NCERT Syllabus Rollout Will Expand Education Market

Key Takeaways

• New syllabus adoption, digital initiatives, and structural education market expansion position S Chand for robust, diversified, and sustainable revenue growth.
  
• Operational efficiencies and strong cash flows support improved margins and enable strategic portfolio expansion through internal investments and acquisitions.
  
• Heavy dependence on government policy, curriculum shifts, limited digital uptake, and evolving content licensing models are increasing revenue risks and compressing earnings predictability.

Catalysts

S Chand and Company Limited, an education content company, develops and delivers content, solutions, and services for the early learning, K-12, and higher education segments in India.

• The upcoming full implementation of the new NCERT syllabus across classes (phased between FY '26 and FY '27) is expected to drive significant volume growth in textbook sales as schools update learning materials, supporting higher revenues in the core business.
  
• S Chand's ongoing investments in digital content licensing and AI data set monetization are beginning to gain scale, with expanding client engagement and a much larger addressable market, setting the stage for recurring, higher-margin revenue streams that diversify beyond traditional publishing.
  
• Continued cost optimization through integrated warehousing, automation, and upgraded printing capacity is likely to sustain and possibly improve net margins by reducing operating costs and delivering 15–20% gains in production and distribution efficiencies over the next few years.
  
• Strong cash flows and historic lows in working capital and receivable days enable internal funding for strategic M&A in test prep, international, and regional segments, accelerating portfolio expansion and driving long-term earnings growth.
  
• Rising literacy rates, increased education spending by the government, and ongoing NEP 2020 implementation continue to structurally expand the overall education market, providing multi-year tailwinds to S Chand's topline and positioning the company for durable, above-industry revenue growth.

S Chand Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming S Chand's revenue will grow by 13.4% annually over the next 3 years.
• Analysts assume that profit margins will increase from 7.3% today to 13.6% in 3 years time.
• Analysts expect earnings to reach ₹1.4 billion (and earnings per share of ₹39.94) by about August 2028, up from ₹523.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.9x on those 2028 earnings, down from 13.2x today. This future PE is lower than the current PE for the IN Media industry at 24.8x.
• Analysts expect the number of shares outstanding to decline by 0.55% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.96%, as per the Simply Wall St company report.

S Chand Future Earnings Per Share Growth

Risks

• Persistent high competition from both organized and unorganized private publishers, as well as the significant market presence of NCERT/government textbooks, could continue to limit S Chand's ability to grow volumes and adversely impact revenue and pricing power, compressing net margins.
  
• The slow, fragmented, and unpredictable rollout of the new NCERT curriculum under NEP is leading to delayed and piecemeal sales opportunities; this implementation volatility increases uncertainty around growth and revenue realization in the coming years.
  
• Despite company efforts, there is still limited adoption of digital learning tools in schools, undercutting the anticipated offset to potential stagnation or decline in core print textbook revenues and risking long-term earnings growth if secular trends accelerate digital over print.
  
• Heavy reliance on government decisions and policies regarding curriculum changes introduces structural risk-delayed or abrupt policy shifts could result in missed sales seasons, uneven demand, increased operating costs (due to rapid content revision needs), and revenue uncertainty.
  
• The company's expansion into content licensing and AI datasets is increasingly dependent on outsourced rather than proprietary content, which could erode segment margins over time; additionally, most content licensing deals are moving to perpetual (one-time) rather than recurring models, limiting the sustainability and predictability of future earnings from this vertical.

Valuation

• The analysts have a consensus price target of ₹286.0 for S Chand based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be ₹10.4 billion, earnings will come to ₹1.4 billion, and it would be trading on a PE ratio of 9.9x, assuming you use a discount rate of 13.0%.
  
• Given the current share price of ₹195.28, the analyst price target of ₹286.0 is 31.7% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.