Navneet Education hits a new high, again!

Navneet Education has been on a roll since 8th June when it hit a new high at Rs.189.80 and then on 9th at Rs.191.40 and today morning at Rs.193.05. It has cooled off since and is now actually down in the red.

The company is a big beneficiary of the oncoming GST. The GST Council yesterday announced relief for small and medium enterprises in trading and manufacturing and for restaurants, and reduced the previously determined GST rates on 66 categories. Amongst them, stationery products stand to benefit.

The GST Council has reduced GST rate on Children drawing books from 12% to nil; that on school bags from 28% to 18%; on exercise books from 18% to 12%.

But talking to Bloomberg about this development, the company’s MD said that he did not really much of an advantage as compared to the 5% VAT it was paying earlier. So for the company, this remains a higher tax. It plans to hike prices to the tune of 3% for these products, effective October, which is the beginning of the next manufacturing cycle.

Textbooks make a 20% contribution and drawing book 10% to its total topline.