Navneet Education Limited (NSE: NAVNETEDUL) Q2 2025 Earnings Call dated Nov. 08, 2024
Corporate Participants:
Mr. Sunil Gala — Managing Director
Analysts:
Viraj Kacharia — Analyst
Rishab Shah — Analyst
Sonaal Kohli — Analyst
Megh Shah — Analyst
Amit Khetan — Analyst
Niraj Mansingka — Analyst
Ariel — Analyst
Madhur Rathi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to Navneet Education Limited Q2 FY ’25 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]
I now hand the conference over to Mr. Sunil Gala, Managing Director from Navneet Education Limited. Thank you, and over to you, sir.
Mr. Sunil Gala — Managing Director
Thank you to you also. Good afternoon, ladies and gentlemen, and a warm welcome to everyone present today on the call. Along with me today, I have Kalpesh Dedhia, our CFO; Roomy Mistry, our Head IR; and SGA, our Investor Relations advisers. I’m sure you all would have received us or seen the results and an investor presentation — so I thought all if someone has not, you can view it on the stock exchanges on the company’s website. Before I discuss about the results I should mention here that the Board of Directors in its meeting declared interim dividend of INR1.50 per equity share, representing 75% of the face value of INR2. So now coming to the half yearly results.
The performance has been steady at INR1,055 crores, very marginal increase from INR1,053 crores in the same period last year. Of course, the EBITDA did improve, reaching to INR236 crores compared to INR219 crores in H1 ’24. Let me talk about the respective businesses. First, on publication business, the publication business is encountered a marginal contraction in revenue, which stood at INR498 crores as compared to INR504 crores half yearly. In publication segment, I should mention here, as you all know, there is no curriculum change implemented yet. But the courses were reduced by the state government for few of these subjects and accordingly, changes in associated redesign of certain products and the selling price were reduced accordingly.
This impacted our sales realization, but overall, there is a marginal increase in volumes compared to the previous year. And thankfully, for last two years, I’ve been rather cribbing about paper prices, but thankfully, the paper prices are stable now post reduction in the last six months. On stationary business, first, I’ll talk about domestic that even there revenue stood at INR173 crores versus INR189 crores. The decline was mainly due to product repricing, as I just mentioned about the publications. The decline was mainly due to product repricing following a reduction in raw material cost. However, on an absolute basis, we observed marginal growth in volumes across various categories. Additionally, domestic sales faced some challenges due to slower than anticipated movement of channel inventory in key markets.
Now to boost sales momentum in the domestic market for the remaining year as well as for the future. We are expanding our offerings within the present categories and a very advanced stage of planning to introduce new product categories in non-paper stationary. On stationary exports, our export business continued to grow. It is fueled by increasing demand for both traditional paper-based products and new nonpaper items.
Revenue for the period reached INR390 crores versus INR358 crores in the same period last year. In the export market, in particular, we introduced new product categories across both paper and nonpaper segments — and we have started receiving promising inquiries, including interesting products evaluated for ADD that is antidumping duties. So this is basic information on the businesses, and I would rather spend time more on Q&A instread of me talking more about the company.
So thank you all, and now I open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. Yeah. We will now begin the question-and-answer session.[Operator Instructions] The first question is from the line of Viraj from SiMPL. Please go ahead.
Viraj Kacharia
Yeah, hi. Thanks for opportunity. Just a couple of questions. One is, if you can just give some perspective on price versus volume impact, both in publishing and stationary. And typically, how do we arrive at pricing in each of the business, given the lower RM prices, should we expect from an ore for us going forward. Okay. Yes. So on price and volume, so in publication business, we normally do not have to reduce the price on account of reduction in raw material prices. But as I just mentioned, that we had to reduce the size of the book because government also for a few of the subjects reduced the curriculum and accordingly, we had to reduce the size of our book. With the reduced size of our book, we have to reprice. We can’t keep the same price as it was earlier. And therefore, though, as I said, volumes rose but the realization reduced. So in terms of volume, overall, we have seen incremental of 4% volume increase, but there was a reduction of around six-odd percent in terms of volume of a product size of a product, and therefore, the price decrease was on account of that. So around six-odd percentage, we had to reduce the price. And your question, let me complete how do we arrive at the pricing of a product. So normally, it is always cost plus basis for both publications and stationery. Only thing in publications, we always are selling the content and paper is a medium. Therefore, we really need not reduce the prices immediately on reduction of paper prices. And in any case, we have to consider same pricing for the one academic year. So we never touch the price of our book, even if raw material prices have reduced or probably have increased. So either case, we do not very much on publications. But in stationary, particularly it is type of a commodity product, where there are huge unorganized sector also in the field. So as and when the fluctuation in paper prices are there, we have to adjust our MRP or if not MRP, if we can’t do that, then we trade discounts, either one of that we have to do. Just one follow-up on this. In publication, in the past, you talked about second-hand market being a way each factor which has impacted the volume recovery to see the pre-COVID levels. Given where the RM prices, I understand for the year, we may not change, but say going into next year, would we be looking to kind of maximize volume and share those low paper price gains in the market? Or how are we looking to play this.
Mr. Sunil Gala
No. So believe me, because the value of the pricing will be lower, there will be higher offtake of the products is never a case and vice versa. And therefore, the volumes will increase only and only when we see curriculum changing. Without that, whatever additional efforts that we may do, we may see a single percentage increase in volumes, but not large increase in volume. So volume will not increase even if paper prices are low and our pricing of a product is lower.
Viraj Kacharia
Okay. Just more questions and I’ll come back in queue. One is in the publication, what will be penetration of digital offering in terms of sales indicatively?And what kind of investment or losses will be having in P&L now?
Mr. Sunil Gala
So first of all, now we have really not focused rather are focusing on just only digital business because now each and every book of ours has some digital components. So whether digital activities that we are doing whether it is doing for a book business or whether it is doing for an independent digital activity is very difficult to bifurcate, therefore, we have clubbed it in our content business or a publication business. But generally, I would say that earlier that — on a yearly basis, last year that we would have lost around INR30-odd crores broadly on digital business. This year, that loss may come down to around INR15 crores.
Viraj Kacharia
Okay. Got it. Got it. And last question was on the stationary business margin. See, I understand the domestic stationary, given the rate unorganized market is you would have to share the gains in the raw material prices. But in exports, what we think that we would be — given most of these contracts with the fixed price contracts, you will be seeing some benefit of no prices? And even from a mix point of view in this quarter, the way mix has laid out, one would have expected the margins to improvement and good profit growth, but that has not happened.
Mr. Sunil Gala
So in reality, in exports business, we have seen improvement in margin because of the reason that you just mentioned. But because in domestic, the volumes or the sales reduced versus our expenses remained the same, including inflationary expenses. And therefore, when we combine both businesses, exports and domestic, you see little reduction in margin. But independently, if we see, then exports have benefited.
Viraj Kacharia
Okay, I’ll come back-in queue. Thank you.
Mr. Sunil Gala
Yeah.
Operator
Thank you. [Operator Instructions] The next question is from the line of Rishab Shah from Rock PMS [Phonetic] Please go ahead. Sorry, sir, why is not audible. Can you speak little louder, sir?
Rishab Shah
Yes. So my first question is, what is the progress on the CBSE textbook business in this year? And how many approached this year and also the increase in the number of schools where our books are going that prescribed in the current year versus the last year? And how good was the acceptance of the new titles, which we wish to introduce in this year?
Mr. Sunil Gala
Sure. So the CBSE book business cycle itself is in the month — by the month of October, we are ready with titles, then we start marketing of these books across all the schools in the country to our target schools. So at present, as we speak, the marketing initiative or marketing activities are on. And therefore, the final understanding of how many schools have accepted or placed in order we would know by mid-January.
And therefore, we always see fourth quarter being the strongest quarter for CBSE book business. So as far as titles are concerned, I can — I’m very happy to say that titles are quite well accepted. There are no complaints at all on our titles. And as far as number of schools are concerned, so I’m saying at the group level, we were almost reaching 8,000 schools — and this year, the target is to reach 11,000 schools. And of 8,500 schools, we had received order from around 4,700 schools. So this year, our target is to at least get in orders from 6,000 schools.
Rishab Shah
Okay. Okay. And sir, my second which is even in Navneet brand umbrella, we were doing the rise and for CBSE. How is that part of business doing? Also, how many new schools we would have added for CBSE textbooks in Navneet brand?
Mr. Sunil Gala
Yes. So I therefore mentioned about earlier about Navneet group. I did not just mention about Indiannica. So when I mentioned about INR8,500 or 11,000 or 4,700 versus 6,000, I’m saying at a group level, be it Navneet or be it Indiannica. But coming to specific to Navneet the revenue from CBSE schools would grow by around 25%, 26% over last year, which was around again, in terms of rupees, it was around INR25 crores.
So that will grow by 25% to 30%. So overall acceptance in Maharashtra and Gujrat both And therefore, we are very sure that at the year-end, we’ll see that growth coming to Navneet independently. But generally speaking, what I just mentioned earlier about overall as a group, how many CBSE schools are we targeting were the numbers that I mentioned.
Rishab Shah
Okay. And sir, my third question is one issue we faced last year was Indiannica did not have a technology solution, and that gave us a setback. So can you give what do you do to improve the thing this year?
Mr. Sunil Gala
So we improved on the quality of digital content for each of our titles. And we have not yet though completed the classroom solution as we have it in Navneet. We have not completed that fully for Indiannica.
But the digital component majorly used through QR code, where we were facing challenges or acceptance was a little low that we have improved everywhere — and therefore, we are quite hopeful that this year, the acceptance will be better. We still do not have classroom solution for Indiannica books, which is not fully ready.
Rishab Shah
Okay. Okay. Okay. Thank you so much, sir.
Mr. Sunil Gala
Thank you.
Operator
Thank you. The next question is from the line of Sonaal from Bowhead. Please go ahead.
Sonaal Kohli
Hello, Mr Gala, everybody in the team.
Operator
Sir, can you speak really louder please?
Sonaal Kohli
Am I audible now?
Mr. Sunil Gala
Yes, Sonaal, you are.
Sonaal Kohli
First, I wanted to understand, you alluded to lower pricing because the volume declined. So when did it start getting implemented? And when did you get a color on this?
Mr. Sunil Gala
As far as publications are concerned, we did realize that because we reduced the size of our book we did — and I recall having discussed a bit in my last con call also that we had to reduce the price of our book because we reduced the size of our book. So that we knew well in advance. But as far as domestic statutory market is concerned, that could — we have to play with the market dynamics.
So probably in the month of June when actually season started or the offtake started. So June and July was a period where we had to increase a little bit margins because the books were — the products were already reduced, so we had to increase the margin, and therefore, sales realization came low.
Sonaal Kohli
So sir, broadly, I mean you had a very aggressive guidance for domestic stationery. What’s your new realistic guidance for domestic stationery for this year?
Mr. Sunil Gala
So as far as volume growth is concerned, we are still confident of growing it by 15% volume. But in terms of value, because of around whatever reduction of pricing that we had to take on our books. So net-net, the now as a value growth will be hardly low single digit.
Sonaal Kohli
Okay. How much cut is in the private domestic stationery roughly, 10%?
Mr. Sunil Gala
10% to 12%.
Sonaal Kohli
Okay. And will you be able to maintain your margins or the price cut is more than the paper price.
Mr. Sunil Gala
So no, no, price cut is not more than the paper price. But Sonaal, we have to understand the similar answer that I will give if really value-wise, if we do not grow much, then — but obviously, it is going to affect our EBITDA margin because of the fixed operational expenses that we have. So that is little concerning. So our endeavor is right now to grow in value terms also, but having seen the situation on the ground we believe volume-wise we’ll be able to grow. But overall value-wise also on an annual basis to grow will be in a single digit, it can’t be more.
Sonaal Kohli
And sir, in terms of export stationary, what is the outlook there for this year to around ’25 using the first half is already gone by.
Mr. Sunil Gala
Yes. So now, again, being back-to-school season ordering will start from November till January, overall inquiries are really very good. And thankfully, a couple of products which were not bought from us because of the anti-dumping duty that also now the same buyers are saying that we don’t mind buying from India now.
And therefore, we are seeing a very good year, not for the remaining year, but in a subsequent year also. So that the new products that we have introduced also have been well received. So overall, we should see a good growth in the fourth quarter as well as the next full year.
Sonaal Kohli
Okay. And sir, as far the publication business is concerned, would any course correct some change in ’26? Or as of now, I mean it’s sit early for you to know for sure.
Mr. Sunil Gala
No. So as far as Gujarat is concerned, they have already announced around instead of just focusing on a grade their focus right now on subjects. So they have announced around 15 different subjects from Grade one to Grade four to change the curriculum. So that is the clarity we have, it is already published by the state government. As far as Maharashtra is concerned, they are still maintaining that grade one and two, they will change.
But in hindsight, we believe that they are still not ready maximum Grade one will be changed that’s our gut feel, but they still maintain that they will change for Grade one and two both.
Sonaal Kohli
And sir, Grade one to four for Gujarat is next year or over a period of two years?
Mr. Sunil Gala
No, no, next year, ’25, ’26. So these are not grade four, I said. I said 15 subjects in those grade four. From Grade one to four, there are different, different subjects. So 15 titles, they are changing the curriculum, not all.
Sonaal Kohli
Like how many titles would be there between on and 4? Like this would be what percentage of the total…
Mr. Sunil Gala
Around 50% of the total.
Sonaal Kohli
50%, okay. one to four. And sir, lastly, you said something other thing about end dumping duty, I could hear you.
Operator
I’m sorry to interrupt, sir. Can you just join the queue?
Mr. Sunil Gala
Let him complete the last question, please.
Sonaal Kohli
Sir, so you have mentioned about something about antidumping duty in the call. I could not fully grasp it. Can you please explain it again.
Mr. Sunil Gala
No. So last year, if you recall, we had a little reduction in sales, then, of course, though it had grew, but there was a reduction in sales on account of an anti-dumping duty on one category of our product last year in the same period. That business, of course, we have got back. But again, just now I did mention that the customers are quite happy and have shown their interest to buy certain products even though there are antidumping duties, which are in a single digit from India. And if it is from India, Navneet should benefit out of that.
Sonaal Kohli
Understood, sir. I’ll come back-in the queue. Thank you.
Mr. Sunil Gala
Sure.
Operator
Thank you. The next question is from the line of Megh Shah from Prospero Tree Financial Services. Please go ahead
Megh Shah
Yeah. Sir, my first question is, which will be the growth trigger for the company because the company is engaged mainly in the two business publication and stationery. And in publication we are restricted only to — mainly for the two states, Gujarat and Maharashtra. Is there any plan to enter into any more state or any other state of the India or because the stationery we can sell globally, but in — because of we are publishing syllabus-based books and study materials. So currently, we are restricted to two steps. Is there any plan? And which are the trigger for the future?
Mr. Sunil Gala
Yes, yes, partly, you’re right. Partly I need to inform you, which is now in publications, though largely a large business from for us is from state board curriculum restricted to Maharashtra and Gujarat. But now even CBSE business, that is all India business. From Navneet parent company and from its subsidiary, we are already doing business of around INR80 crores, INR90 crores, and that business is likely to grow faster going forward because of the more and more number of schools growing in the country.
So now it is just not restricted to Maharashtra, Gujrat. We have already expanded in other category, which is textbook category all India. And — but to answer your first basic question or biggest growth driver there for at least next two years, I foresee it will be stationary that will be growing much faster than the publication business.
Megh Shah
And the CBSE business is through Indiannica earlier, I think we were through…
Mr. Sunil Gala
At present, 60% of the business is from Indiannica. So Indiannica has there its own title, Indiannica is very strong in Northern Belt and Eastern Belt, whereas in Navneet, we are very strong in, again, the same markets, Maharashtra and Gujurat and partly in Karnataka. So those titles are different in both the companies and the focused markets are different.
But as a group, what I would rather foresee is that how much business are we bringing from CBSE textbook business in the group. So overall, 60% at present comes from Indiannica and 40% from Navneet. And for the stationery business, it is the export business, which will drive our growth? Yes. So in volume terms, even domestic is likely to grow. But in overall value and volume terms, export will be much faster than domestic.
Megh Shah
Okay. And sir, just you have mentioned that there is a core standard one to four in the Gujarat, there is some changes in the syllabus for some subject of some textbook. Then what will be the impact likely impact on our business?
Mr. Sunil Gala
So Gujarat business, which is almost 50% of our total state board business that we have, that will have see a growth of at least 10% with this change.
Megh Shah
1%. Okay. Okay. And sir, is there any plan to further sell the stake in the school business?
Mr. Sunil Gala
Growing the other states you mean?
Megh Shah
No. stake sale. See, only remain the Q1.
Mr. Sunil Gala
Stake sale of K12 you’re saying.
Megh Shah
Yes.
Mr. Sunil Gala
No, no immediate plan on that?
Megh Shah
Okay. Okay. That’s all from my side. Thank you, sir.
Mr. Sunil Gala
Thank you.
Operator
Thank youThe next question is from the line of Amit Khetan from Liberum Capital.Please go ahead.
Amit Khetan
Hi, thanks for taking my question. Sir, can you just call out what was the volume growth in domestic stationery for the first half?
Mr. Sunil Gala
It was 3% growth in volume.
Amit Khetan
So if I go by your presentation where you mentioned 12% to 15% volume growth for full year, that implies that in the second half, we are looking at something like a 20% volume growth?
Mr. Sunil Gala
Yes. Yes. Yes. Accordingly, new product categories in products have been already planned and accordingly, this estimation is there.
Amit Khetan
Got it. Got it. Secondly, what is the outlook on paper prices? Do you expect further softening of paper prices? Or do you think it will be stable.
Mr. Sunil Gala
Very difficult now because I think now paper mills will go under losses if they reduce further. And therefore, I foresee though they do not have orders and they are trying to get orders at any cost, but much reduction from here is not seen.
Amit Khetan
Got it. And do we use domestic paper or do we import — are imports cheaper for us.
Mr. Sunil Gala
No. So around 5% to 7% of our consumption is from import of paper, but rest all is domestic.
Amit Khetan
Understood. Thank you. Thank you all.
Mr. Sunil Gala
Thank you.
Operator
Thank you. The next question is from the line of Niraj Mansingka from White Pine Investment Management. Please go ahead.
Niraj Mansingka
Hello. Sir. Thank you for the opportunity. I have one question on the Stage three product that launches you are trying to do. Can you give some color on what launch products you’re launching in India? And can you also give some color on the new products that you are trying to get into in the domestic market?
Mr. Sunil Gala
So on domestic market, I will not be able to exactly mention which all finally, products that we’ll be launching because we are at a time very advanced stage of discussing a couple of categories, but we have not finalized which category we launched in the current year. Therefore, I may not be able to answer you that.
But as far as exports market are concerned, last year only, we had introduced products made out of metal, which is for office use, then there are plastic folders and plastic molded stationary items. So these are the items that we will start getting sales from. For metals, we have already got the sales. But for the other two items I mentioned, that we will see first sale going in from us in the last quarter, and then it should start growing there on.
Niraj Mansingka
And sir, last question on can you give some color because — on the excess exports for all, can you give some color what is your status right now and how do you see the performance?
Mr. Sunil Gala
So performance wise, they are doing quite well, and they are in the midst of raising further fund because they have great opportunities going forward. I would say company is doing as far as the performance is concerned in terms of implementing various programs, they are doing exceedingly well. As far as numbers are concerned, they are not as attractive today, but as every start-ups would have the challenge of cash crunch as well as the initial losses that they are — because they are in the building phase, building the business, and therefore, there are losses.
But on the execution front, wherever they have gone are very, very well appreciated, be it the contracts that they get or be it the championships that they arrange in 10 states as of now, very, very well accepted.
Niraj Mansingka
Okay, thank you.
Operator
Thank you. The next question is from the line of Ariel [Phonetic] from Bowhead. Please go ahead.
Ariel
Hi, sir. My question would be what is the margin you are expecting in publication and stationary business this year compared to last year?
Mr. Sunil Gala
So margin in publication should be around 30%, 31%. And in stationery, it should be around between 12% and 13%.
Ariel
And what would be your expectation for next year? Will it be at middle level only or higher.
Mr. Sunil Gala
It will be higher on two counts. One, these margins in the current year also had higher cost inventory, which was used during our production, which will not be the case next year. So that is part one. Part two, because of few curriculum change publications, definitely, there’ll be volume growth. And with volume growth, the operational expenses do not grow in the same line and therefore, additional margin. And in stationary business also similar story that there also margins should improve next year.
Ariel
And sir, this year, I think we in cash flow statement, there was mentioned like a INR50 crore loan was given to other. So I just wanted to understand whom this loan is given to, and this is per what proper.
Mr. Sunil Gala
So it was — we had an excess money today, and we have given loans for a short period to a very strong party. And therefore, that should come back by January.
Ariel
Okay. And on export, I wanted to ask like how is the capex going on? What is the capex you plan to do this year and next year? And when will — I think you are already seeing the sample. So when there is an order tax the new at?
Mr. Sunil Gala
Orders, we will come to know only by mid Feb that how many new orders are for the new items that we have out — this is the right period at present, we have started negotiation or discussion with the buyers and with the normally finalized between 15th January and 15th February, so by then, we will come to know.
As far as investments are concerned, one investment that will come in the books, which is as of now shown as an advanced money for land, that will be — that will come in the books in the third quarter or fourth quarter by — as by way of addition in fixed assets of land that would cost around INR40-odd crores.
As I just said, the monies have already been paid by way of an advance. It is just an execution of which was spending that will get over in this quarter or next quarter. But with respect to additional facilities that we are building for particularly exports of business. So this year, again, — we should be — we already spent around INR12 crores on buying a land in Gujarat and construction is on. So we should be spending around INR30 crores on construction.
So altogether, with land, it will be INR40 crores, INR42 crores of investment, additional investment in the current year.
Ariel
And then next year, what are we planning to do.
Mr. Sunil Gala
Next year, of course, the first item that I just mentioned, that INR40-odd crores, which is shown as advance will get converted to land now in this quarter, where we plan to further increase the capacity, both manufacturing and storage — and for that, we may end up spending between INR50 crores to INR60 crores.
Ariel
Okay. And sir, my last question would be I wanted to ask like what is the seasonality in take business price and like which quarter has the highest share of revenue?
Mr. Sunil Gala
It is similar. So now tech has two components. One is for state curriculum. So there, the highest revenue will come in the first quarter and the CBSE curriculum that will come in the fourth quarter. So — and normally, fourth quarter and first quarter, you will see good results majorly would be first quarter where it is quite much established. So first quarter will be the best next will be the fourth quarter.
Ariel
Okay. Thank you.
Operator
Thank you. The next question is from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead.
Madhur Rathi
Thank you for the opportunity. Sir, I wanted to understand that in our stationary segment, we have guided —
Operator
Can you speak a little louder, sir?
Madhur Rathi
Yes. Is it better right now?
Mr. Sunil Gala
Yeah.
Operator
Yeah.
Madhur Rathi
Sir, I wanted to understand that in our stationary segment, we have guided a 100 bps increase in margin. But again, due to price reduction, it was be possible for this year. So expect some kind of margin benefit for this financial year? And can you expect that 100 bps to come in the next financial year or even that looks a little right now?
Mr. Sunil Gala
So as we expect, there will be higher revenue growth in exports business with a higher margin than last year versus a little lower growth than expected in domestic market with lower margin because top line is not increasing much versus our operational expenses are more. I still maintain that this year, we will have a little better margin than last year but not as expected. But next — come next year, I think with further volume growth in the business, we should see further margin growth.
Madhur Rathi
Sir, and we quantify about how much in would be a…
Mr. Sunil Gala
Quantifying would be it is so dynamic scenario month-on-month basis to quantifying exact number would be difficult for me.
Madhur Rathi
Sir, I have a second question on the CBSE revenue. So you mentioned about the revenue on the CVS school here INR25 crore in FY ’24. And we are currently on a INR80 crore to INR90 crore and in the CBSE, what is the incremental revenue that is coming into in the INR25 crore in FY ’24 from the CBSE school.
Mr. Sunil Gala
So as I mentioned, it will be — if we talk about total business, then we should grow by 15%. But if we talk of stand-alone nominate business, CBS business, then it will grow between around 20% to 22%. So overall, on INR85 crores that we had, we should grow around 15% to 17%.
Madhur Rathi
Like I understand that our basis around 15, 17 but Sir, INR25 crores is coming from the school business. And the rest is coming from the publication business is that understanding correct?
Mr. Sunil Gala
No, no, no. INR25 crores school business, there’s no revenue of school business in this company. Let me explain. At the group level, now be it our subsidiary, Indiannica or Navneet a parent company. Both put together, we do a CBSE textbook business of around INR80 crores, INR85 crores. Around INR45 crores to INR60 crores comes in Indiannica, which is our subsidiary and the balance comes in Navneet. I was talking about that number.
Madhur Rathi
And sir, the second comment would be sort of out of — I guess we got orders of 4,700 school in FY ’25 and for this year I mean from we are in but you growth is very at a level of 49 are increasing by 2020. And so similar fall field revenue looks quite low. So can we throw out the more revenue at school base the.
Mr. Sunil Gala
Handover to have more and more distant from the — but in India, each and every quality never be 100% in order to one liter, they give to several polishers. And therefore, whatever number probably with the numbers that I have around INR200,000 of per school that we are getting that should grow, that is our always endeavor, but we have convinced school-to-school to grow that business. So — and that efforts are always on.
Madhur Rathi
Sir, can we expect that this school to maybe double over the three to five years with that effort going on marketing…
Mr. Sunil Gala
Of course, of course, yes.
Madhur Rathi
Okay, sir. Sir. Thank you so much and all the best.
Mr. Sunil Gala
Thanks.
Operator
Thank you. The next question is from the line of Viraj from SiMPL. Please go ahead.
Viraj Kacharia
Yeah. Just one follow-up on the publication business. You said 50% of the curriculum change in Grade one to four in Gujrat will be nearly 50% of the Gujrat publication.
Mr. Sunil Gala
No, no, no. What I meant was that if we take normally, normally, if all four grades would have changed all the subjects we would have grown by around 20% just for Gujarat business — because of the revenue mix from Grade one to four, which is around 24% for us, let me explain again, our total book business, 50% comes from Maharashtra, 50% comes from Gujarat. Of that 50%, around 24% would have come if all the subjects of Grade one and four would have changed.
But because 50% of the publications are changing, I said instead of 24% or 20%, we may grow by 10% to 12% in the state of Gujarat. So that is giving us 5% to 6% growth at a company level.
Viraj Kacharia
And for Maharashtra, would there be any positives…
Mr. Sunil Gala
As I mentioned earlier, we have a gut feel that they’ll be able to change only one Grade, which is Grade one that in that additional 5% should come from arrest. So altogether, 5% plus 5%, 10% should come to the group or the company.
Viraj Kacharia
Second question is you said we are looking around 30% EBITDA margin from publications in ’25. Now this is purely for the state board publishing business. I mean the standalone business, are you talking about including Indiannica.
Mr. Sunil Gala
No, not including Indiannica, it is stand-alone business that I was talking about.
Viraj Kacharia
Okay. Understood. So on a blended basis, what kind of margin you’re looking this year.
Mr. Sunil Gala
You mean stationery and publication both?
Viraj Kacharia
Indiannica and stand-alone.
Mr. Sunil Gala
That way we have calculated on the plans but I’ll ask my Roomy Mistry to come back on that.
Viraj Kacharia
Just two more questions. One is the cash position, which you are seeing at September end. Is that largely seasonal in nature? Or you think that there is the working capital…
Mr. Sunil Gala
No, no. It is always the seasonality that shows this number. So if you see past balance sheet numbers of Q2, you will always see bank balances in our books because of the seasonality. This year, additionally, we did receive on account of stake sale, and therefore, we have additional money. So it is this scenario, which is every year, and now as we progress on building our inventory for next ensuing season, we will use first our working — our own money, and then we may borrow for two, three months from banks for working capital.
Viraj Kacharia
So the question was given where the raw material prices are and if you stating that in publications, pricing is not something which we kind of fluctuate every quarter. Is there any thoughts around maximizing the inventory spread in the business going into ’26?
Mr. Sunil Gala
I know whatever storage capabilities that we have, we have already bought additional paper for next ensuing season. But as you understand, paper is perishable commodity, and we really can’t store it anywhere we want. And therefore, we would like to play a little safe inventorizing paper. But nonetheless, we have already made contracts at the present price for good quantity of paper for next three months. So that way, the inventory will start flowing in, but we have already conducted a larger quantities.
Viraj Kacharia
Okay. And just last question was on exports, right? So we have been talking about new categories for some time now. in last two, three years have been incurring capex at home. So just trying to understand one of the orders, which we’re expecting at what stage would this be at? So are these — I mean, are they say that approval stage or you — it’s more about commercial and execution or if you could just give some color and revenue from new products, new categories in the last two, three years in export.
Mr. Sunil Gala
Yes. So first time last corresponding quarter, we did mention about the new categories — and then there also we actually had not invested big money. They’re only invested in small, small machines. Having got good response now we have decided to invest right from land building and machinery in a bigger way comparatively. So our major investment for new categories will go now. It was never done earlier. And as far as the acceptance of these categories, whatever that we had introduced last year, this year, we will definitely see a good jump in there because the product is quite well accepted.
Viraj Kacharia
Okay. So the value proposition still stay if there’s any change in duty structure in U.S., but I’m assuming a lot of this will be driven by customers in the U.S.
Mr. Sunil Gala
Yes. So first of all, there is no single standard duty structure for all categories in stationery. It depends on subcategories is they decide on whether to put antidumping duty or not. And this depends on whether the local manufacturers have the same products available there or not. So only one category, which was hit by NTP that I was talking about that even that category, customers have started saying that even though there is anti-dumping duty of single digit from India, they will buy from India. So that I was trying to explain that or we should start getting orders for that as well.
Viraj Kacharia
Basically for export orders which we’re expecting, basically, we are replacing another imports from another country — so we’re not using a local manufacturer.
Mr. Sunil Gala
Yes, yes. So two ways we will grow. One is replacing the countries by exporting from India. And secondly, adding more and more product category. So we also innovate various products at our end and showcase them in various shows the buyers keep their shows where we display our products. So any new innovative product that we introduced they try out for the first time, and then they start placing orders. So all these categories put together, replacing from other country as well as our new innovated products will help us grow.
Viraj Kacharia
Okay. Good luck. Thank you.
Operator
Thank you. The next question is from the line of Sonaal from Bowhead. Please go ahead.
Sonaal Kohli
Sir, all my questions have already been answered. Thank you.
Operator
Thank you. The next question is from the line of Niraj Mansingka from White Pine Investment Management. Please go ahead.
Niraj Mansingka
Sir, just wanted to again get a reiteration from — you said EBITDA margin of in at 30%, 31%. In the past last three, four years, there case. So do you see an improvement in EBITDA margin because of its industrial or because of the lower paper prices because the contribution margin is higher, you would just some thoughts on.
Mr. Sunil Gala
I fully agree with you. So once our revenue grows by even 10%, our margin improvement should start happening. If revenue since revenue did not grow for last two, three years, there was pressure on margin, even though in the current year, paper prices came down partly to inventory for inventory, but all those was taken away by ever from our operational cost. So because revenue did not increase — but if we grow by 10%, our margin should start improving. So with every incremental percentage, then 50% of that comes to the bottom line.
Niraj Mansingka
Got it. And sir, and the margin, you’re talking of 31 against last three-year average of condition and 5%.
Mr. Sunil Gala
You may be seeing consolidated number, right?
Niraj Mansingka
Yes.
Mr. Sunil Gala
I was talking about stand-alone number. So on consolidated, as I just mentioned to one previous person that we’ll have to work out both Indiannica and Navneet put together about the margins. So I have to come back on that.
Niraj Mansingka
And sir, Indiannica you tell about the growth what is happening because it seems now it’s starting up on the growth side as well, so — and can you share some thoughts on that?
Mr. Sunil Gala
The growth wise, as I just mentioned that — we have good plans in the growing and deeper into the geographies that we are already present — so we are aiming at a higher number of schools, minimum, 25% higher number of schools. And therefore, we should see that type of growth in Indiannica as well in the current year.
Niraj Mansingka
And sir, is it — what is bringing this growth? Is it because you just the product? Or is it because on the CBSE or is it because of the very strong brand in terms of what is…
Mr. Sunil Gala
So the growth First of all, our base is low today, right? INR55 crores, INR60 crores is only the base. Now with every new school except in this we will have growth. The schools where we are already selling products, and I also mentioned in between that none of the schools accept more subjects from a single publisher they buy from various publishers.
So even if additional one title that they accept, then it is an incremental growth for us. So that way, we have a growth possibility not by growing number of schools as well as growing more business with — in the same school.
Niraj Mansingka
Sir, last question on Indiannica, INR25 crores revenue which you had in Indiannica like last year, how many schools do you contribute in that.
Mr. Sunil Gala
INR55 crores, INR60 crores revenue we had INR55 crores, if I’m not mistaken.
Niraj Mansingka
So INR55 crores revenue that we had, how much schools contributed to that?
Mr. Sunil Gala
So altogether, around 3,900-odd schools would have contributed to that.
Niraj Mansingka
And you are talking of around 25% more schools this year.
Mr. Sunil Gala
Yes.
Niraj Mansingka
Thank you very much sir.
Operator
Thank you. The last question is from the line of Niraj Kamtekar from Prospero PMS. Please go ahead.
This participants have the queue. Ladies and gentlemen, due to the time constraint, we will take this as the last question. I now hand the conference over to Mr. Sunil Gala for closing comments. Over to you, sir.
Mr. Sunil Gala
Yes. Thank you once again to everyone of you who have joined the call. I hope I have been able to address the queries to my the stability. If at all any more queries are there, please reach out to our IR consultants or Roomy Mistry. And with that, I would like to close today’s call and wish you all a happy and prosperous new year. Thank you once again for — to all for participating in the call. Thank you.
Operator
[Operator Closing Remarks]