Prabhudas Lilladher is bullish on Navneet Education has recommended buy rating on the stock with a target price of Rs 146 in its research report dated October 15, 2018.
Prabhudas Lilladher's research report on Navneet Education
In our recent interaction with Navneet Education Ltd (Navneet) management highlighted that 1) license fee conundrum is over post receipt of approval from Maharashtra State Board on 21st June 2018 2) the core publishing business is on track with impending syllabus changes (see exhibit 1) in Gujarat & Maharashtra 3) domestic stationery business is facing stiff competition from ITC but exports are gaining traction and 4) ILL transition is on track as 7 new series for standards 1 to 8 (56 titles in all) have been launched. Further, Navneet is investing in businesses of future like E-sense (digital learning venture) and school management, which will start contributing meaningfully over the next 2-3 years.
Outlook
We believe recent correction in stock price (~25% since our last update) and valuations at 15.3x FY19E and 13.3x FY20E EPS make the stock attractive from long term. Upgrade to BUY with a TP of Rs146 per share (Rs161 earlier).
For all recommendations report, click here
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