Chetana Education Ltd Management Discussions

<dhhead-MANAGEMENT DISCUSSION AND ANALYSIS</dhhead-

Industry Structure and Developments

India operates one of the largest school education systems in the world, with over 1.47 million schools and approximately 247 million students enrolled across Grades 1 to 12 (UDISE+ 2024-25). The K-12 content and publishing industry — comprising textbooks, workbooks, supplementary and digital learning material for CBSE, ICSE and State Boards — continues to be a large and structurally growing segment of Indias broader education ecosystem, which independent estimates place in the range of USD 100-130+ billion, expanding at a double-digit CAGR through the next decade.

The academic year 2025-26 marks the first full year of implementation of the National Education Policy (NEP) 2020 across schools nationally, including the roll-out of the National Curriculum Framework (NCF) 2022/2023 and the phased introduction of the PARAKH continuous, competency-based assessment framework in place of the traditional year-end examination model. This has triggered a curriculum-wide textbook redesign cycle, creating sustained replacement demand for NEP/NCF-aligned content across publishers, and has accelerated demand for foundational literacy and numeracy material, Indian Knowledge Systems (IKS)- integrated content, art-integrated and experiential learning resources, and multilingual instructional material.

The industry is also undergoing a structural shift from a print-only model towards an integrated "phygital"

(physical plus digital) model. Following the post-pandemic normalisation of the standalone EdTech sector, schools and parents are increasingly favouring blended offerings — QR/ App-linked digital content bundled with print textbooks, teacher-empowerment platforms, and school-branded OTT/ LMS solutions — over stand-alone digital subscriptions. Government thrust on affordable, regional-language and inclusive education, together with rising private and institutional (including government tender-based) procurement of academic material, is widening the addressable market for established, asset-light publishers with strong distribution and authoring networks.

The industry remains fragmented, with a large number of regional and national publishers competing on curriculum alignment, content quality, pricing, distribution reach and, increasingly, on the strength of the digital/technology layer wrapped around print content. Companies that combine curriculum depth, multilingual capability, distribution scale and digital/OTT innovation are best positioned to consolidate institutional relationships and capture a larger share of the schools overall academic spend.

Opportunities and Threats

Opportunities

- NEP 2020/NCF-driven replacement-cycle demand for curriculum-aligned print and digital content across CBSE and State Board segments.

- Deepening institutional relationships through the Smart School Programme, a 2-3 year bundled partnership model (textbooks, notebooks, DOTTSTAR OTT access, Books & Beyond and Interactive Flat Panels).

- Scaling of DOTTSTAR — Indias first school-branded OTT platform, operated through wholly owned subsidiary, Dijaa Education Private Limited (WOS)— as a SaaS-based, highstickiness recurring revenue stream.

- Cross-selling opportunities within the existing institutional and distribution network through the Stationery Division producing notebooks, leveraging the Companys 600+ distributor/dealer network and 19 branch offices without material incremental infrastructure.

- Entry into competitive-exam-readiness content (IIT-JEE/ NEET) through the strategic content partnership with Physics Wallah on the DOTTSTAR platform, extending the Companys addressable offering beyond core K-12 curriculum.

- Emerging Government and institutional supply opportunity, following the Companys first-ever government tender secured during the year for supply of books to schools in Maharashtra.

- The Company is continuing to deepen its reach in the existing National locations.

- Multilingual content capability (English, Hindi, Marathi, Gujarati, Kannada and Tamil) supporting deeper penetration into regional and semi-urban markets that increasingly demand localised, NEP-aligned material.

Threats

- A highly fragmented and competitive publishing landscape, with regional and national publishers, as well as free/low- cost digital content, exerting pricing pressure.

- Working-capital intensity inherent to institutional/school- channel sales, reflected in elevated trade receivable and inventory cycles tied to the academic calendar reflecting high seasonality to the entire business.

- Regulatory or curriculum-policy changes at the State Board level that could require unplanned content redevelopment.

- Input cost volatility, particularly paper and printing costs, which could compress margins given the asset-light, outsourced-manufacturing model.

- Execution risk associated with scaling newer, technology- led verticals (DOTTSTAR, Books & Beyond AI tools, Smart School Programme) profitably and in a manner that converts pilot/proposal-stage engagement into contracted, recurring revenue.

- Dependence on a concentrated academic-season sales cycle and on continued renewal of institutional relationships, distributor performance and timely collections.

Business/Product-wise Performance Review

The Companys primary business continues to be knowledge- based, engaged in educational book publishing for the CBSE/ State Board curriculum for the K-12 segment across print and digital formats, and accordingly this continues to be the only reportable segment under Accounting Standard 17 Segment Reporting. Within this single reportable segment, the Companys FY26 performance was driven by the following product/business lines:

Educational Books (Print Publishing)

The Companys core print business crossed 1,000+ titles across 18+ distinct academic brands, spanning Maharashtra State Board and CBSE curricula from Pre-Primary to Higher Secondary. Over 90 lakh books were produced during FY26, supported by the Companys asset-light, outsourced printing and binding model and its distribution network of 600+ distributors and dealers across 18 states and 19 branch offices backed by its own logistics warehouse in Bhiwandi, outskirts of Mumbai, Maharashtra.

QR-Enabled Phygital Content

The Companys QR-enabled book portfolio continued to scale, giving students and teachers access to 35,000+ NEP-aligned educational videos and interactive learning modules through a dual-QR (theory + solutions) architecture, reinforcing print-to-digital engagement without additional infrastructure investment by schools.

DOTTSTAR — OTT Learning Platform (Dijaa Education Private Limited)

DOTTSTAR, operated through the Companys wholly-owned subsidiary Dijaa Education Private Limited, is a SaaS-based, custom-branded, ad-free OTT platform enabling schools to run their own digital broadcast channel integrated with the Companys curriculum-mapped video library and academic- partner content (Physics Wallah, Aditya Birla Education Trusts

Mpower initiative, and Chin2 Bhosle). The platform was deployed and validated across various schools during the yea and continues to be positioned as a recurring, high-stickiness institutional revenue stream.

Books & Beyond — Teacher Empowerment Platform

Books & Beyond, offered free of cost to schools adopting Chetana titles under a One Nation, One Solution philosophy, was enhanced during FY26 with an Al-powered Pre-Primary Learning Companion offering lesson plans, rhymes, phonics and interactive activities, in addition to its existing lessonplanning, worksheet and assessment tools for primary and secondary educators.

Smart School Programme (SSP)

Launched during the year, the Smart School Programme bundles textbooks, notebooks, DOTTSTAR OTT access, Books & Beyond and Interactive Flat Panels into a single multi-year (2-3 year) institutional partnership. The programme received overwhelming responses from the schools in its initial roll-out phase, positioning it as the Companys most significant multiyear revenue-visibility initiative.

Stationery Division and Pebbles Magazine

The Companys Stationery Division (notebooks) secured 100+ active orders in its launch phase by leveraging the existing sales and distribution network, while Pebbles Magazine, a student engagement and reading-enrichment publication, added a further institutional and household touch point aligned with NEP 2020s holistic-development objectives.

Government and Institutional Supply

During the year, the Company secured its first-ever government tender for supply of books to schools across Maharashtra, and is at an advanced stage of engagement witl several other government departments and institutions — a new, potentially durable growth avenue that leverages the Companys existing manufacturing, content and distribution capabilities.

Outlook

Building on FY26 performance — consolidated revenue of T109.27 crore, continued balance-sheet deleveraging — the Companys outlook for FY27 and beyond is anchored on the following priorities:

- Converting the Smart School Programmes pipeline of various school proposals into contracted, multi-year institutional engagements, building deep revenue visibility and stickiness.

- Scaling DOTTSTARs school base and subscription/SaaS

revenue, deepening content partnerships and introducing Al-driven features such as adaptive learning pathways and academic analytics.

- The Company is continuing to deepen its reach in the existing National locations.

-Continued portfolio expansion beyond 1,000 titles, with targeted growth in CBSE content, competitive-exam- readiness material and NEP-aligned supplementary resources, alongside scale-up of the Stationery Division, Pebbles Magazine and the Government Supply business.

- Progressive integration of Al and technology tools across Books & Beyond and the QR ecosystem, moving from lesson-planning assistance toward personalised, performance-linked content recommendations.

The Company believes these initiatives, executed on its existing asset-light and distribution-led operating model, position it to sustain its multi-year growth trajectory while continuing to strengthen institutional stickiness and revenue quality.

Risks and Concerns

- Competitive intensity: The K-12 publishing industry remains fragmented and price-competitive; failure to continually refresh curriculum-aligned content could erode institutional relationships.

- Working capital and receivables risk: The Companys business is working-capital intensive with an elongated collection cycle typical of school/institutional sales; a slower-than-expected realisation of receivables (which increased to T81.6 crore standalone as at 31st March, 2026 from T66.8 crore a year earlier) could constrain liquidity and require continued reliance on short-term borrowings.

- Execution risk in new verticals: DOTTSTAR, the Smart School Programme, the Stationery Division and Pebbles Magazine are relatively recent initiatives; their ability to convert institutional interest/proposals into profitable, recurring revenue at scale is not assured.

- Subsidiary performance: Dijaa Education Private

Limited (which operates DOTTSTAR) reported a net loss of Rs 49.11 lakh during FY26 as it continues to scale; consolidated profitability remains sensitive to the pace at which the subsidiary achieves operating breakeven.

- Regulatory and policy risk: Changes in State Board curricula, or the pace and design of NEP/NCF implementation could require unplanned content revisions

or affect procurement cycles, including for government/ institutional tenders.

- Concentration risk: A meaningful share of revenue continues to be linked to the Maharashtra State Board and CBSE segments; slower adoption in new geographies could affect the pace of diversification.

- Input cost and outsourcing risk: As an asset-light publisher that outsources printing and binding, the Company is exposed to paper price volatility and vendor- capacity constraints during peak academic-season demand.

- Technology and data risk: As digital and OTT offerings (DOTTSTAR, Books & Beyond, QR content) scale, the Company is increasingly exposed to platform, data-security and content-piracy risks that require ongoing investment in technology infrastructure.

Internal Control Systems and Their Adequacy

The Company has in place adequate internal financial controls

commensurate with the nature and size of the business

activities and are operating effectively with reference to the financial statements. These controls comprehensively policies and procedures designs to ensure the orderly and efficient conduct of the Companys business, including strict adherence to its policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. During the year under review, there were no material or reportable observations indicating internal control failures or causing financial loss.

Discussion on Financial Performance with respect to Operational Performance

The financial results discussed below are drawn from the Companys audited standalone and consolidated financial statements for the year ended 31st March, 2026. All figures are in ? Lakhs unless otherwise stated; minor rounding differences may arise between standalone, consolidated and investor-presentation figures.

Summary of Financial Performance :

Consolidated Performance: During the year under review, your Companys Consolidated Revenue from Operations increased to ?10,927 Lakhs, as against ?10,247 Lakhs in the previous financial year. The Consolidated Profit After Tax (PAT) for the financial year 2025-26 stood at ?1,346 Lakhs compared to ?1,356 Lakhs for the financial year 2024-25.

Standalone Performance: On a standalone basis, the Revenue from Operations for the financial year 2025-26 grew to ?10,836 Lakhs, up from ?10,229 Lakhs in the previous year. The Standalone Profit After Tax (PAT) for the financial year 2025-26 stood at ?1,395 Lakhs, showing an increase against ?1,351 Lakhs recorded for the financial year 2024-25.

Key Financial Ratios

In accordance with Schedule V, Part B, paragraph 9 of the SEBI (LODR) Regulations, 2015, the table below sets out the Companys key financial ratios (computed on a standalone basis from the audited financial statements) for FY26 as compared to FY25, together with explanations for changes of 25% or more.

Three ratios recorded a change of 25% or more during the year, as explained below:

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

The Return on Net Worth (RoNW) decreased from 25.97% in the previous financial year to 16.22% during the current financial year. The decline was primarily attributable to a substantial increase in the Companys net worth on account of retention of profits and strengthening of shareholders funds, whereas the growth in Profit After Tax during the year was comparatively moderate increase in earnings, resulting in a lower Return on Net Worth despite the Company continuing to report healthy profitability.

Material Developments in Human Resources / Industrial Relations

As at 31st March, 2026, the Company had a workforce of 500+ employees, including 275+ sales professionals, supported by a network of 400+ contractual authors and academic experts engaged in curriculum-aligned content development. Industrial relations remained cordial throughout the year, with no material disputes reported.

The Company continued its focus on training and capabilitybuilding, including teacher-orientation programmes tied to Books & Beyond and regular skill-development workshops for its sales force, to keep frontline teams aligned with evolving pedagogical and product requirements. No complaints were received or remained pending under the Companys Policy

on Prevention of Sexual Harassment at the Workplace during the year, and the Company affirms its compliance with the Maternity Benefit Act, 1961. Mr. Saurabh Nanak Shah was appointed as Chief Financial Officer of the Company with effect from 22nd May, 2025.

Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, outlook or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, owing to a number of factors including, but not limited to, changes in government policy and regulation (including NEP/NCF implementation), competitive conditions in the education-publishing and EdTech industries, input cost movements, and general economic and business conditions in India and the markets in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law or the Listing Regulations.