40% Potential Growth From This Education Stock, Should You Buy Now?

Prabhudas Lilladher, a leading brokerage firm has asked investors to accumulate share of Navneet Education, as it believes it the stock price would increase by upto 40%. In one, year the stock price of this education stock has rallied by 21%. The analyst of the brokerage house feels that the stock price of the small cap company will touch Rs 148 per share. Check the details below.

Navneet Education Stock to Buy, with a price target of Rs 148 per share

In the analyst's brokerage report from Prabhudas Lilladher, it is seen that the analyst has cut its estimates and downgraded the stock of Navneet Education to 'Accumulate'. "We cut our FY24E/FY25E EPS estimates by 15%/12% and downgrade the stock to ACCUMULATE with a revised SOTP based target price of Rs148 after including per share value of EdTech/K12 businesses at Rs8/Rs19 respectively."

The brokerage explains the reasons for asking investors to accumulate the stock of this small cap education company as, "the management commentary on widening EdTech losses and persistent margin pressure in stationary division is likely to drag profitability. Navneet Education's results were below our estimates with standalone EBITDA margin of 12.2% (PLe 18%) while PAT was aided by revaluation gain of Rs578mn arising from deemed disposal adjustment in K12 business. NELI's core publishing business is facing challenges amid slow migration of students from government to private schools post COVID while RM cost inflation has put stationary margins under pressure. Consequently, we cut our core business target P/E multiple to 10x (12x earlier). Further, we now value EdTech business at 0.8x BV (1x BV earlier) given widening losses (Rs700-750mn in FY24E) accompanied by long gestation timeline to achieve break even. We cut our rating to ACCUMULATE."

About Nanveet Education Limited

The Gala Family founded Navneet Education Limited in 1959 in Mumbai. It operates in three segments: publication, stationery and others. Its products are Navneet, Vikas, Gala, and YOUVA. It prints titles of educational syllabus and non- syllabus for he children and general book categories, which includes board, story, health, cooking, mehendi, and embroidery books. It has published more than 5000 titles in English, Hindi, Marathi, Gujarati and other languages. It is a dominant player in the field of publishing.

For the year ending March 2022 Navneet Education had declared an equity dividend of 75.00% amounting to Rs 1.5 per share. At the current share price of Rs 104.00 this results in a dividend yield of 1.44%. The company's free float market capitalisation is at Rs 841.65 crore.

Stock Movement of Nanveet Education Limited

In last one year the stock price of Navneet Education Limited has rallied by 21% and in three years it has moved up by 20.51% to Rs 104 per share, current market price. The 52-week high is at Rs 151 and 52-week low is at Rs 81.20 per share.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.