Navneet Educat.

Navneet Education Limited reported a stable revenue of ₹394 crores for Q4 FY26, compared to ₹389 crores in the prior year. However, the full year FY26 performance saw a reduction, with revenue at ₹1,683 crores against ₹1,733 crores in the previous year, marking a 3% contraction. This decline was attributed to global macro headwinds^🌐, intense regional competition, changing text landscapes, and shifting global trade policies, particularly due to tariffs in the U.S.

The publication division delivered a stable full year revenue of ₹719 crores in FY26. Management expressed strong optimism, anticipating a highly lucrative growth phase between FY27 and FY29. This growth is expected to be driven by sizable curriculum changes in Maharashtra and Gujarat, where the company has a strong foothold. Historically, such transition cycles trigger healthy double-digit growth, with expectations of around 15% growth in the first two years (FY27-FY28), which is projected to boost operating margins.

The domestic stationery business grew by 4% in value to ₹366 crores in FY26, with a notable 6% volume growth, indicating robust consumer demand despite downward trends in global paper prices and intense pricing pressure. To secure long-term market dominance, the company plans to invest heavily in nationwide branding (₹30 crores in year 1, ₹40 crores in year 2) and expand its non-paper stationery portfolio. These strategic investments are expected to cause short-term margin pressures but are considered vital for future growth.

The export stationery revenue experienced a 10% decline in FY26, which compressed the divisional stationery EBITDA margin by 3%. This was a direct result of tariff challenges in the United States. To maintain business continuity and market share, the company deliberately reduced pricing. While partially offset by favorable exchange rates, the overall impact was negative. However, with better clarity on tariffs, the company anticipates export revenues to gradually get back on track, targeting single higher-digit growth of around 8-9% starting from FY27.

The company has made strategic capital adjustments, including putting its UAE manufacturing project on hold due to geopolitical tensions, with minimal investment made to date. Simultaneously, Navneet has successfully invested ₹65 crores (including land) in a new state-of-the-art manufacturing facility in Southern Gujarat. This plant is designed to cater to new product categories for both domestic and export markets, with an expected asset turn of 2x in the second year and 2.5x thereafter.

Indiannica reported a net sale of ₹42 crores and a PAT loss of ₹16 crores for FY26. The combined CBSE revenue (Navneet + Indiannica) for FY26 was ₹64 crores, down from ₹70 crores in FY25. To address its performance and achieve synergies, the company has decided to merge Indiannica with Navneet, pending regulatory approvals. This merger aims to reduce duplicated costs, improve logistics, and consolidate efforts for the Central Board curriculum, which is expected to benefit the company's overall profitability.

Management confirmed that curriculum changes in Maharashtra and Gujarat are certain and will drive growth. They also clarified that the company maintains very low inventory of old syllabus items (less than 1% of total revenue). Proactive measures were taken to reduce printing of old syllabus books in anticipation of government announcements, effectively mitigating the risk of inventory write-offs due to curriculum changes.