DACHEPALLI PUBLISHERS H1 CONCALL : TOTAL INCOME JUMPS 74%, PAT GROWS 29%; MANAGEMENT TARGETS ₹150 CR FY27 TURNOVER & ₹225–230 CR FY28 TURNOVER

MANAGEMENT GUIDANCE & OUTLOOK • MANAGEMENT TARGETS FY27 TURNOVER OF APPROXIMATELY ₹150 CR (±10%), WITH PAT MARGIN GUIDANCE OF 14–16%, LATER INDICATED AT 14–15% • MANAGEMENT TARGETS FY28 TURNOVER OF ₹225–230 CR, IMPLYING APPROXIMATELY 50–53% GROWTH OVER ITS ₹150 CR FY27 BASE TARGET • MANAGEMENT EXPECTS STRONGER H2 FY27 PERFORMANCE, SUPPORTED BY SEASONAL TEXTBOOK DISPATCHES, LOWER MARKETING EXPENSES & CUSTOMER COLLECTIONS • MANAGEMENT EXPECTS POSITIVE OPERATING CASH FLOW FOR FY27, DEPENDENT ON RECEIVABLE COLLECTIONS & INVENTORY CONVERSION • MANAGEMENT TARGETS ₹20–25 CR TURNOVER FROM PAGECRAFT NOTEBOOKS, WITH EXISTING MACHINERY OFFERING ₹30–40 CR ANNUAL REVENUE POTENTIAL FINANCIAL PERFORMANCE & BUSINESS DEVELOPMENTS • H1 FY27 TOTAL INCOME GREW 74% YOY TO ₹70.06 CR, WHILE EBITDA INCREASED 24.9% TO ₹14.63 CR • H1 NET PROFIT GREW 29% YOY TO ₹9.71 CR, WITH IMPLIED PAT MARGIN AT 13.9% OF TOTAL INCOME • H1 EBITDA MARGIN DECLINED TO 20.9% FROM APPROXIMATELY 29.1% YOY, REFLECTING HIGHER PAPER COSTS & MARKETING EXPENDITURE • SEPTEMBER-END TRADE RECEIVABLES STOOD AT ₹87.55 CR, EXCEEDING H1 TOTAL INCOME OF ₹70.06 CR & HIGHLIGHTING WORKING CAPITAL PRESSURE • INVENTORY INCREASED TO APPROXIMATELY ₹55 CR FROM ₹35–36 CR AT Q1-END, WHILE MANAGEMENT INDICATED THAT AROUND 90% OF PLANNED PAPER REQUIREMENTS HAD BEEN PROCURED OR ORDERED EXPANSION & STRATEGIC DEVELOPMENTS • MANAGEMENT EXPECTS IN-HOUSE PAGECRAFT NOTEBOOK MANUFACTURING TO IMPROVE PROFITABILITY, WITH INDICATED PAT MARGIN OF APPROXIMATELY 12% • PELIKAN EDU SUPPLY EXPANDED ITS SCHOOL BASE TO APPROXIMATELY 100 FROM 50, WITH MANAGEMENT ESTIMATING ₹50 CR TURNOVER POTENTIAL; REVENUE RECOGNITION DEPENDS ON THE ACADEMIC-YEAR CYCLE • COMPANY IS EVALUATING HARA COMMUNICATIONS ACQUISITION FOR ₹10–15 CR, WITH PROPOSED BANK FUNDING OF ₹7–8 CR; TRANSACTION REMAINS SUBJECT TO COMPLETION • COMPANY IS PILOTING WIKIKIDS INTERACTIVE CLASSROOM PANELS, WHILE MANAGEMENT PLANS APPROXIMATELY 10% PRODUCT MRP INCREASES TO OFFSET PAPER COST INFLATION • MANAGEMENT REMAINS POSITIVE ON EDUCATIONAL PRODUCT EXPANSION & SCHOOL CROSS-SELLING, BUT HIGH RECEIVABLES, NEGATIVE OPERATING CASH FLOW, INVENTORY BUILDUP, FUNDING REQUIREMENTS & AGGRESSIVE GROWTH TARGETS REMAIN KEY RISKS INVESTOR TAKEAWAY: MIXED — STRONG REVENUE GROWTH & NEW BUSINESS OPPORTUNITIES SUPPORT THE OUTLOOK, BUT EBITDA MARGIN COMPRESSION & HIGH WORKING CAPITAL REQUIREMENTS ARE MAJOR CONCERNS. RECEIVABLE COLLECTIONS, POSITIVE FY27 OPERATING CASH FLOW & EXECUTION OF THE ₹150 CR TURNOVER TARGET ARE THE MOST IMPORTANT MONITORABLES.

Dachepalli Publishers Limited

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