Company Disclosure

S Chand And Company Limited

Management Commentary - Q2FY27

Q2FY27 was a steady quarter for School and Higher Education segments in terms of sales YoY. The company highlights that Q2 is the smallest revenue quarter during the year, focused on marketing initiatives for upcoming sales season.

Key management points:

  • Conscious decision to advance paper purchases in Q2 due to expected double-digit inflation in paper prices
  • Advancement of paper purchases impacts Inventory days and Net Working Capital days for Q2 compared to previous years, expected to normalize by Q4
  • Movement of certain marketing spends from Q3 to Q2 in range of ₹50-60 million, affecting Other expenses comparison for H1FY27 vs H1FY26
  • Company remained net debt free with net cash balance of ₹95 million (vs Q2FY26: ₹235 million), on track to be net debt free for 3 quarters in FY27
  • Content licensing (AI Datasets) revenues billed ₹147 million during H1FY27 vs ₹142 million during H1FY26

Consolidated Financial Performance - H1FY27

| Particulars (₹ millions) | H1FY26 | H1FY27 | Change |

| Revenue from Operations | 1,520 | 1,624 | +7% |

| Gross Margin | 922 | 1,005 | +9% |

| Gross Margin % | 61% | 62% | |

| EBITDA | (693) | (875) | +26% loss |

| EBITDA Margin % | -46% | -54% | |

| Profit before tax | (892) | (1,050) | +18% loss |

| Profit for period | (677) | (856) | +27% loss |

| Basic EPS (₹) | (18.73) | (23.80) | |

H1FY27 Highlights: Revenue increased 7%, Gross Margins increased 9%, higher Other expenses due to preponement of marketing activities led to increased EBITDA and PAT losses.

Quarterly Performance - Q2FY27

| Particulars (₹ millions) | Q2FY26 | Q2FY27 | Change |

| Revenue from Operations | 493 | 478 | -3% |

| Gross Margin | 233 | 200 | -14% |

| Gross Margin % | 47% | 42% | |

| EBITDA | (601) | (778) | +29% loss |

| EBITDA Margin % | -122% | -163% | |

| Profit before tax | (709) | (860) | +21% loss |

| Profit for period | (536) | (669) | +25% loss |

| Basic EPS (₹) | (14.96) | (18.72) | |

Q2FY27 Highlights: Smallest revenue quarter for company, higher Other expenses due to preponement of marketing activities led to increased EBITDA and PAT losses.

Business Segment Performance

Changing nature of business with segments showing different growth patterns:

| Segment (₹ millions) | FY24 | FY25 | FY26 | YoY Growth % |

| K-12 (National Boards) | 4,993 | 5,289 | 5,783 | +9% |

| K-12 (Regional Boards) | 1,138 | 1,164 | 1,327 | +14% |

| Higher Education | 452 | 524 | 534 | -2% |

| Digital | 43 | 220 | 336 | +53% |

| Total | 6,626 | 7,197 | 7,987 | +11% |

K-12 segments growing steadily, acquisition of CPD Singapore driving International Board business, digital businesses scaling rapidly.

Balance Sheet Position

As at September 30, 2026 (Unaudited) vs March 31, 2026 (Audited):

| Particulars (₹ millions) | Sep 2026 | Mar 2026 |

| Total Assets | 12,081 | 13,954 |

| Property, plant & equipment | 933 | 962 |

| Right-of-use assets | 513 | 575 |

| Goodwill | 3,359 | 3,359 |

| Inventories | 2,178 | 1,634 |

| Trade receivables | 2,105 | 3,503 |

| Cash & cash equivalents | 130 | 1,045 |

| Total Equity | 9,510 | 10,507 |

| Equity share capital | 176 | 176 |

| Other equity | 9,384 | 10,364 |

| Non-current borrowings | 155 | 186 |

| Current borrowings | 545 | 697 |

Cash Flow Analysis

| Particulars (₹ millions) | H1FY27 | H1FY26 |

| Cash flow from operating activities | (673) | (387) |

| Cash flow from investing activities | 197 | (205) |

| Cash flow from financing activities | (438) | (35) |

| Net decrease in cash | (914) | (627) |

| Cash at beginning | 1,045 | 960 |

| Cash at end | 130 | 333 |

Working Capital Metrics:

  • Trade Receivables: ₹2,105 million (95 days vs 81 days in Q2FY26)
  • Inventory: ₹2,178 million (307 days vs 237 days in Q2FY26)
  • Raw material paper inventory: ₹755 million (vs ₹469 million in Q2FY26)
  • Net Working Capital: 147 days (vs 123 days in Q2FY26)

Company expects operating flows to normalize by Q4, targeting OCF over ₹1,000 million for FY27.

Shareholding Structure

As of November 5, 2026:

  • Market Capitalization: ₹4,650 million
  • Price: ₹132
  • Shares outstanding: 35 million
  • Face Value: ₹5.0

Key Institutional Investors (as of October 2026):

  • Miri Strategic Emerging Markets Fund: 2.3%
  • Blue Daimond Properties: 2.0%
  • Zen Securities: 1.2%
  • Prudent Investment Flexicap Scheme: 1.0%
  • Trustline Holdings: 0.7%
  • HDFC Balanced Advantage Fund: 0.3%

Minority Investments

Smartivity:

  • Founded 2015, focus on S.T.E.M. Learning and DIY Kits
  • S Chand invested ₹20 million across funding rounds, holds ~16% stake
  • Recent secondary transaction valued company at ₹1,500 million, S Chand investment valued at ₹230 million
  • 1HFY27: Revenue growth >60%, EBITDA and PBT tripled YoY
  • FY26: Revenue >₹750 million (+50% YoY), EBITDA and PBT positive

ixamBee:

  • Founded December 2016, government exam preparation platform
  • S Chand invested ₹30 million for ~4.3% stake in April 2023
  • 1HFY27: Strong revenue growth, EBITDA and PBT positive