Navneet Education Limited (NAVNETEDUL.BO) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Navneet Education Q1 FY '26 Earnings Conference Call hosted by PL Capital. [Operator Instructions] I now hand the conference over to Mr. Dhvanit Shah. Thank you, and over to you, sir.

Thank you. On behalf of PL Capital, I welcome you all to the Q1 FY '26 earnings call of Navneet Education Limited. We have with us the management represented by Mr. Sunil Gala, MD; Mr. Kalpesh Dedhia, CFO; and Mr. Roomy Mistry, Head IR. I would now like to hand over the call to management for opening remarks, after which we can open the floor for Q&A. Thank you, and over to you, sir.

Thank you. This is Gnanesh Gala -- Sunil Gala from Navneet. So good afternoon, and very, very warm welcome to everyone present on the call. As mentioned, we are 3 of us on the call. Hope you all have received our investor presentation by now. For those who have not, they can view it on the respective stock exchanges or on our website. So I'm pleased to share with you our company's performance for Q1 '26. Our revenue remained stable and stood at almost the same number as in Q1 '25. I'm sure we will have it clarified during Q&A on these numbers. I will start with the content business, publication business. So the business remained flat due to only a few minor changes in the lower grade curriculum. As you might all remember that and as mentioned earlier, there was only one grade, Grade 1 to be changed in Maharashtra and a couple of subjects in the state of Gujarat in the current year. So in Maharashtra, particularly, the textbooks of Grade 1 arrived late. And finally, we launch our books in Q2. So that effect did not come in Q1. And the revenue of which shall be in Q2, the curriculum change cycle has started. And going forward, we foresee that curriculum of higher grades will start to change gradually giving the much anticipated momentum to our publication business. From next year onwards, we shall see more curriculum changing in both the states as NEP 2020 has got acceptance across these two states. As per our present information, there will be more than 2 grades changing in Maharashtra and similarly in Gujarat. So moving forward, we still remain focused on expanding our reach, strengthening our content portfolio and leveraging digital platforms to enhance distribution and accessibility. This strategic initiative will enable us to build on our own success and drive sustainable growth in publication business. Just to tell you all, the publication business is not only a print business, but in most of the publications, the digital components are also part of it, and that gives us an advantage over the competition. Now coming to stationery business. First, I'll talk about domestic. It, in fact, degrew by 14% in Q1. Reasons are the same, which I had mentioned in Q4 '25. The drop in paper prices resulted in reduction in product pricing and hence, lower realization of around 9%. What I mean is that with the quantities that we sold, the overall revenue degrew by 9% just on account of lower end product prices. But simultaneously, we had a volume drop of 5% also, which I would attribute to competition from unorganized sector who would have procured paper with new reduced rates, whereas what we sold was out of inventory, which was procured last year. Now that paper prices have stabilized, the threat of such competition would reduce. With the start of and introduction of new innovative non-paper stationery products and strengthening of our distribution network and exploring opportunities for the product innovation, we are sure to achieve sustainable growth in domestic stationery segment as well. I agree, while near-term challenges persist, we remain very, very optimistic about the long-term growth prospects of this segment, backed by our strong brand positioning, extensive market reach, new product ranges and commitment to delivering high-quality products. With respect to exports, I know there would be lots of questions on that. So the exports grew by around 7% compared to Q1 '25. Even during the challenging period, we believe 7% growth was reasonable, not sufficient, but reasonable. Here, this was on account of new product introduction, helped Navneet to expand its top-line even though new rates were negotiated with the clients after reduction in paper prices. The company is looking at the unpredictable developments closely for its future business strategy. I'm sure you all would have understood why I mentioned unpredictable developments. So this additional tariff that is imposed by the U.S. has actually not come into effect and will be finalized by end August. I'm sure respective governments will have right negotiations, which will help all the exporters from the country. Thankfully, our company has not faced any cancellation of orders till now. But going forward, the trade is maintaining the wait-and-watch strategy till the final outcome of trade negotiations between the 2 countries. I want to assure you that the management is fully committed to navigating this period of uncertainty. Now as a company engaged in global trade, we remain vigilant and responsive to such developments. We are actively monitoring the situation and assessing any potential impact on our operations, supply chain and cost structures. While these uncertainties may create short-term volatility, our long-term vision remains strong. We are, in fact, committed to maintaining transparency with you and we'll keep you informed as the situation evolves. With this, I take this opportunity to express my sincere gratitude for your kind continuous trust and support. As we reflect our journey so far, I'm pleased to inform you that the future of the company is bright and full of promise. We have, in fact, laid a strong foundation over the years, as you all may know, and we are now entering a phase of sustained growth and innovation. Once again, thank you for your continued support and trust in our company. Our strategies are focused on expanding our market presence, embracing new technologies and strengthening our core offerings. We are actively exploring new growth avenues while maintaining financial discipline and operational efficiency. So thank you once again, all of you. And now I open the floor for Q&A session, please.

[Operator Instructions] The first question is from the line of Niraj Mansingka from White Pine Investment.

I just wanted to know, you said there's a delay in the booking of revenues for Q2. Can you give some numbers on how much delays can be -- how much revenues was delayed in rupees crore percentage, that would be useful. Or you can also likewise -- what was the like-to-like growth in this quarter on a Y-o-Y basis?

I believe you are asking for publication business -- delay for time and -- yes. So it was -- as you may recall, the growth normally would come from curriculum change, this year being first year of curriculum change in both the states. And in the state of Maharashtra, state publications published by the state government came in late in the market. And therefore, we -- as we prepared ourselves, we could release the new publications in Q2, that is in the month of July. So as of now, if we speak, there is no delay. We have already introduced and sold in the market. Now with respect to the volume, I can tell you that normally Grade 1 contributes around 5% to 6% of our total publication business and around 50% comes from Maharashtra. So the growth that you will see in Q2 will be marginal. It will be hardly 3%, 4% on account of just Grade 1 curriculum change. But simultaneously, as we are seeing today, there are good repeats overall. So there will be some more growth beyond this 3%, 4% in publication business in Q2 itself.

Right. So the reason I was asking on specific to what in rupees I'll tell you because see, when you -- on a sustainable basis, your revenue is 5% to 6%. But when there is a grade change, the revenue contribution -- because people stop using the old books or the secondhand books. So there's a disproportionate increase in number of students buying the new syllabus -- curriculum books. So won't that have almost 10% because what I'm meaning the average life of the book is between 2 to 3 years.

No, Niraj. Niraj, 1 minute. First of all, as I said, total contribution from Grade 1 is hardly 5%, 6% of our total publication business. So even if it grows by 100%, it means the overall business would grow by 6%. And now again, this I spoke about Maharashtra, which contributes 50% of our publication revenue. So that comes down to 3%. Now if you remember our school days in Grade 1, actually, there are no guides where the secondhand book market exists. So these are only workbook category that are introduced fresh. The benefit the company would have is there would be no inventory in the market at all as well as being new product, NEP -- introduction of NEP, schools are curious for its new curriculum with NEP guidelines. And therefore, we will achieve good growth, at least whatever growth that we were achieving that we will surely see.

In Q2, would you see less returns coming in the publishing because now everybody should be cautious in putting inventory in the system. So just wanted to know your thoughts like how your return...

Returns -- see, as far as our provisioning is concerned, we have already assumed proper return as earlier years. And then only we have shown the revenue numbers. So at present, I may not be able to confirm that returns would be lesser. But we have already provided for. And if those returns do not come in, the revenue automatically will further increase.

Okay. Last question, I think I'll come back in the queue. On the stationery side, if you are selling, say, INR 100 to the customer, how much would the shelf price be for the customer when you sell them and they sell to the customer? So I just wanted to know how much is the price buildup that's happening from you to...

Yes. So it is almost 50% we have to add over INR 100 because we provide around 35% discount to the trade and retailers put together.

No. I'm talking of exports actually.

Yes. So on exports, how much is the -- how much would be...

Is INR 100 is the realization for Navneet and how much would be the selling price to the customer? Just wanted to see how much price buildup is there the slack in the system?

So there are many incidental costs by the time it reaches to the country, U.S. and thereafter, their margins and their operational costs. So normally, we have seen depending on the category, if we receive INR 100, they would be charging between INR 200 and INR 250 to the end consumer.

Which includes all the cost plus markups?

Yes, yes.

The next question is from the line of Madhur Rathi from Counter Cyclical Investments.

Sir, if I look at our publishing business since 2019, sir, our revenue has been flat. Sir, we understand that there has been no curriculum changes. But sir, our profitability has declined on a stand-alone basis from what we used to do 35% on EBIT margins to 25%. So why is that? And have the terms of trade or business dynamics changed because for this reduced margins?

Yes. So I agree that the numbers have remained flat. And you can understand analytically that if numbers remain the same on top-line, there is always inflationary cost built up in any operations of the company. So that reduced the margin to some extent. But the major reason if you go back and see consol numbers where our digital activities were carried out from a subsidiary company versus now the digital activities are carried out in the stand-alone company only. So those losses that we still have on digital, of course, internally, now we don't consider that as loss because to give the books away or print books away, the digital component has become mandatory or necessary. So it is part of additional expense that we are incurring to keep our print books business alive. So on that count, the percentage has come down. But if you compare it with consol numbers of '23, '24, then the numbers would not be that far away.

Sir, since when have we taken this digital losses into our stand-alone entity because I'm comparing it with 2019 numbers. So I understand that there will be some pressure.

Yes, yes. So last year was the first year when we considered that those numbers in stand-alone basis. Earlier, it used to be always in the subsidiary and therefore, you have to see consol number as far as publication is concerned.

Sir, so we have done so much investments on the digital side, but there hasn't been any revenue growth in terms of volume or average selling price increasing. Sir, so when do we think that from an IRR or a payback perspective that these digital investments are making sense or not? Because even after -- just based on the premium product that we are providing, there hasn't been any growth on revenue. Sir, so on that front, if you could just help us understand.

There are various reasons for this. First of all, let me clarify here that without the digital component in a print book, it will be very difficult to sell individual book without a digital. And therefore, it has become one of the additional process to provide a good physical book. So this expense will always continue. I agree to you -- agree with you that the volumes have not increased even though with this premiumness in the product. Now there are a couple of reasons to that. One is the curriculum change, which has not happened for long. Now during pandemic period, I think the -- as you could see in most of the FMCG companies, the middle class and lower middle class who are normally our customers, they have really not been able to come back to their original levels. That is impacting our business as well. Secondly, many of the parents who have been able to grow post pandemic are shifting their children to CBSE schools. And that is another reason the volumes are shifting to CBSE schools. It means they do not use state-level curriculum. So these are the 2 reasons -- main 2 reasons for which we are not able to grow in publication segment. But now we are very, very confident. And of course, everyone has waited for long, but next year, you will see the results.

Got it. Sir, just a final question from my end. Sir, on the publication business, if I look at FY '26 and FY '27, sir, what kind of revenue growth? And what is the margin that we can expect from this business this year and the next year?

So I can tell you at a yearly basis, I will never give any remark on quarterly basis. So as far as the revenue growth is concerned, we are confident of at least 15% in publication business next year because there are more than 2 standards changing in both the states. And -- but of course, it would be still primary standards, but 2 standards are changing at a time. So that itself gives us the confidence. And as far as margins are concerned with this additional revenue coming in, and every year, the loss that we are incurring on digital is reducing and that reduction is on account of more and more usage of these products by the schools. And therefore, overall, your margin improvement should see at least 2% if we see yearly basis on a publication segment.

Sir, we should see this 25% EBIT margin growing to 27%, is that understanding correct?

That's right. That's right.

And sir, what will it take for us to reach the previous 35% in margins?

35%, I'm not able to foresee for next couple of years because the expenses that we are making for our digital product and operational expenses which have already gone up for -- so every year, there would be inflationary cost pressure of around 6%, 7%. And to match that, we'll have to really grow very fast, which is practically not possible in publication business. And therefore, very confident that we will reach 30%, 31% in 2 to 3 years.

Sir, so basically, what is the reason for the stand-alone publication revenue to be flat since FY '19, which is like 6 years? And moreover, sir, this NEP thing is a one-off. But every year without NEP also, historically, we were growing. But something has changed in the past 6 years since FY '19 that the revenue has stopped growing in the publication division.

So I did tell you the 2 reasons and for the sake of repetition, I don't mind that. I did tell you that the -- our customer base, which is middle class and lower middle class have not been able to buy more products and which we are seeing in various FMCG product companies, similar impact has come on our product. And second reason I gave you was that shift of state level going children to CBSE curriculum. And therefore, the state level curriculum business got impacted majorly from these 2 counts. So I'm not talking about curriculum change. But because of this, unfortunately, all the publication business, all the publishers in the country are facing the same issue. So it's not only Navneet, which has got impacted.

Sure, sir. And sir, regarding the margin contraction in publication stand-alone, just a clarification, sir, our Navneet Futuretech and new digital investment, everything is in the subsidiary or in the stand-alone business also, there is something?

Everything is in stand-alone now.

[Operator Instructions] The next question is from the line of Viraj from SiMPL.

A couple of questions. First is on the export. I think a few quarters back, we had also faced antidumping duty in some of the larger products. And one of the risk mitigation strategies we have employed was shifting the manufacturing to one of the ASEAN countries in terms of supply to rebuild competitors. Given that we now have 50% probably tariff structure, do you think it's possible for us to keep supplying to our larger key large customers through such routes?

So I'll answer your first question with respect to antidumping on certain products. Frankly, it has become a past for us. With the introduction of newer category of products, we could revive those numbers on its own without even focusing more on products which had antidumping duty. So we are really not much worried, and that component was around INR 40 crore, INR 50 crore, which I agree is a good number, but now we are not much focusing on that. I think the problem to -- or the concern to all the exporters, including Navneet is the new tariffs that's introduced. Now here, I do not know even President knows about it or Prime Minister knows about it. But unfortunately, we are totally clueless as of now with respect to future of business in the U.S. So we have to still wait and watch, have to be in continuous dialogue with our customers. They will also evaluate the differences between respective exporting countries. And accordingly, they will come up with something. So I believe by end August, when I think final clarity will come, then only we'll be able to -- we will rather start talking to our customers and we'll be able to have some more clarity on future of exports to the U.S.

So one question was, I mean one of the post that antidumping duty, we had moved production for that particular category to another country to sustain the business. So if tariffs were to sustain, do we have levers where we can move production of some of the products or categories to other competing countries and still able to...

So this being a little unpredictable. So the country where we shifted our production, outsourced our production, even that country is subject to now higher antidumping duty. So that possibility also went away. And as I said, our -- for us, the problem is we are rather focusing just a larger problem than to just focus on products which had antidumping duty.

Okay. Second question is, if I were to compare other competing countries for the categories we are in for exports, how would we compare on the cost base? So we are INR 100 then -- any color you can give?

So as far as the stationery products are concerned, believe me, the cost difference will not be beyond 5%, 7% in any country because the raw material prices are international prices, which has to be considered while exporting to any other country. So that is not a big difference. The difference and this difference also is mainly on account of labor cost. So there would be hardly difference of costs between the countries for each of the category.

Got it. Sir, just few more questions on the domestic stationery business. I think a few quarters back, we were talking about quite big plans with respect to quite an aggressive play in the non-paper stationery space. And at that time, we talked about setting up a dedicated unit and focusing [indiscernible] new product introductions and that by new design and development team in change. So any color you can give where are we with respect to that because if you see other companies in the space, we have seen a very healthy growth trend even continuing. But for us, for some reason, we're not able to enter or scale up in a meaningful way outside of the paper category in domestic [indiscernible].

So I -- we have been talking about non-paper stationery for last 2 quarters. Now having decided and informing all of you in advance, we did put up the manufacturing facilities. Now it always takes some time to finally conceptualize the product and bring that to the market, which has happened. And now every month or 2, we are introducing new and newer products. So I agree the market is there. The competing companies are also growing fast. But I think we will need some bidding period for us to bring various products and then aggressively build our brand there as far as non-paper stationery is concerned. We are committed to bringing in more and more products in non-paper stationery, which will be seen by everyone. Every quarter, you will see something different. With respect to paper stationery, yes, we have had challenges. And these challenges to overcome really may not be able to bring us higher growth just in paper stationery. So better growth will be seen in future only on account of non-paper stationery.

Can you give some more color on what categories we are looking at in non-paper? How large is the design team now supporting this -- both design and marketing team?

So at present, we have already introduced a couple of basic writing instrument products, the geometry boxes as we understand, then a couple of examination paper -- boards or likewise, every -- frankly, every month, we are introducing one, one additional item in each category. So I think larger category is writing instrument, which we will introduce very, very regularly newer ranges. So there are various products, which we will see going forward that the revenue on account of non-paper stationery is increasing.

And how large is the design development team in terms of [ internal ] marketing for those initiatives?

So development team, of course, it is just right now 8 to 9 people. We have yet not fully set up our marketing team because unless we have right full category and right range in each category, it will not be worthwhile to spend aggressively on marketing. So at present, we are in the phase of building the category as far as the design and manufacturing is concerned. So going forward, in next 1 year, you will start seeing aggressive marketing from us also.

The next question is from the line of Arihant from Bowhead.

Sir, I just wanted to know like do we expect price degrowth in domestic stationery in coming quarter as well, assuming that paper price doesn't change much from the current level?

No. So paper prices as of now have been stable for the last 3 or 4 months. So I do not foresee any reduction in end product prices going forward. Additionally, now that the season right from October, the buying pattern for the paper also will start. So I do not foresee any reduction in paper prices now. This was unprecedented 50% almost hike in 1 year and then gradual reduction, which was never seen by the company. But now I do not foresee reduction. I just -- we may have 2%, 3%, 4% revision -- upward revision in paper prices going forward.

So have we utilized the higher price inventory which we had for paper? Is it completely used?

Yes, please. So more or less, we are now exhausted with the inventory. But it will be mixed for next 1 quarter. Still, it will be mix of high-cost inventory and present price cost inventory. So by second quarter end, we should be okay, means we would have exhausted our last inventory.

And sir, wanted to know like, how was the response for the new launched products in domestic stationery like geometry box, et cetera, which we launched in, I think, 4Q '25. And can you give some color how much percentage they might be of our overall 1Q '26 domestic stationery sales for the very small changes in the [ quarter ]...

It is very small. Till now, it is only 1.5% of our total domestic paper stationery sales. But with respect to acceptance or acceptance of the products, I would say it is very, very well accepted because of the very innovative designs, the packaging because of that, it is quite well accepted in the market. Yes, so it is quite well accepted in the market.

Okay. Sir, and when will -- you said that you are expecting in Gujarat to curriculum change for 2 grades for next year. So like current year, they change only subject -- 2 subjects only so in this year, will it be -- will they shift to like changing the curriculum grade-wise or it will be subject-wise only.

Right. It will be grade-wise. Now, it will be grade-wise in both the states. So including Gujarat, it will be grade-wise from next year. And both states have announced more than 2 grades changing. So now announcements, we know preparations are already on. So they will be on time this time.

So sir, Gujarat also has released the overall, the phase like Maharashtra is going for plan 1 to 12 like which is here they can't move. That Gujarat also given that time line or they have just provided timeline for the next year only?

So unfortunately, none of the state government announces in advance for next 4 years, what old curriculum will they change. They always announced around a year ago. So for next year only, they have announced. They have not announced for the subsequent years.

Got it, sir. And then last question, sir. Can you provide what was Indiannica revenue and loss in 1Q '26?

Kalpesh, you'd like to say this?

Arihant, can you repeat the question, please? Indiannica revenue.

Revenue and PAT in 1Q '26?

Q1, right?

Yes, Q1.

So it's revenue is about INR 3 crores and PAT is about INR 7 crore.

PAT would be -- it would be loss, right, on Q1 or it is...

Loss.

Loss of INR 7 crores?

Yes.

So just to clarify, for Indiannica, Q4 is always the right quarter to see. So the rest of the 3 quarters, we'll always see very negligible revenue.

Sure, sir. And just one last, can you please tell from start of the year since January '25, how much paper prices would have fallen?

From January till now, I would say 6% or so, it would have fallen -- not 6%, even 5%, it would have fallen up to March. Thereafter, there are no fall in the prices.

The next question is from the line of Niraj Mansingka from White Pine Investment.

Sir, I just wanted some color from you on the CBSE attempt that you are trying to get into the curriculum. Earlier, you had said that you had approached 8,500 schools and expected a very high conversion. Can you give some thoughts on what is the status? And when can we see a reasonable revenue starting from CBSE side?

Now, I know I've been talking about this for the last 2 years, and we are making our efforts to reach -- now we are reaching almost 10,000 schools, CBSE schools. The acceptance of all the ranges of product in the school is still we are not able to see that. And that is the reason the revenue per school is not really coming in as we were expecting. No doubt, there are established players from the north who are almost 50, 60, 70-year-old operators or publishers, and we are really fighting with them for the order. The only advantage that we believe we have is the digital offering with the all the textbooks and it is quite extensive. And that should make schools accept our products faster than the competition. And the new books that have come up is basis NEP 2020 and that really -- our products are standing out compared to competition. So we believe we should be winning quite fast now. But I would not like to give comment on this as for the last 2 years, I've been talking about the same. But we are making our efforts very, very hard to get the more and more books recommended in the school.

But some color would be useful like that you are just -- you see maybe next few years, we can get in because this is a very large market and hence our...

Your voice is cracking, Niraj. Sorry.

Is it okay now?

Some disturbance. So the color -- you are asking the color on the outcome in future, right?

Yes, because that would -- it would explain us how -- give more comfort on how we are moving ahead. That's all.

So color -- not color, but the reality is that we should be at least growing by 15%, 20% every year, which we are not able to show that. But now this is our current year's performance. I think lots of restructuring has gone in our sales team, our marketing team. And accordingly, we will try to push. So next year, I would like to be conservative because I have not been able to deliver, as I said earlier. But next year, 12% to 15% growth in the CBSE textbook business should be definitely achievable.

Niraj, does that answer your question?

Yes, it does. Yes, it does.

The next question is from the line of [ Nikhil from SiMPL ].

Yes. My question was on exports. See, sir, you mentioned that we -- like between countries -- in one of the questions that between countries, it's only the labor cost where we had an advantage. Now for the time being, if we say India does not set up like stabilize at 50%, but if we stabilize at 25% and some of the Southeast Asian countries are between 20% to 15%, would our exports still be like competitive or we would be at par? Where would we stand?

I would say we will be at par. The advantage that Navneet has with the present customers that with most of the customers, we are now tagged as preferred vendor. And therefore, apart from the pricing, the other aspects of the business, which includes delivery, quality, consistency in quality, on that, we will always have a better edge. And therefore, even if we will be at par, I think we will have better advantage over the other countries. And these basic discussions have already happened with the buyers, and they are giving full confidence that, of course, we are always preferred vendor. But now with respect to substantial change in tariffs, they are not sure how will they react to that.

Sure, I understand that. I'm just trying to understand it up to what place we are competitive. That was the question. Secondly, sir, on the domestic stationery part, now we've talked about it that we would be launching and we would be increasing our presence, I'm just trying to understand what is preventing us from like entering the market aggressively on the non-paper stationery. Like is it the team? Or is it like the -- like what differentiation on product...

Yes. Let me clarify. So actually, we are not in trading business wherein we acquire or we buy various products and a couple of categories and introduce in the market. We are not doing that. We are conceptualizing ourselves. We are trying to put up our own plans for its long-term sustainability and that is taking little time. And unless we have full category rather a couple of categories with full range, it would not be advisable to spend heavily on sales and marketing. And therefore, we are not able to see better number in a short-term. We have just started launching from Q4 '25. So I think we will need at least couple of quarters to compile our range for the category that we have introduced. And then you will definitely see good awareness of our product category across all channels.

And our pricing versus the existing players, so would we be pricing it at a premium? Or would it be like equivalent pricing, considering the Navneet's brand positioning and brand being a legacy brand and our reach so strong with the retailers, how are you thinking on the pricing?

No, we will remain competitive only and will not launch any premium products to start with. Whatever we may say, we are known brand in paper category and not in non-paper category, where other brands are already quite well entrenched for a couple of years. So we will not introduce premium products, but we will be competitive to them.

Okay. And one last question. Conceptually, as you said, we are a strong brand in the paper category and the retailer knows Navneet as a brand. When we move to non-paper category, why does the same leadership cannot shift? Like why won't the retailer like the product because he has the comfort on the paper category with us. He has the relationship. So why can't that brand be moved on the non-paper...

See, we -- every company has to have an entry strategy. So our present strategy is to introduce at a competitive price. We just try to increase volumes, and then we will definitely plan to bring in premium products with premium pricing.

Okay. And our plants are already in place like for the manufacturing and all or...

Yes. For one of the category, it is in place. For other category, we are at present outsourcing. We will see the volumes. The infrastructure is already in place, except the machinery. So once we achieve certain volumes, we will invest in machineries also.

The next question is from the line of Himanshu Upadhyay from BugleRock PMS.

Bookkeeping question. Out of last year, INR 664 crores of stationery exports, how much was to U.S. only out of that INR 664 crores?

So you can consider around 75% of the exports are to the U.S. It varies a bit 2%, 3% every year, but around 75% one can consider for any mathematical calculations.

And what are the opportunity? And are there any large market in the 25% where a single market contributes 5%, 10% or...

It is spread across Europe, Africa and very little to Middle East.

And one more thing, just a question. See, when we look at Britannica --- the Indiannica, the business is majorly Q4 driven, okay, or Q3, Q4. And the other business is Q1 and Q2 driven, okay, the Navneet business. Is there any possibility of merging that company and the same person able to do more with 2 separate boards?

Yes. So as far as merging is concerned, we are seriously considering that in near future. But with respect to usage of same team members will not be possible on 2 counts. The quality of sales representative required in CBSE school and in SSC school are quite different. Secondly, as far as CBSE business is concerned, it is not restricted to Maharashtra, Gujarat, but it is across India. And therefore, in the -- other than Maharashtra Gujarat, in any case, we have to have additional members. So we may not be able to really leverage the strength that we have for our state-level curriculum business.

The next question is from the line of Arihant from Bowhead.

Sir, just wanted to know the CapEx, what would be our CapEx for this year and next year?

So this year, overall CapEx would be around INR 90 crore. And subsequent year, I'll be very frank, depending on the outcome of exports opportunity, we will decide finally. Our decision was to invest around INR 150 crore. But now that we will decide this is the outcome of the present situation, we may not then end up investing that much. But otherwise, if things are in favor of for India and Navneet, we would end up investing around INR 150 crore.

The next question is from the line of Himanshu Upadhyay from BugleRock PMS.

Yes. A small question on the digital. When you stated that this is booked compulsory as a book, okay? And initially, we were targeting various other segments also. So for the tuition teachers and classes we can cater to show a product. So are we right now only -- are those products continuing or we have just consolidated into 2 products only one for school and one for with book? Some thoughts...

So you can, yes, broadly say that we have consolidated in 2 areas only, which is one for school, few of them are for students as well and other is together with the textbook or other -- together with our book -- physical book. So basically, 2 areas only now we are focusing. We are not focusing classrooms, which we then realized. It was during pandemic, we were very hopeful of spreading digital, but then everyone realized the acceptability of digital solutions. And then we -- as you know, we reduced our various expenses on every front in digital compared to FY '21 and '22. So now we have only 2 areas there where we sell our digital product.

And the sales team for the digital is the same as the publishing team with the books-only. The person who is going to school is selling both digital and publishing business.

Yes. Yes, yes.

And on the product development side, on the digital, what type of CapEx we need to do every year further, let's say, as -- just let us think it is as a call center. So what type of cost are recurring cost in that?

So with this change in curriculum, every time even the content will have to be created afresh. So it would be around INR 8 crore to INR 9 crore of cost that we'll have to incur on creating new content. And I think beyond that, there will not be any recurring cost apart from the salaries that we pay to the staff who converts this. So when I said INR 8 crore to INR 9 crore, it is majorly content creation and specific content required that cost. But otherwise, there are so many other activities that we do, which I just mentioned about having lots of digital component together with the books. So that team cost will also continue to be spent on. So altogether, you can say around INR 15-odd crore will be the cost till the curriculum cycle stops. So INR 15 crore to INR 17 crore, we would be spending on digital.

And on CBSE, are we thinking to [ attend ] now or reaching for those because earlier we were -- [ it's taken ] till more on eighth standard. So with the guide and reference books for...

Yes. So this year, we have already introduced a reference material, means a couple of digests and workbooks for only one standard to start with. Because curriculum change is happening, we don't want to really rush with the old curriculum. But first standard, we have already introduced in the current year. So now to your question, we will be there up to 10th, particularly 9th and 10th for the supplementary books.

You are saying for CBSE also?

Only CBSE, I just spoke about.

As there are no further questions, I now hand the floor over to the management for closing comments.

So once again, I take this opportunity to thank everyone for joining the call. I hope we have been able to address the queries that were raised. For any further information, you can get in touch with our Investor Relations department that is Roomy Mistry. And thank you, Prabhudas Lilladher once again.

Thank you very much. On behalf of PL Capital, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.

Thank you, everyone.