Prabhudas Lilladher has given Accumulate recommendation for Navneet Education with a target price of Rs. 123 in its research report issued on Nov 02, 2021

Prabhudas Lilladher’s research report on Navneet Education

NELI’s results were ahead of our estimates due to swift recovery in publishing & stationary sales amid staggered re-opening of higher grades (8-12th) due to declining COVID cases. Management hinted that publishing & stationary revenue will be better than FY21 and can breach pre-COVID levels in FY23. NELI has lined up aggressive expansion plans in the Ed-Tech space with a target to spend Rs700mn in FY23. It has already launched Digi-Book and Smart-Book and has plans to launch a platform for kids aged between 2-8 years by Feb-22. We believe this is a step in right direction as digital learning is expected to become even more relevant post-COVID.

Outlook

We keep our EPS estimates broadly unchanged and expect revenue/PAT CAGR of 29%/64% respectively over FY21-FY24E. Amid expected normalcy from FY23, strong momentum in exports (25% CAGR expected over 5 years) and renewed focus on Ed-Tech, we maintain our target P/E multiple to 12.5x (no change) and arrive at a TP of Rs123 (earlier Rs122). Maintain ACCUMULATE.

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