Why did S Chand stock fall despite best-ever results and Rs 1,036m net cash?

S Chand and Company Limited shares declined 3.17% on May 23, 2025, closing at ₹226.00 despite reporting its best financial results since FY2019. The stock slipped from the prior close of ₹233.41, dipping as low as ₹220.21 intraday, largely due to profit-booking. While trading volumes stood at 1.18 lakh shares on the NSE with a delivery-to-volume ratio of 48.81%, no major block deals or institutional buying were recorded. The muted post-result action reflects cautious positioning rather than a fundamental reassessment, especially in a mid-cap segment facing volatile sentiment.

How Strong Was S Chand’s Financial Performance in FY25?

S Chand’s FY25 performance established new highs across revenue, profitability, and margin indicators. The company reported ₹7,197 million in operating revenue, a 9% increase year-on-year. Gross margins touched a record 68.2%, translating into ₹4,907 million in gross profit. EBITDA climbed to ₹1,350 million, marking a 23% YoY increase. Operating income surged by 65% to ₹798 million, while net profit grew 18% to ₹602 million.

The company also reported an EBITDA margin of 18.8%, positioned at the upper end of the guided range of 17–19%. S Chand has now delivered over ₹1,000 million in annual operating cash flow for five consecutive years, with FY25 producing ₹999 million. Net cash improved to ₹1,036 million from ₹600 million in FY24, and the company remains debt-free.

What Made FY25 a Breakout Year for S Chand’s Working Capital and Liquidity?

The company recorded the best Q4 working capital efficiency in its history. Receivable days fell nearly 50% and net working capital days dropped by 48% compared to FY21. These improvements were a result of rigorous operational discipline, digitised distribution workflows, and strategic collection cycles, especially during the seasonal book delivery phase.

The liquidity impact was substantial. S Chand declared an interim dividend of ₹4/share for FY25, up from ₹3/share in FY24. CFO Saurabh Mittal attributed the enhanced dividend and strong liquidity to “sustained operating cash flows and long-term capital prudence.”

How Will New NCERT Books Shape S Chand’s Growth in FY26?

Curriculum reform under India‘s National Curriculum Framework (NCF) is expected to be a major growth catalyst for FY26 and beyond. In FY25, new NCERT books were introduced only for classes 3 and 6. However, the CBSE issued a March 2025 circular confirming syllabus updates for classes 4, 5, 7, and 8 in the coming academic cycle.

Managing Director Himanshu Gupta noted that this rollout will significantly increase demand for updated textbooks, benefiting S Chand’s K–12 portfolio. The company’s existing reach in CBSE, ICSE, and several state boards positions it to absorb a large share of replacement demand. Management has guided FY26 revenue to cross ₹8,000 million and raised its EBITDA margin outlook to 18–20%.

What Is Driving Long-Term Investor Sentiment Toward S Chand?

While institutional flows were subdued on result day, analysts view S Chand’s debt-free status, consistent dividend record, and textbook market leadership as strong fundamentals. The P/E multiple of 17.54 suggests balanced valuation with room for upward re-rating should textbook adoption trends accelerate.

Investor confidence is also tied to management’s continued commitment to digital innovation. The company’s platforms — TestCoach, SmartK, Mylestone, and myStudygear — are increasingly contributing to its hybrid growth strategy. With over 11,000 titles and exports to more than 20 countries, S Chand is developing a global education content footprint.

How Is S Chand Planning to Expand Its Market Position in FY26?

Strategically, S Chand plans to leverage multiple fronts in FY26. First, it will deepen its presence in CUET and competitive exam prep via TestCoach. Second, it will continue to monetise content through AI-powered learning platforms. Third, the company remains open to inorganic acquisitions that enhance its product mix, especially in digital education and regional content.

According to CFO Saurabh Mittal, these plans align with the company’s long-term goal of building “a sustainable content ecosystem that combines traditional publishing, modern edtech, and data-informed content delivery models.”

What Are the Key Risks and Opportunities for S Chand Going Forward?

Opportunities lie in nationwide textbook refresh cycles, state board alignment with the NCF framework, increased digital penetration in schools, and export-led curriculum sales. However, the path is not without challenges. Delays in curriculum rollouts, intensified pricing competition, or lower-than-expected demand in semi-urban and rural areas may affect topline growth.

Still, S Chand’s leadership in curriculum content, wide distribution network, debt-free balance sheet, and consistent operational performance make it a frontrunner in India’s education publishing transformation.

S Chand and Company has delivered an exemplary FY25 marked by disciplined execution, financial efficiency, and strategic foresight. From net cash growth and record EBITDA to positioning ahead of the NCERT syllabus cycle, the company is clearly aligning itself for durable growth. While market participants exercised caution in the immediate aftermath of the results, the medium- to long-term outlook remains constructive — especially if the curriculum reform process accelerates nationwide in FY26.

With its content depth, operational agility, and growing digital footprint, S Chand is not only navigating the education publishing transition — it is helping define it.