Financial Performance Highlights

  • H1 FY27 Total Income: ₹70.06 crores, representing 74% year-on-year growth
  • H1 FY27 Net Profit: ₹9.71 crores, representing 29% year-on-year growth
  • H1 FY27 EBITDA: ₹14.63 crores compared to ₹11.71 crores in corresponding period last year

Business Strategy and New Initiatives

Notebook Manufacturing Expansion:

  • Acquired notebook manufacturing machinery for greater control over product quality, customization, and supply timelines
  • Introduced own notebook brand "PageCraft" with expected turnover of ₹20-25 crores
  • Manufacturing capacity of ₹30-40 crores with current machinery
  • Converting traded notebook business (previously 10-12% of turnover) to manufactured products

Pelican EduSupply Platform:

  • Integrated educational requirements offering (textbooks, notebooks, academic supplies)
  • Onboarded 100 schools for the coming academic year
  • E-commerce vertical generated ₹25 crores turnover last year with 100 schools onboarded
  • Targeting ₹50 crores turnover from this segment

Technology Partnerships:

  • Arrangements with Wiki Kids for interactive classroom displays (IFT panels)
  • Sole distribution partnership for India with margin of approximately 10% on panels sold
  • Currently in pilot phase to assess adoption rates and service requirements

Acquisition Update

Hara Communications Private Limited Acquisition:

  • Acquisition cost: ₹10-15 crores
  • Expected completion: By December 2026 (share swap and consolidation)
  • Assets include land, premises, software, and machinery
  • Current financials: Approximately ₹40-50 lakhs negative PAT
  • Strategic rationale: Combining software with textbooks as bundled offering to schools
  • Funding: ₹7-8 crores bank loan increase, balance from receivables

Operational Challenges and Responses

Raw Material Price Pressures:

  • Paper prices increased from purchase price of ₹78-81 to current ₹93 (expected to reach ₹100)
  • 90% of required raw material purchased in advance at lower prices
  • 10% remaining to be purchased at higher prices but minimal overall impact
  • Planning 10% MRP increase to offset cost pressures

Margin Compression:

  • Current margins around 20-21% (down from historical levels)
  • Primary reasons: Raw material cost increases and higher marketing spend
  • Full-year PAT margin guidance maintained at 14-16%

Working Capital Management:

  • Receivables increased due to higher turnover
  • Implementing cash discounts for faster collections
  • Targeting positive operating cash flow for FY27 (previous year: negative ₹23 crores)
  • Inventory increased to ₹55 crores (from ₹35-36 crores in Q1) due to advance raw material purchases and production for coming season

Debt Position

  • Current debt: ₹14-16 crores
  • Additional debt planned: ₹7-8 crores for Hara Communications acquisition
  • Debt repayment through EMI model without bulk payments

Future Guidance

Revenue Targets:

  • FY27: ₹150 crores (±10%)
  • FY28: ₹225-230 crores

Margin Outlook:

  • PAT margin expected to average 14-16% for full year FY27
  • Q3 and Q4 typically stronger due to reduced marketing spend and higher turnover
  • Seasonal business pattern differs from competitors due to geographic diversity across 13 states

Receivables Information

  • Receivables outstanding: Approximately ₹85 crores as of September 2026
  • 80% of previous year's receivables (₹91.5 crores turnover) collected by October-November
  • New business receivables of ₹40-45 crores expected to be recovered in 30-90 days
  • Less than 20% of receivables aged more than 6 months

Conference Participants

Management:

  • Mr. Harish Dachepalli - Executive Director
  • Mr. Abhinav Dachepalli - Executive Director

Moderator:

  • Mr. Gautam - EquiBridgeX Advisors Private Limited