually debt-free status, healthy return ratios (RoE of
greater than 20%), strong free cash flow generation and the potential to
boost the earnings through inorganic growth, we believe Navneet
Publications is a good play on the Indian education sector. At the CMP of
| 57, the stock is trading at 16.6x and 13.2x its FY12E and FY13E EPS of
| 3.4 and | 4.3, respectively. We have a BUY rating on the stock with a
target price of | 65 (based on 15.0x FY13E EPS).

Navneet Publications: Management Meet Update :: ICICI Securities

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


C o n v e r t i n g   k n o w l e d g e   i n t o   w e a l t h …
We met the management of Navneet Publications to understand the
company’s business and plans, going forward. Navneet Publications’
(Navneet) business consists of two major segments: publishing
supplementary books (educational, children & general books - like
children’s activity books, health books, cookeries, etc) and stationery
products including paper and non-paper based stationery products.
Apart from these two main segments, Navneet is also present in the elearning space. The classroom teaching software available in CDs
contains animated clips that enable teachers to explain the concepts in
a better way. It also has a retail product that can be used by students at
home.
Strong brand recognition
Navneet has been the leader in the supplementary education book space.
The Indian education system is  examination-centric and success is
equated with high marks. In this backdrop, supplementary books, with
examination-focused questions and answers, have gained high
significance. Navneet primarily caters  to Gujarat and Maharashtra. It has
consistently enjoyed a dominant  market share of 60–65% in the
supplementary education books segment in these states.
Leverage on publications business
Unlike the high margin publication business, the stationery business is a
volume play. Having been in the publication business for a considerable
period of time, Navneet has long standing relations with various retailers
and can leverage this to further grow its stationery business.
Healthy return ratios and consistent dividend payout
Navneet has been maintaining its RoEs and RoCEs in the range of 20-25%
and 25%+, respectively, for at least the last five years. It has continually
rewarded its stakeholders. It has paid dividends each year and also
maintained a dividend payout ratio of close to 40% for the last 20 years.
V i e w
While the publication business brings in stability to the P&L, the stationery
segment also has scalability. Going forward, the company expects both
segments to contribute equally to the  topline. The e-learning initiative of
the company will also boost the revenues once it gains critical mass

conference call :: Q1FY12 results of Navneet Publications (India) Ltd.

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


arm research pvt ltd.
invites you for the conference call
for an Overview on Education sector & Q1FY12 results of
Navneet Publications (India) Ltd.
(Sector: Education)
With
Mr. Sunil Gala
(President –Finance)
On Friday, 29th July 2011 at 11.00 Am


Conference Access Numbers:
Single India Number ( Local call anywhere in the country)
1860 266 3376
Toll Free - Option 1
1800 266 3376
Toll Free - Option 2
1800 200 2282
Mumbai
022 2821 3311
Alternate Numbers
Chennai
044 2370 2370
Hyderabad
040 2799 2211
Pune
020 2445 0506
Bangalore
080 2532 6215
Kolkata
033 2559 0707
Delhi
011 2685 2727

Navneet Publications Ltd: Techno

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Navneet is a market leader in the supplementary books segment in Maharastra and Gujarat with ~ 60% share. Its foray into e-learning is a new imitative which will aid both topline and bottomline. At the CMP of `60.9/- the stock trades at 15.6x its estimated EPS of `3.9 in FY12.
Poised for  healthy growth, higher quality of content services for students and its new e-learning imitative we believe the stock is a good investment at these levels and hence advice investors to “HOLD” the stock for a 15% return from current levels over the next 8-12 months.

Transcript - Conference Call of Navneet Publications India ::Arm research

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Transcript - Conference Call of Navneet Publications India Limited

Transcript

Conference Call of Navneet Publications India Ltd

Event Date / Time : 1st February 2011, 12 Noon IST

Event Duration : 46 mins, 04 secs

Presentation Session

Moderator: Good afternoon ladies and gentlemen. I am Sherly, moderator

for this conference. Welcome to the conference call for

overview on Education Sector and Q3FY11 results of Navneet

Publications India Ltd. hosted by ARM Research Pvt. Ltd.

Jointly with Networth Stock Broking Ltd.

At this moment all participants are in listen-only mode. Later,

we will conduct a question-and-answer session. At that time, if

you have a question please press * and 1 on your telephone

keypad. Please note this conference is recorded. I would now

like to hand over the conference to Mr. Aunali Rupani, Director

for ARM Research Pvt. Ltd. Please go ahead sir.

Aunali Rupani: Thank you Sherly. Good afternoon friends. This is Aunali

Rupani here from ARM Research Pvt. Ltd. Thank you one and

all for being part of this conference call. I would like to thank

Networth Stock Broking for co-hosting the conference call.

Today, Mr. Sunil Gala, President Finance Navneet Publication

will take us through the Q3FY11 results. Mr. Ram Kamath,

General Manager Finance will also be present on behalf of the

Company. We at ARM Research believe that the last decade

belong to the “ICE” sector that is, Information technology,

communication and entertainment sector, but this decade will

belong to Education and Innovation – that is innovation in

any field. Education sector is on a high priority for government

of India. Current literacy rate in India is close to 60% and

government wants it to be close to 85% in the next 5 years.

Government in FY09 had allotted close to 26,800 crores to the

K12 segment. In FY11 budget, it was close to 31,036 crores

and an additional 11,000 crores for higher education. This

year (FY12) we estimate that allocation will be close to 34,000

crores to 35,000 crores in the K12 segment and an additional

13,000 crores for higher education. We estimate that the

government will spend close to 50 billion dollars in the next 5

years on the education sector. Let’s see what the private

sector is doing. We believe private sector will spend close to

80 Billion dollars in the next 5 years. An education will throw

many billion dollar opportunities going forward. Currently we

Navneet Publications:Converting knowledge into wealth…: ICICI Sec

Visit http://indiaer.blogspot.com/ for complete details �� ��


Navneet Publications: Converting knowledge into wealth…
We met the management of Navneet Publications to understand the
company’s business and plans, going forward. Navneet Publications’
(Navneet) business consists of two major segments: publishing
supplementary books (educational, children & general books - like
children’s activity books, health books, cookeries, etc) and stationery
products including paper and non-paper based stationery products.
Apart from these two main segments, Navneet is also present in the elearning
space. The classroom teaching software available in CDs
contains animated clips that enable teachers to explain the concepts in
a better way. It also has a retail product that can be used by students at
home.