S Chand And Company Q3 Results Review - Net Cash Flow Roll Out Begins: Prabhudas Lilladher

Prabhudas Lilladher Report

We marginally cut our earning per share estimates of S Chand and Company Ltd. by 1-2% over FY24E-FY26E amid persistent weakness in the higher education segment and weaker than expected GM of 54.8% (our estimate 65.0%) in Q3 FY24.

Liquidation of high cost inventory and insufficient print runs impacted GM during the quarter. For FY24E, management is guiding for a top-line of Rs 7,200-7,500 million with Ebitda margin of 16-18% backed by price hike, raw material stabilization and increased volumes that would come from net cash flow roll-out.

S Chand has started launching new content based on NCF and adoption rate is likely to be 30-40% in FY24E while full blown impact in the form of higher volumes will be visible in FY25E.

Buoyed by NCF, we expect sales/Ebitda compound annual growth rate of 17%/25% over FY23- FY26E. S Chand trades at attractive valuations of 10x/9x over our FY25E/FY26E EPS estimate and we maintain our 'Buy' rating with a target price of Rs 357 (earlier Rs 362) valuing the stock at 12 times FY26E EPS.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.