Navneet Education · risk themes across the available quarters.
Bear-case history
Tariffs causing ~10% price reduction (₹100 to ₹90 realization) and 10-15% volume decline due to US inflation. No clarity on resolution timeline from government or industry bodies. Export EBITDA margin compressed from 15% to 5%.
Despite weekly product showcases to US customers, most have kept orders for newer stationery categories (metal products, canvas, expanded file/folder) on hold due to tariff uncertainty. Volume recovery contingent on tariff resolution.
Analyst Rajan Sha raised concern that recent market corrections have reduced valuations for quality companies by 50%+ (citing Godrej Properties example). Urged board to consider selling 50% of ~₹900 crore stake (~13% holding at ₹6,550 crore valuation) to lock in gains before potential de-rating.
Management confirmed UAE facility will incur operational loss in first year (FY27) before turning profitable in subsequent year. Higher labor costs in UAE vs India will keep margins lower than India operations even after stabilization.