Navneet Education Limited (NSE: NAVNETEDUL) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Unidentified Speaker
Sunil Gala — Chief Executive Officer and Managing Director
Analysts:
Neeraj Pansingha — Analyst
Jinesh Josie — Analyst
Amit Ketan — Analyst
Rajan Shah — Analyst
Praneet — Analyst
Neeraj Mansingha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Navneet Education Limited Q3 FY26 earnings call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil Gala, Managing Director of Navneet Education Limited. Thank you. And over to you sir.
Sunil Gala — Chief Executive Officer and Managing Director
Thank you. Good afternoon and a very warm welcome to everyone present on the call today. Along with me I have Kalpesh Dedia, our CFO and Mr. Rumi Mistry, our head at IER. I’m sure you all would have received our investor presentation by now. For those who have not, they can view it on the stock exchanges of the company. Navneet continues to build on strong foundation trusted by generations. Even as we focus on guiding the future through new education technology. Our Q3 performance presents a mixed picture of seasonal weakness in core operations simultaneously counterbalanced by strong performance in domestic stationery and significant exceptional gains.
I will briefly talk about the operational highlights of Q3. So the consolidated revenue declined by 11.3% year over year to 250 odd crore. Primarily due to minimal curriculum changes in Maharashtra and Gujarat and a drop in exports to the us. However, there are key areas of strength and strategic progress which I feel I should let every one of you know. So in domestic stationery the segment performed strongly posting around 21% growth compared to Q3 FY25 expansion and strategy wise we are investing in new facilities and talent for non paper stationery which of course impacts our margins in a short term.
But we are hopeful simultaneously we are hopeful for a resolution to tariff issues impacting exports. We had already informed to these stock exchanges and I’m happy to say that a manufacturing facility in UAE is slotted to be operational by Q2FY27. Now the most important thing which is Navneet AI. Now AI is the buzzword across and every one of you also would be worried about its impact on education and therefore to Navneet. I am very happy to say that India’s first custom made education AI model purely from Indian context has been built by Navneet which is built on one 10,000 plus trusted digital resources specifically designed to empower teachers rather than replace them.
We have not focused frankly on student category directly. We believe if students get ready solution that will impact their overall learning process. So this multi agent platform helps educators effortlessly create quizzes, homework, presentation, etc. And there are many many more features. I am also happy to say that the early pilot feedback has been very very encouraging. Again coming back to business While core operating profit was negative, a substantial exceptional gain from the fair valuation of our investment in K12 Techno Services resulted in a reported consolidated profit after tax of rupees 188 crores for the quarter on the balance sheet.
Now we maintain a strong debt free position with significant liquidity providing a crucial buffer against current operational challenges and strategic flexibility for future growth initiatives. In summary, we are navigating near term headwinds in the publication cycle and exports while simultaneously making strategic investments in growing domestic market and our innovative Navneet AI platform to drive long term growth and educational transformation. Our company operates in a highly seasonal business where the majority of the revenue and profits are generated in H1 I.e. april to September. The Q3 period is typically a weak quarter with low sales and often operational losses.
The company anticipates that the start of a new curriculum change cycle in India will provide a momentum to the content business and simultaneously Navneet AI feature will encourage recommendations by the teachers. Further investment in new manufacturing facility in UAE not only will help resolve export tariff issues partially but also will enhance confidence among our valued customers. So I just wanted to give my opening remarks very briefly. I would rather suggest you all can ask us questions for me to answer them as much as possible today. Thank you.
Questions and Answers:
operator
Thank you very much. We’ll now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may Press Star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. Participants who wish to ask a question may press Star and one on their touchstone telephone. Our first question is from the line of Neeraj Pansingha from White Pine Investment Management. Please go ahead sir.
Neeraj Pansingha
Just can you give some color on the stationary side business and how the clients are talking to you about the same and about the tariff and how do you see yourself sustaining till the time the tariff issue is not resolved?
Sunil Gala
As far as tariffs are concerned, frankly the customers at their end also are very very confused. They really do not want to go back to China type of countries for the items that they were already buying from various other countries. So with the long standing relationship that we have, they have assured us to buy material from us. But simultaneously for them to continue to buy from us, we had to offer them some discounts. And therefore there was a hit on our margin also. So on order front we continue to. Rather we try keeping them happy so that they continue to buy from us.
But on margin front we have challenge till this issue is resolved. We have been talking to industry and the government as well. Somehow none of them are able to give us a clear indication as to when this issue of tariff will get resolved. But we believe this issue of tariff cannot go long. For very, very long. It has to settle. And once it settles, and since we continue to do business with the customers, then good numbers will come. But simultaneously let me also tell you that due to tariffs, be it minimal tariffs also overall inflation in the US has gone up, which you all might very well know.
And because of that, the consumption at the US also has gone down by 10 to 15%. Now that is likely to impact our volumes for sure. And therefore as a strategy we are developing newer and newer categories so that value wise at least we match up to what we have been doing so far. So overall tariff is a concern to our customers also. They have still not passed on that additional burden onto the final consumers barring few categories. But they have assured us that as soon as this is settled, they will continue to grow with us.
And they have requested us also to therefore don’t hold any expansion and continue to expand the facilities that we had already planned.
Neeraj Pansingha
So the pricing. Can you give an example of say 100 rupees a selling price, how much you are realizing right now after the tariff is income. And so you at least know how much margin you are at.
Sunil Gala
Yeah. So at present we are realizing 90 instead of 100. And this 90 automatically, whatever. Our beta was around 15, 16% in exports, that has come down to 5%. So that is the impact today.
Neeraj Pansingha
Okay, but you are still making a bit of 5%.
Sunil Gala
That’s right. Yes.
Neeraj Pansingha
Okay. Now two things more, sir. In terms of revenue, the growth in the stationary revenues, it is not there. It’s a negative growth rate. So.
Neeraj Pansingha
But you are saying that they continue
Sunil Gala
for just Q3. I mentioned about domestic stationery in the. The stationary numbers that you may be referring to is the total of exports and domestic both put together.
Neeraj Pansingha
I’m talking of these stationary Exports which was 115 crore the year back is 90 crores right now.
Sunil Gala
Yes, so I did. No, I did mention in my opening remarks that the reduction in revenue was primarily due to minimum curriculum change in Maharashtra and Gujarat. And Dropping the exports to the US So I did mention that.
Neeraj Pansingha
No, no, I understood that. Only thing is that when you said the customers were not reducing the volumes but they are wanting to reduce the prices. But we have also seen a reducing the revenues on the export front. That is what I’m asking. Then, then would you see again a continuous.
Sunil Gala
No, as I just made my mention that because of the inflation increased in the US overall inflation, the volumes in the US also has reduced and therefore we may not see the same volumes going from us for the categories that we are dealing today. And as a strategy to counterbalance that, what we did is introducing further newer categories so that value wise, our value wise also our export does not go down.
Neeraj Pansingha
And sir, can you give some color on the new categories and how much large they can become over a period of time?
Sunil Gala
So of course category wise file and folders which we were already supplying, but we were supplying very few items in there. So now we have decided to expand that category to the full extent possible. Then metal products, which we were, which we had started last year, but now volumes are picking up quite well the canvas category which also we started last year on a trial basis. So we are suggesting and showcasing all these product possible products of that category to all the customers. So that way new and newer categories we are introducing. So practically every week we give them couple of items not the category and showcase to them if they can agree to buy them.
So that way we are increasing our categories as well as items within categories.
Neeraj Pansingha
And so what is the potential of those new categories?
operator
Sorry to interrupt you sir, but if you have a follow up question,
Neeraj Pansingha
I’ll.
Neeraj Pansingha
Just complete this question, I’ll come back on the queue.
Sunil Gala
Yeah, yeah, please let him continue. Yeah, so. So total imports of the total filed and folder category itself is over $500 million in the US of which the items that we had selected was hardly 50 odd million dollars. So the other $450 million, various different items that we have started manufacturing and which we have showcased to them. So possibly the volume there could be beyond $100 million. Got it.
Neeraj Pansingha
I’ll come back to the queue. Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit the questions to two per participant. Our next question comes from the line of Jinesh Josie from PL Capital. Please go ahead.
Jinesh Josie
Yeah, thanks for the opportunity. Sir, you mentioned that you are hopeful of having a quicker resolution on the tariff issue. But you also mentioned that you are planning to open a New manufacturing facility in UAE which will start operations in 2Q. So just wanted to understand if we are hopeful of a quicker resolution, why open a manufacturing facility we can might as well outsource temporarily. That is question one. And secondly if we manufacture and commit any capex and then the resolution comes through, what happens to the expansion plan in ue?
Sunil Gala
Thanks Dinesh for this question. So it’s not since the tariffs are initiated but basically all our customers were talking about de risking country risk and therefore two years ago also we had thought of going beyond India but the location that we had selected was finally was not the right location because even tariffs were levied on that country also. But finally we realized and basis our customers suggestion we decided to open the operations in UAE also. So it is a country risk mitigation policy that we have adopted. Going forward, the way world is behaving when what will happen no one knows.
And therefore in the interest of company we decided to have operations there. Now when we are saying operations there means we are not opening full fledged capacities that we have it here for several categories only we have we are putting up the plant and machinery there is thankfully there we are not investing in land and building, rather we are not allowed to invest. So we are investing in several machineries and part of them we are transferring from the present manufacturing units and partly only we are buying afresh. So and as I also mentioned in my initial talk that that will enhance the confidence among our all valued customers.
So it is purely strategic move, just not because of the tariff. Otherwise also we decided to have some manufacturing base in other country. Investments are not big and investments are not big.
Jinesh Josie
Yeah, my next question was on that only how much are we planning to invest over there? And secondly you also mentioned that this category, I mean this particular facility will be operational by 2Q and you are not going to invest materially in land and building. So that is why the timeline is so short. Is that a correct understanding?
Sunil Gala
Yes please. So there are readily they call it warehouses where which can be converted to manufacturing units also these are available readily in that area and therefore we are confident of that timeline.
Jinesh Josie
And keep it somewhere possible to share.
Sunil Gala
Yeah, so around 30 odd crores we are investing there balance. As I said, partly we are shifting additionally partly we are shifting from India and so there will be operational loss in the first year but from the subsequent year we will start generating profits as well. There.
Jinesh Josie
One last question from my side. There was this fair value gain this time around due to revaluation of our stake in K12 can you just share what is the revised valuation, who was the fresh investor who had come in and what is our current stake in the company?
Sunil Gala
So the value was one of the shareholders sold off their part equity at 6,550 crore valuation. And therefore. And there was some primary infusion at the same rate also in the company. And therefore we had to revalue asset.
Jinesh Josie
Right. And our stake if I’m not mistaken was 14. So due to this primary infusion.
Sunil Gala
Yes. Yeah. So finally there is going to be a second round also in March and post that round and of course it will be valued little higher than what the figure that I mentioned. But post that our shareholding will be around 13 and odd percentage. 13%, right? 13 plus percentage, yeah.
Jinesh Josie
13 plus. Okay.
Jinesh Josie
Thank you. Thank you so much and all the best.
Sunil Gala
Thanks.
operator
Thank you. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. Participants who wish to ask a question may press star and one on their Touchstone telephone. Our next question is from the line of Amit Ketan from Labanum Capital. Please go ahead.
Amit Ketan
Hi sir. Thank you for the opportunity. In your opening remarks you talked about Navneet’s investment into AI. Can you just quantify what is the kind of OPEX that will entail and how should we think about margins, impact on margins as a result of that?
Sunil Gala
Thanks Amit for this question. Now Navneet AI platform that we have created, first of all we have not invested in manpower also whatever manpower that we had through them only we have created this platform. So there is no additional OPEX that we are spending to create this platform. Now with respect to Navneet AI, it is a feature in the content delivery to the end users and that we are providing. So there will not be any independent revenue numbers coming from there. But because of this feature we are very confident that the team teachers will like the content of Navneet.
So that should help us expand our increase or sales of physical books, digital offering everywhere we will get benefit. So now AI is made in a way that it will change the way learning is happening and the teaching is happening. So teaching, we are focused at present on teaching. Part it means we are helping the teachers which this helps teachers to teach in a shorter time frame. They don’t have to waste on various other activities to prepare something so that we are helping them to create such features in on the platform and immediately they can give it to the students.
Once this stabilizes and more and more teachers starts using it, then we will decide to have a separate product for the student community which I’m not committing today when because even this new feature we are just trying to create awareness and we have to see that it is adopted quite well. So I think for next one year we’ll be investing in creating awareness. And for that our sales team which is going school to school, they with them, the technology team will accompany and they will create awareness. So what I’m trying to say, long term such a platform will be so, so useful to the teacher community.
And therefore they will start recommending our products to their end customers. To our end customers, that is students. So that way noun, it should benefit a lot.
Amit Ketan
But I’m just trying to understand how much is the opex you are incurring for this.
Amit Ketan
Like there’s.
Amit Ketan
There’s some cost involved, right?
Sunil Gala
So few license cost would be there then that will be in lakhs of rupees only. But as I said, we have not increased our manpower just for this feature. Whatever manpower that we have in Bangalore to create our digital offerings, same team is making this so there is no additional expansion.
Amit Ketan
Okay? Understood, Understood. Second question was can you just give an outlook on how do you see the publication business shaping up for FY27? You would have some better visibility on how many, you know, grades are being upgraded, you know, with the new curriculum. So what is the kind of growth we can look forward to in this segment as well as in the domestic stationery business.
Sunil Gala
In publication segment now we have a clarity. In Maharashtra, 2, 3, 4 and 6. These four grades are changing. Whereas in Gujarat only two grades are changing. 2 and 3. Overall with these grades changing, we feel around 15 odd percentage revenue growth we will achieve in publication segment for FY27. And in stationary of course it is just now not the paper stationary. We have already come out with lot many other non paper stationary products also. And we have set up a fresh new marketing team also for the same. And with that overall both put together, we will see at least 15 to 20% growth in stationary business that is domestic.
I am only talking about.
Amit Ketan
Yeah, yeah, yeah. And lastly in this K12 transaction, are we not participating by selling?
Sunil Gala
So it was deal by Sequoia Capital with an external investor. And they did mention that after a couple of months when they see how it is faring that time they will decide to further buy. So probably we should receive a call in few months.
Amit Ketan
Got it. So we are open to selling our.
Amit Ketan
Stake
Sunil Gala
partly not fully because we are so excited about the company and the way it is progressing. So we may not think of exiting Fully right now, but partly. Yes.
Amit Ketan
Understood. Thanks a lot.
operator
Thank you. Our next question comes from the line of Rajan Shah, an individual investor. Please go ahead.
Rajan Shah
Yeah. Good afternoon. Good afternoon Sunil bhai.
Rajan Shah
How are you?
Sunil Gala
Very fine. Rajan.
Rajan Shah
Yeah. My question was on the facility which we are putting up in UAE. You mentioned that we are putting in about 30 crores over there. 30 crore of investment over there. So I mean the first year we’ll be having operating loss.
Sunil Gala
Yeah.
Rajan Shah
So second year onwards, sir, what are we looking at? What kind of exports can we expect from that unit? Actually in the second year of operations, second full year of operation and. And what kind of profitability we are looking at. That was my first question. Second was on the K12 techno thing. I would just. I’ve been in the markets for more than. And one thing I would like to suggest is that you know we hold about 13, 13 and a half percent stake in K12 Techno. The valuation assuming that you know in March when the next round of funding happens is let’s say 7,000 crore.
Our stake is at about 900 crores. Profits, I don’t think so will be above 150 crore or maybe 100 crore or something like that. Because last year I saw, I mean there was some loss at the net level and 435 crore over. My point is sir, we have seen like if you see last 18 months so many companies got fancy valuations and today their stocks are 50% below that top. So my request to the board is to consider exiting it. Because if we are getting about 900 crores, I mean even on 7000 crore of market cap valuation, you know, stock will be at 70 times the earnings.
So management should think about this exiting if not completely, at least 50%. Because we have seen in the last 18 months all blue chip companies, small cap, mid caps, quality companies. I’m talking about, I’m not talking about Tom, Dick and Harry companies. I’m talking about really good quality mid cap. Even a company like Properties, we saw the stock coming down from 3600 to 1500 rupees. It’s more than 50%. So you know, these are the times when we need to control our urge to make a little more on our investment and exit and make some really fancy profits, you know.
So I would urge the board to consider this because it’s only during good times that we get good value. And then when times change, you know our valuations may come down from 7,000 to maybe even four and a half thousand, you know, who knows? So please do think on this and.
Sunil Gala
Thanks for the suggestion. But first I will answer on your first question is that what will be the revenue coming from our UAE operation next year? So this is our calculation. Today it would be between 50 to 55 crore of revenue with around 8% of EBITDA next year and in the subsequent year that may figure FY29. I’m saying it will reach around 90 odd crore with the same facilities and EBITDA would be around 12%. So this is as far as the numbers for UAE operations are concerned. And your suggestion for K12 we’ll definitely discuss in the board.
But it is my duty to explain also since you everyone are privy to the numbers filed by the company K12 Techno in ROC. What one really does not realize in that is every year they open between 15 to 20 schools as a growth. And these whenever any company opens new school there are huge losses in the first year. First loss is on account of improvement in the infrastructure that they go to. And second losses are the marketing and sales. Whereas the admission numbers are hardly 3, 350 students. Therefore these schools, the losses of these schools are adjusted against the profit of other schools.
Till the time they continue to expand. This situation will come. But long term investor just do not look at one one year profit or loss. They do look at long term. And therefore we are very clear that the day this company stops expansion that profits will zoom to a much better number. And that is the reason of we still holding this stock with us. But we’ll discuss this internally and decide right for the shareholders.
Rajan Shah
Yeah, absolutely right. What you said, I do agree 100% with that. In fact I’ve gone through K12 techno. You know, they have about 85 schools, about 53,000 students on enrolled. Actually I have gone through all the things. But the thing is that sir, currently we have 85 schools. And we can really scale this up and we can scale it up to maybe 200, 250 schools. But the point is that sir, yes, the market will give its value. But the point is that you know as long as we continue to expand. Because I was reading in that one of the reports, rating reports by one of the companies, I don’t know Crystal or Care Ratings which had done a study on this K12 techno.
They say that about 1012 crore of expenses incurred in the very first year for every school which they take up. You know. So my point is that you know if we keep on scaling up from 85 to maybe 150200 schools in the next let’s say in the next five years we double from 85 to let’s say 170 or 200 schools. That is possible in that case. So we’ll continue to keep on building up our losses, you know. And so this will keep on continuing, you know. So we then need to get some really good big investor who can pump in big money and you know aggressively scale up and then maybe the market will give it a good value.
But we don’t need to because Even last year 435 crore of revenue there was a net loss.
Sunil Gala
So no, as I said Rajanbai will discuss this internally in the board and take appropriate action which is in benefit to the shareholders.
Rajan Shah
Fine. Sir, my last question was on the exports or do we expect any recovery? I mean on the exports how do we plan to cover up on the loss of exports which is happening in case of us by increasing the sales in the domestic market or what is our strategy sir? Because.
Sunil Gala
Two strategies. One is increasing categories for exports and increasing items within categories. These are the two strategies we have adopted for exports to at least continue to achieve a little higher number of volume than the previous year. This year of course because of these additional tariff things really went little differently than what we were thinking. And secondly second strategy is increasing revenue in the domestic stationery. Just not by giving paper stationery but also adding huge the many categories in non paper stationery. The process has already started. We have already delivered couple of categories in the market and therefore we believe both, both things should overall help to grow the stationary business.
Rajan Shah
Fine sir, all the best. Thank you so much.
Sunil Gala
Thank you Rajinmay.
operator
Thank you. Our next question comes from the line of Praneet from an individual investor. Please go ahead.
Praneet
Hello.
Unidentified Speaker
Yeah Praneet.
Praneet
Yeah thank you for the opportunity. So I came a little late. Sorry for if I’m repeating any questions. So in terms of our Capex plans and stationary like last quarter and the year before we had large Capex plans for for our domestic facilities. Right. Could you explain in terms of we started putting up facilities in Dubai like to be released if I’m not wrong. So could you explain how are we changing our overall capacities plan from India to abroad or how are we going to see it? And in terms of sourcing of our international customers are they willing to take up from Dubai? Could you give some idea on like how the customers are reacting to it and how are we changing our plans that we told in the past?
Sunil Gala
Yeah. So whatever Capex that we were to put in India as far as the machineries Are concerned that we have halted for a while except the plan that we had already put up last year. And in the current quarter we have capitalized the same which is in southern Gujarat. So except that there are no other expansion plans in India right now. Instead we have decided to expand in uae. Now whether customers have accepted us to deliver from uae in fact they have been suggesting to us for last two, three years to have de risk our company by de risking the country.
And therefore we are very sure that once we offer them similar products from any country they should be happy with so on. Customers accepting goods from UAE is not a big question to us today.
Praneet
But in terms of I don’t know completely but usually customers tend to have like to look at the new clients and also check out how they’re functioning before they start taking up large offtakes.
Sunil Gala
But obviously but obvious any new plant they will have several audits conducted on in their plants. Now Navneet fortunately knows what are the requirements of the customer so it will be audit compliant from day one. So on that front we are not at all worried. We have been doing this for last several years in India and similar things we will have to do there in the new plant also.
Praneet
And in terms of management bandwidth who would be taking up the UAE operations for the company and and so the.
Sunil Gala
Present senior team of stationary division manufacturing division we have deputed couple of them from India. So most of the senior staff will be going from India who are quite experienced enough with NIT itself and the lower level staff will appoint there.
Praneet
So and in terms of pricing wise will it be similar to our India pricing or would it be this further savings or the further cost that we pass on to the customer tell in terms of pricing of the final product and also our margins how might they change from India operations?
Sunil Gala
So praneet margins the sorry the pricing are decided by the customer looking at the international pricing they just don’t look at us country specific pricing. So accordingly we believe whatever that they were ready to give it to Navneet India same sale value they will give it to us from any other country that we supply from. So on pricing I think it will be decided by India only and then it will be supplied from a different country. And as I before you might have come onto the call, I did mention that there will be little lower margins in UAE operation compared to what we were generating from India.
And that is main reason is the labor cost would be higher in UAE and therefore the margin that we are enjoying from India may not be the same but Reasonably we will be able to grow as well as generate reasonable margin from there as well.
Praneet
Understood. So would you be. So in terms of our capacities, what. What is our maximum potential in India with the last year plan. Exactly. And UAE, I heard that you wanted to take it to 90 crores by the end of 27, if I’m not wrong. So could you explain how you want to the mix to be by 28? What are the plans in terms of management that we see right now?
Sunil Gala
So I should. I should admit here that since we are going to a new country for the first time, we have as on that decided to grow our business to 90 crore. Once we are quite well settled and are satisfied with the operations there, then there is no harm growing there as well. Further. And it can be before FY28 also. So we are keeping our finger crossed. And to see to it that we are we operate the plant satisfactorily to Navneet as well as to our customers. And coming to India operations, the revenue that we were generating, we generated in FY25.
I think that there’s a clear cut plan. There was a plan which we were mentioning about growing 15 odd percentage. So that plan still we continue. But depending on this resolve of tariff issue, we’ll be able to really perform. Whether we do that number or little lesser. If tariff issue is cleared by the end of March, then we’ll have full year to operate to achieve that number.
Praneet
Got it. So I understand. But in terms of consumer offtake, I understand that the final company used to source from us among many others. Right? I was wondering are the customer continuing to take up our orders for the basic levels? I’m not talking about the incremental sales, I’m talking about the general full year orders or how is customer
Sunil Gala
immediately in.
Sunil Gala
The week when the new tariffs were announced proactively, my team sat in front of them physically and did say that we want to do continue this business with you for very very long. And for that we did offer them 10% discount. So overall for them if they import from any other country, for them the incremental cost is around 10% which they happily agreed to bear that because they also showed that for last 15, 17 years they are operating with Navneet and quite happy with the quality and timely delivery. And therefore they have immediately accepted that they will continue to buy from us.
So on that front also we are not much worried. And since we continue to sell them maybe at a discount today, once the tariff issue resolves automatically that discount will go off and Then we have to just plan for our growth.
Praneet
And in terms of landed cost, I’m sorry for marks and you’re solving. So do we. Do we deliver it on their location or was it just. We just give it to the port and they pay the UT and everything else.
Sunil Gala
Our supplies are always on FOB basis. We never supply on CF basis.
Praneet
Understood. So and so what kind of impact do you think the discount had in our EBITDA margins were stationary. So I’m trying to understand what can we forecast for the next few quarters.
Sunil Gala
So at present in exports we would have done around 4 to 5% EBITDA margin versus 15% that we normally generate in exports. So that is the margin difference between the two period
Praneet
and domestic will be.
Praneet
On the 10% mark.
Praneet
Right.
Sunil Gala
Domestic also it has come down to 5, 6%. And reason I did mention that we since we are growing our non paper stationery business and we have. There are initial expenses that we are incurring including the manpower cost for which against which we have not yet received the good revenue. So that will impact the margin for a short period.
Praneet
So can we expect by 27 we will get back the domestic margins at least?
Sunil Gala
Yes, yes, yes, yes, yes. We can expect that.
Praneet
Understood. Got it. So in terms of gross margin, so domestic. So with the non paper stationary coming in, what is the plan of the overall product mix the company would like to ideally have? I understand that offtake might change but in terms of the company outlook by 28, what type of mix would you want from non paper stationery versus paper and what would that be?
Sunil Gala
FY28 if you’re asking then we would like to have 20% of our revenue domestic revenue to come from non paper station.
Praneet
Okay, got it. And one last question regarding our exports. So I think we wanted to develop our relationship with non paper stationing exports also. So will our UAE facility also cater to that or would it only cater to paper at this point?
Sunil Gala
At present only paper paper and of course plastic. Also not only paper but plastic. So these are blended product plastic and paper mix. So these kind of products would be manufactured in UAE but not the newer categories that we are planning or developing right now to offer to our customer. On all settled categories, we will continue to manufacture in UAE for the first one and half year or so.
Praneet
And in terms of the RFQs like in other new products that have slowed down or are they still continuing and just placed on hold for final conversion. Can you explain that part?
Sunil Gala
No. So we have, we have been creating almost on weekly basis and are Showcasing it to our end customers. But end customers are bit confused today what to buy, what not to buy, how much to buy. So most of them have kept their orders on hold for newer products. So there we have not received though we have been showcasing it to them on a regular basis. So we are just awaiting let this tariff issue gets over then automatically everything will start moving.
Praneet
Understood. Thank you so much for your answers. That’s greatly.
Sunil Gala
Thank you.
Praneet
Very insightful.
operator
Thank you. Our next question comes from the line of Neeraj Mansingha from White Pine Investment Management. Please go ahead.
Neeraj Mansingha
Thank you for the opportunity again. Will it have an impact for us?
Sunil Gala
No Neeraj. Basically even as on today before the new fda the paper products were at nil rate only. So there’ll be no additional benefit that the importer will have. So we are not seeing any additional benefit or a new opportunity from eu.
Neeraj Mansingha
And these are things paper products and non paper products like the plastic and the middle waste.
Sunil Gala
Yeah. So stationary. I don’t have full clarity on all the categories. What were the rates earlier and what are now. I know of paper and blended product of plastic can paper, Those were at 0%. We have not yet planned or understood more as such. The whole division is concerned about our present existing business. So day in and day out major discussions are on that only. We have really not focused much on the EU opportunity for other product categories.
Neeraj Mansingha
Okay, got it. Thank you.
operator
Thank you ladies and gentlemen. As there are no further questions, I would now like to hand the conference over to Mr. Sunil Gala for closing comments. Over to you sir.
Sunil Gala
Thank you once again to each and every one of you to have attended this call. Thank you Jinen also for on behalf of Prabhu Dasli ladder to have helped us managing this conference call. And thank you every one of you once again.
operator
On behalf of Navneet Education Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.
Unidentified Speaker
Thank you.