Cheaper notebooks and stationery: Navneet Education to transfer entire GST reduction to customers

Navneet Education, a Mumbai firm that is engaged in publishing educational and children's books and producing scholastic and non-paper stationery items, has stated that it will transfer the 12% input cost benefit of the GST reduction to customers. The result will be reduced prices for its products.

The reduction in GST from 12% to 0% on education services and materials such as books and learning aids is likely to aid the company.

Gnanesh Gala, Managing Director, Navneet Education, stated that the company will pass the benefit to end consumers. But he explained that there is no word yet on whether raw materials such as paper bought from mills would also be exempt. If not, the input cost for the publishing business may go up from 12% to 18%.

Gala explained, "Around 95% was exercise and notebooks segment, which today we receive exempted, where the input cost previously was 12% and output was 5%. Presently, thus whatever 12% cut that we will receive on our input cost, that would be the price cut for the end consumers as well. Hence, I am certain that the consumers in general shall be benefited with this rate reduction."

Meanwhile, Gala cited that price reductions alone will not necessarily drive sales growth in the near term, as overall consumption levels have been poor in recent quarters. Nevertheless, he is optimistic that reduced prices would spur demand in the longer term.

The business of the company is seasonal, with the first quarter when schools reopen generating the most sales. The subsequent two quarters tend to be weak, so that the effect of GST cuts will only be evident from the fourth quarter.

On stationery growth, Gala said it comes in two segments: exports and domestic sales. Exports have slowed somewhat because of US tariffs, and the outlook remains unclear. On the domestic side, which contributes roughly ₹400 crore as well, the firm looks for much better numbers in the upcoming quarters.