S. Chand’s three generations of success

S. Chand Group has developed 7,000 products in the last 70 years, a solid distribution network of 27 branches and more than 4,000 distributors. Three generations of S. Chand Group have been empowering students with the promise of affordable books to read with more than 7,000 products. Himanshu Gupta, the current joint managing director (JMD) of the group, is the third generation of the family.
Under the leadership of Himanshu Gupta, S. Chand Group has moved from being a traditional publisher to a publishing company reaching every nook and corner of the country and even the international frontiers.
About three generations back, S. Chand started its publishing business in 1937. At that time in India, only books from British publishers were popular. It is quite obvious that task was difficult. In order to take part in the market competition, S. Chand started to publish parallel textbooks written by Indian authors.

Under the leadership of Himanshu Gupta, S. Chand Group has moved from being a traditional publisher to a publishing company reaching every nook and corner of the country and even the international frontiers. “We evolve into the market as one of the biggest domestic publishers and exporters of textbooks. Our publications include all types of educational books, such as higher education, technical and management educations, school books (accounting for 60 percent of our revenues),” said Himanshu.

The education market in India is roughly pegged at $20 billion, growing at over 30 percent. The industry’s attractiveness is obvious and among all its segments, the publishing space has the lowest entry barrier. The reason is that it is the least infrastructure-intensive. But the educational publishing market, worth about $2 billion while promising, is very fragmented. There are more than 8,000 publishers in India but not more than 20 of them have a turnover of Rs 100 crore plus. It is a high margin, high growth, direct-to-consumer business. Also, it is dominated by MNCs like Oxford University Press India, Pearson Education, McGraw-Hill, etc. “But in the domestic category, we are the second largest player by revenue after Navneet Publications. We have grown from Rs 100 crore in 2005-06 to Rs 310 crore in 2012-13. Our target is to become the largest player in the Asian publishing market over the next five years,” remarked Himanshu.

S. Chand is the first company in the Indian publishing industry to be funded by a private equity firm. What stood out for Everstone Capital, which took a 31 percent stake in 2012-13, was its entrepreneurial leadership. Himanshu Gupta always shows his ambitiousness, aggressiveness and commitment not to just for growth but to growth with profitability. S. Chand is the industry leader in operating margins.

The committed team of S. Chand has had experience in acquiring companies—in growth by aggregating. This is a crucial aspect of strategy for anyone who wants to grow in the Indian market. Thanks to Everstone’s funding, S. Chand last year bought out Vikas Publishing House Pvt Ltd along with its imprint Madhuban and it was the largest acquisition ever made in the Indian publishing industry which costs around $25 million.

Apart from S. Chand’s high growth since 2005-06, this group is respected for being professionally-managed despite being family-owned where CEO, CFO, head of distribution, etc are qualified professionals. This group is the sector’s fastest-growing company and likely to be the largest player in the (domestic) category shortly.

Himanshu mentioned, “Our focus on acquiring industry majors is a reasonable strategy as it takes a longer time (10 to 15 years) to build content and establish a dependable brand. But there is a flip side, not every company can be absorbed easily. Also, it is crucial to assess that it truly adds value to the existing portfolio,”

The other potential challenge in the long-term is the advent of digital media in education and what makes S. Chand a safe bet is that it has already made its presence at the threshold of digital education. The group’s product Destination Success is being rolled out in schools. The publishing business accounts for 95 percent of S. Chand’s revenues and digital five percent. But the good news is that even in advanced overseas markets, digital education accounts for twenty percent of the market. And S. Chand has already started its journey into the digital space.