Summary
S Chand And Company Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026, 01:30 P.M.
Event Participants
Executives 3 Atul Soni (Head – Investor Relations, Strategy and M&A), Himanshu Gupta (Managing Director), Saurabh Mittal (Group Chief Financial Officer)
Analysts 3 Amit Agicha (HG Hawa & Company), Giriraj Daga (Visaria Family Trust), T S Vinod (TVS Family Office)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹99.0 crores | Q3 revenue impacted by shifting of a large segment to Q4 due to syllabus revisions. |
| PAT Loss | ₹(28.7) crores | Reflected seasonal marketing intensity and revenue timing shifts; expect recovery in Q4. |
| AI Dataset Licensing Revenue | ₹17.1 crores | Reported for 9M FY26; management expects to exceed ₹30.0 crores for full FY26 (+54% YoY). |
| Net Working Capital Days | 143 days | -9 days YoY; achieved lowest Q3 levels in company history. |
| Inventory Days | 316 days | -50 days YoY; significant improvement driven by focused inventory management. |
| Net Cash | ~₹120-125 crores | Projected for FY26 end; expected to increase to ₹150+ crores by June 2026. |
Geographic & Segment Commentary
- International Curriculum: Acquired CPD Singapore in January 2026 to target the 1,000+ IGCSE/IB schools in India and 10,000+ globally. This acquisition fills a strategic gap, providing international curriculum capabilities for South Asia and Middle East markets.
- K-12 (CBSE/ICSE): Anticipating maximum adoption of the National Curriculum Framework (NCF) syllabus in FY26 and FY27. Management noted that physical availability of NCERT books for classes 4, 5, 7, and 8 remains a watchpoint.
- Digital Initiatives: SmartK and TestCoach (specifically CUET) are seeing higher enrollments. The S Chand Academy YouTube channel serves as a strategic marketing funnel rather than a direct monetization tool.
Company-Specific & Strategic Commentary
- AI Dataset Licensing: Management is pivoting toward higher-quality datasets, including video and illustrations for LLMs. While pricing has rationalized, exponential volume growth is expected to drive a 50%+ YoY revenue increase in FY26.
- M&A Strategy: The CPD Singapore acquisition marks the 1st international entry; the company remains actively engaged in looking for gap-filling acquisitions that do not require material cash outgo.
- NCF Adoption: The transition to the new curriculum is taking 5-6 years compared to historical 2-3 year cycles. Higher realizations are expected from new curriculum books due to updated content and pricing.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Annual Revenue | >₹800 crores (FY26) | Management remains “quite confident” despite needing ₹550cr+ in Q4; driven by seasonal sales. |
| EBITDA Margin | 18% - 20% (FY26) | Driven by product mix, higher-margin AI licensing, and better realizations from new curriculum. |
| Long-term Growth | 8% - 10% | Normalized growth expectations for traditional publishing post-NCF implementation. |
Risks & Constraints
| Risk | Context |
|---|---|
| Syllabus Delays | Government delays in NCF implementation have spread the expected growth “kicker” over 5-6 years instead of 3, diluting short-term impact. |
| Competition | NCERT’s ramp-up in in-house printing capacity poses a volume risk, though management argues private books remain more comprehensive. |
| Seasonality | Heavy reliance on Q4 (requiring >₹550cr revenue) creates high execution pressure in the final quarter of the fiscal year. |
Q&A Highlights
National Curriculum Framework (NCF) Impact
- Question: Which classes have moved to the new curriculum for the next academic year? (Niteen Dharmawat)
- Answer: Classes 4, 5, 7, 8, 9, and 10 have moved. Full implementation across all schools is expected over the next two years, providing a sustained boost (Himanshu Gupta).
AI Dataset Licensing
- Question: Who are the counterparties and what is the revenue potential? (Amit Agicha)
- Answer: Counterparties are leading global tech players under confidentiality. The segment has the potential to become 10-15% of revenue as the company expands into video and illustration datasets (Saurabh Mittal).
Capital Allocation & Buybacks
- Question: Is the management considering a buyback given the cash position and revised tax laws? (T S Vinod)
- Answer: The company is open to the idea. Discussions will occur in the May board meeting based on year-end liquidity and M&A requirements. Net cash is expected to reach ₹150cr+ by June 2026 (Saurabh Mittal).
Inventory and Returns
- Question: How are sales returns trending? (T S Vinod)
- Answer: Returns are contained within the 15% range. Management expects this to trend lower by ~100 bps once the syllabus transition is fully completed (Saurabh Mittal).
Key Takeaway
S Chand delivered a transitional Q3 FY26, marked by the strategic acquisition of CPD Singapore to enter the high-growth IGCSE/IB market and a significant expansion in AI dataset licensing, which is projected to grow 50%+ to over ₹30 crores this fiscal. While Q3 revenue of ₹99 crores was affected by syllabus-related timing shifts, management reiterated its full-year guidance of ₹800 crores+ revenue and 18-20% EBITDA margins, necessitating a record Q4 performance. The company achieved its lowest-ever Q3 inventory levels at 316 days, showcasing operational discipline. Strategic focus remains on navigating the multi-year NCF rollout, which is now entering a peak adoption phase for secondary classes. With net cash projected to exceed ₹150 crores by Q1 FY27, the company is well-positioned for potential capital over-distribution or further gap-filling acquisitions.
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