FROM THE
Chairman's Desk
At Navneet, we fully embrace the transformative potential of the NEP,
recognising its profound impact on the education sector. We see it as a catalyst for
change, given that it advocates for a learner-centric approach emphasising on skill
development, experiential learning, and technology integration.
Dear Shareholders,
I present to you Navneet Education Limited's performance for
2023-24, encapsulated within our Integrated Report.
With a legacy spanning six decades, Navneet stands as a stalwart in the
Indian education landscape. Throughout this time, we have witnessed dynamic and
transformative changes within the education sector. Yet, with each evolution, our
commitment to innovation and staying ahead of the curve has remained resolute.
We have recently demerged the EdTech business of Navneet Futuretech
Limited into its Parent company Navneet Education Limited. This strategic move allows us
to sharpen our focus on delivering comprehensive learning solutions to our student
community. Our aim is to offer 'phygital' learning experiences, seamlessly
integrating our traditional print offerings with innovative EdTech solutions. This
composite arrangement enables us to harness the strengths of both our print and digital
platforms, providing students with a holistic and dynamic learning experience. Moreover,
following this demerger, Navneet has achieved notable financial efficiencies, including
reduced common expenditures. This strategic move has also enhanced our corporate
governance, positioning us for more streamlined operations and sustained growth. We
continue to refine our business structure to better serve our customers and stakeholders,
demonstrating our commitment to operational excellence and responsible management.
Macro Economy
The global economy has showcased remarkable resilience, maintaining
steady growth despite facing various challenges. From initial supply chain disruptions due
to the pandemic to geopolitical tensions between Russia and Ukraine causing global energy
and food crises, and a significant surge in inflation, the journey has been eventful.
Despite gloomy predictions, the world managed to avoid a recession, with the banking
system proving largely resilient, and major emerging market economies navigating through
obstacles. The global GDP growth is estimated to remain stable at 3.1% in 2024, with a
slight increase to 3.2% in 2025.
Contrastingly, while the global economy faced challenges, the Indian
economy has exhibited notable resilience and sustained consistent growth in recent years.
As per the provisional figures released in May 2024, the Indian economy achieved a GDP
growth rate of 8.2% in 202324, marking the third consecutive year of growth rates
exceeding 7%. This robust economic performance is underpinned by sustained consumption and
investment demand. Favourable government policies, such as the production linked incentive
(PLI) scheme, have significantly benefited the manufacturing sector.
As of January 2024, they had propelled exports to surpass Rs. 3.20 Lakh
Crores. Additionally, the focus on infrastructure and technology is expected to drive
India's trajectory of technological innovation. In a historic move, the government
has allocated over Rs. 73,000 Crores for school education in the Interim Union budget of
2024-25, marking the highest- ever allocation for the Department of School Education and
Literacy. This reflects the government's commitment to strengthening the education
sector amidst India's economic progress.
Evolving Education Landscape
Education is a crucial investment in human capital, significantly
boosting a nation's economic growth and development. The Indian government has taken
numerous initiatives to improve India's education sector. The introduction of the NEP
2020 marked a significant milestone in India's educational landscape. It signalled a
transformative phase focussed on elevating teaching standards, fostering skill
development, and ensuring universal access to education.
Aligned with the NEP's vision of achieving a 100% Gross Enrolment
Ratio for students from pre-school to secondary education by 2030, this initiative
reflects a commitment to providing quality education to every child in the country.
At Navneet, we fully embrace the transformative potential of the NEP
recognising its profound impact on the education sector. We see it as a catalyst for
change, given that it advocates for a learner-centric approach emphasising on skill
development, experiential learning, and technology integration. Moreover, the
policy's focus on early childhood education and foundational aspects resonates deeply
with our core values and product development ethos at Navneet.
Through our renowned customer brands like Top School, Top Class,
TopScorer, and BeMasterly, we are committed to aligning our products with the objectives
of the NEP These brands are not just educational tools but comprehensive solutions that
cater to the diverse needs of students, teachers, and parents in today's dynamic
educational landscape. Moreover, we are currently exploring opportunities within the
digital sector to foster organic growth. In this pursuit, we will be initiating the launch
of our EdTech products soon. Building EdTech products that fulfill the requirements of our
diverse student community requires considerable time and effort. This innovation will not
only help us adapt to the needs of our students but also help Navneet build a strong
reputation in the EdTech business. As we progress, we're closely attuned to the
growing adoption of AI to streamline our product development processes. We plan to
incorporate elements of AI technology into each of our publication products. This will
enable us to elevate the overall user experience and functionality, especially in terms of
interactivity.
Financial Performance
Our publication business encountered various challenges due to external
factors. These included lower-than-anticipated off-take of channel inventory, an
unprecedented increase in paper prices, and a surge in the sale of second hand books due
to no major changes in the curriculum for the last six years. Despite the challenging
environment, the Company demonstrated resilience and reported similar sales compared to
the same period last year. For 2023-24, our standalone revenue from operations grew by
3.5% to 7 1,69,310 Lakhs, compared to 7 1,63,641 Lakhs. Absolute EBITDA for 2023-24
stood at 7 31,300 Lakhs, with an EBITDA margin of 18.5%. Additionally, PAT stood at
7 18,853 Lakhs, while PAT margins stood at 11.1%.
In the past year, branded stationery products experienced notable
growth in the Indian domestic market. This surge could be attributed to favourable macro
economic conditions, including rising disposable income, improving literacy rates, and the
implementation of government initiatives such as the NEP and Sarva Shiksha Abhiyan.
Additionally, reputed players like us have contributed to this momentum through strategic
brand-building initiatives. Our stationery segment has firmly established itself in both
the paper and non-paper categories. Our domestic business witnessed growth of
approximately 7%, reaching 7 40,582 Lakhs. We maintain an optimistic outlook for our
domestic stationery business, anticipating continued strong traction in FY 2024-25, with
growth projected to be between 12% and 15%. This can be attributed to the rise in demand
for premium and branded stationery among customers. As we progress, Navneet is set to
introduce new and innovative stationery product categories within the domestic market.
Additionally, we are actively expanding our export offerings, responding to strong demand
for a diverse range of stationery products. This expansion is supported by significant
investments in land, machinery, and R&D, which equip us to overcome any challenges in
raw material pricing and maintain our competitive edge. We expect to see the fruits of
these efforts starting next year.
Our export stationery division has consistently delivered strong
results due to a robust reputation and strategic partnerships with major retail outlets in
the US and around the world. These partnerships, built on trust and reliability, have
further solidified our presence in the international market. Leveraging the China+1
strategy and other in-house initiatives aimed at introducing new non-paper products for
our clients is further expected to yield significant dividends for the Company.
Additionally, while one of our product categories is currently under evaluation for
potential anti-dumping duty in the US, we anticipate servicing orders from this category
in 2025, as necessary arrangements have already been made.
Strategies
As we look towards the future, we are proactively preparing to meet the
evolving needs of the education sector through strategic initiatives across all our
business segments. With growing disposable incomes, we have observed a consistent trend of
schools transitioning from state to CBSE schools. Acknowledging the potential of the CBSE
board, particularly in terms of its high digital adoption compared to state schools, we
are intensifying our focus and investment efforts on expanding our range of physical and
digital products tailored to the CBSE curriculum. This includes the development of new
physical books, digital versions of text books, and digital platforms to enhance the
learning experience for CBSE students.
Simultaneously, we are closely monitoring expectations of curriculum
changes for the state board publishing business in Maharashtra and Gujarat. This will help
in ensuring that our offerings remain relevant and competitive.
In addition, we continue to leverage local procurement for paper raw
material sourcing, ensuring stability and resilience against global disruptions. This
strategic approach has shielded us from global supply chain disruptions, ensuring
continuous production and delivery of our products. This stability serves as the
cornerstone of our operational resilience, empowering us to meet customer demands
efficiently and reliably.
To fortify our position in the stationery segment, we are expanding our
product range with over 100 new SKUs in paper-grade products and exploring opportunities
in non-paper stationery to diversify our offerings. Our focus on new-age stationery
products within the domestic market reflects our commitment to staying ahead of evolving
consumer preferences and market trends.
Furthermore, we are capitalising on the increasing demand in our export
segment. We leverage inquiries to enhance margins and expand our international presence by
innovating and introducing new product categories in both paper and non-paper segments.
This proactive approach, coupled with investments in R&D and strategic capital
expenditure, positions us for sustained growth and innovation in the long term.
In response to supply chain constraints impacting the US market, we are
swiftly navigating challenges tc mitigate any slowdown in internationa exports.
Additionally, we are mindful ol the impact of freight costs and supply chain constraints
on export business growth. We are implementing measures to optimize operations and
maintain momentum.
In Conclusion Drawing upon our extensive knowledge and expertise in the
education sector, our mission is to cater to the learning needs of our students and
empower them with the essential skills and knowledge to exce in an ever-evolving world. I
eagerly anticipate significant advancements in the education landscape, which are
imperative at this juncture.
I am confident that Navneet will consistently rise to the occasion by
offering innovative products and learning solutions.
In closing, I extend my heartfelt gratitude to all our stakeholders,
our valued customers, dedicated employees, supportive shareholders, and esteemed investors
for their commitment to Navneet's journey.
We eagerly anticipate your continued support as we strive to make a
meaningful impact in the realm of education.
Thank you,
Kamlesh S. Vikamsey Chairman