SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549


                                    FORM 10Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

FOR QUARTER ENDED MARCH 31, 1997                      COMMISSION FILE NO. 0-3415

                       STV GROUP, INCORPORATED
(Exact name of registrant as specified in its charter)


     Pennsylvania                                         23-1698231
(State or other jurisdiction of                 (I.R.S. Employer Identification)
 incorporation or organization)


205 West Welsh Drive, Douglassville, Pennsylvania            19518
(Address of principal executive offices)                   (Zip Code)


                                 (610) 385-8200
(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(g) of the Act:


                          Common Stock $1.00 par value
                                (Title of class)


As of March 31,  1997,  there  were  1,821,246  shares  of  common  stock of the
registrant outstanding.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                           YES  X            NO


<PAGE>



                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements

                        STV GROUP, INC., AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                            March 31, 1997     September 30, 1996
<S>                                                      <C>                  <C> 

ASSETS
Current Assets
  Cash                                                          $455,000             $28,000
  Accounts Receivable                                         18,270,000          20,504,000
  Costs and Estimated Profits of Uncompleted
   Contracts in Excess of Related Billings                    14,939,000          14,290,000
  Deferred tax benefit                                           180,000             180,000
  Other Current Assets                                         2,297,000           1,577,000
                                                               ---------           ---------

  Total Current Assets                                        36,141,000          36,579,000

Property and Equipment                                        11,543,000          12,301,000

  Less Accumulated Depreciation                               10,171,000          10,987,000
                                                              ----------          ----------

    Net Property and Equipment                                 1,372,000           1,314,000

Deferred Tax Benefit                                           1,369,000           1,369,000

Other Assets                                                     943,000             733,000
                                                                 -------             -------

      TOTAL                                                  $39,825,000         $39,995,000
                                                             ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Notes and Accounts Payable                               $15,784,000         $16,051,000
    Accrued Wages and Expenses                                 7,415,000           7,489,000
    Billings on Uncompleted Contracts in Excess of
      Related Costs                                            4,145,000           4,318,000
                                                               ---------           ---------

      Total Current Liabilities                               27,344,000          27,858,000

  Long-Term Debt                                               1,798,000           1,795,000

  Stockholders' Equity
    Preferred Stock                                                    0                   0
    Common Stock                                               1,921,000           1,921,000
    Capital Surplus                                            3,003,000           3,003,000
    Retained Earnings                                          6,155,000           5,814,000
                                                               ---------           ---------

      Total                                                   11,079,000          10,738,000
        Less:  Treasury Stock                                    271,000             271,000
                  Loans Receivable from Officers                 125,000             125,000
                                                                 -------             -------

      Total Stockholders' Equity                              10,683,000          10,342,000

      TOTAL                                                  $39,825,000         $39,995,000
                                                             ===========         ===========

</TABLE>


<PAGE>


                        STV GROUP, INC., AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                                 SIX MONTHS ENDED
                                                                     March 31
                                                               1997            1996

<S>                                                    <C>               <C>    

Operating Activities
  Net Income                                                 $341,000        $174,000
  Adjustments to reconcile net income to
    net cash provided by operating activities
      Depreciation and Amortization                           452,000         549,000
      Other                                                         0        (151,000)
  Changes in Operating assets and liabilities
      Accounts Receivable                                   2,234,000         853,000
      Costs of uncompleted contracts in
        excess of billings and prepaid expenses            (1,369,000)        (11,000)
      Accounts Payable and accrued expenses                  (513,000)      1,578,000
      Billing in excess of related costs                     (173,000)        260,000
      Current Income Taxes                                   (274,000)        302,000
                                                             --------         -------
Net Cash provided by operating activities                    $698,000      $3,554,000

Investing Activities
  Purchase of Property and Equipment                         (468,000)        (62,000)
  Purchase of Software                                        (23,000)         (1,000)
  Decrease (Increase) in other assets                        (230,000)          2,000
                                                             --------           -----
    Net Cash provided (used) by investing activities        ($721,000)       ($61,000)

Financing Activities
  Proceeds from line of credit and long term
    borrowings                                             46,760,000      40,350,000
  Principal payments on line of credit and long
    term borrowings                                       (46,310,000)    (43,495,000)
                                                          -----------     ----------- 
    Net Cash (used) provided by financing
      activities                                             $450,000     ($3,145,000)

  Increase (decrease) in cash and equivalents                 427,000         348,000
  Cash and equivalents at beginning of year                    28,000         668,000
                                                               ------         -------
    Cash and equivalents at end of period                    $455,000      $1,016,000
                                                             ========      ==========

</TABLE>


<PAGE>


                        STV GROUP, INC., AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                         THREE MONTHS ENDED        SIX MONTHS ENDED
                                                              March 31                  March 31
                                                         1997         1996         1997         1996

<S>                                              <C>          <C>           <C>          <C>   

Revenue

  Total Revenue                                      $22,311,000  $23,502,000  $45,047,000  $46,485,000
    Less Subcontract and Procurement Costs             4,130,000    5,714,000    8,743,000   10,693,000
                                                       ---------    ---------    ---------   ----------

  Operating Revenue                                  $18,181,000  $17,788,000  $36,304,000  $35,792,000

Costs and Expenses

  Costs of Services and Sales                         16,089,000   16,007,000   32,294,000   32,128,000
  General and Administrative                           1,350,000    1,225,000    2,599,000    2,430,000
  Interest in Joint Venture                                    0      (22,000)           0      (26,000)
  Interest                                               358,000      383,000      685,000      811,000
                                                         -------      -------      -------      -------

Total Costs and Expenses                              17,797,000   17,593,000   35,578,000   35,343,000

Income Before Income Taxes                               384,000      195,000      726,000      449,000

Income Taxes                                             201,000      124,000      385,000      275,000
                                                         -------      -------      -------      -------

Net Income                                              $183,000      $71,000     $341,000     $174,000
                                                        ========      =======     ========     ========

Earnings per share:                                        $0.10        $0.04        $0.18        $0.10

Weighted Average Common Shares and
  Equivalents                                          1,902,851    1,868,225    1,900,778    1,859,910


</TABLE>





<PAGE>



               Notes to Consolidated Condensed Financial Statement


                                 March 31, 1997

1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance  with the  instruction  to Form 10-Q and therefore do not
include all  information  and  footnotes  necessary for a fair  presentation  of
financial  position,  results of operations,  and cash flows in conformity  with
generally accepted accounting principles.

It should be understood  that the foregoing  interim results are not necessarily
indicative  of the  results  of  operations  for the  full  fiscal  year  ending
September  30, 1997 due in part to  increased  reliance on  estimates at interim
dates.



<PAGE>


Item 2.  Management Discussion and Analysis of the Results of Operation

Total  revenues for the quarter  ended March 31, 1997 (second  quarter of fiscal
1997)  decreased  5.1% as  compared  to the second  quarter  of fiscal  1996 and
decreased 1.9% as compared to the previous  quarter.  Operating  revenues (total
revenues  excluding  pass through  costs) for the second  quarter of fiscal 1997
increased  2.2% as compared to the second  quarter of fiscal 1996 and  increased
 .3% as compared to the previous  quarter.  The  increase in  operating  revenues
reflects an increase in the demand for transportation engineering.

Pass through costs,  expressed as a percentage of total  revenues,  decreased to
18.5%  compared  to 24.3% in the second  quarter of fiscal 1996 and 20.3% in the
previous  quarter.  Pass  through  costs  will  vary  depending  on the need for
specialty subconsultants and governmental subcontract requirements.

Costs of services, expressed as a percentage of operating revenues, decreased to
88.6% for the second quarter of fiscal 1997 from 90.0% for the second quarter of
fiscal 1996 and 89.5% for the first quarter of fiscal 1997. The decreases in the
percentage  for both quarters is primarily  due to a decrease in  non-productive
labor and labor related costs.

General and  administrative  expense,  expressed  as a  percentage  of operating
revenue, increased to 7.4% in the second quarter of fiscal 1997 from 6.9% in the
second quarter of fiscal 1996 and the previous  quarter.  The increase is caused
by higher travel and salary related expenses.

Interest, expressed as a percentage of operating revenues, decreased slightly to
2.0% in the second quarter of fiscal 1997 compared to 2.2% in the second quarter
of fiscal 1996 but increased from the 1.8% incurred in the previous quarter. The
increase from the previous quarter was due to a higher average loan balance.

Income tax  expense  for the second  quarter of fiscal 1997 was 52.3% of pre-tax
income  compared to 63.6% of pre-tax  income for the same period last year.  The
decrease is due to lower  non-deductible  expenses as a  percentage  of a higher
second quarter pre-tax income.

Earnings per common share,  calculated using the Treasury Stock Method,  for the
second  quarter  of  fiscal  1997  were  10  cents  based  on  1,902,851  shares
outstanding compared to 4 cents in fiscal 1996 on 1,868,225 shares outstanding.


<PAGE>


During the second quarter, certain assets of the International Region were sold.
However,  this had an  immaterial  financial  effect  on the  operations  of the
Company. The Company continues to have an active international  presence through
its subsidiary, STV International.

Financial Condition
Working capital decreased to $8,797,000 from $8,800,000 in the previous quarter.
Capital  resources  available to the Company included an existing line of credit
for working  capital.  The current  limit is a maximum of $16.5 million based on
accounts receivable and  work-in-progress of which approximately $4.6 million is
currently  available.  The Company is in  discussions  with its lender which may
reduce its line of credit.  The  Company  believes  that it and the lender  will
maintain a line of credit  adequate  to meet the  current  and future  financial
needs of the  Company.  The  Company is  planning  to  continue  its  program of
purchasing  computer-assisted  design and  drafting  equipment  as well as a new
project management and accounting system.

The Company's backlog is approximately $115 million.


<PAGE>


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.







STV GROUP, INCORPORATED
         (Registrant)




  May 8, 1997                             By:  /s/ Michael Haratunian
---------------                                ----------------------
       Date                                    Michael Haratunian
                                               Chairman, Chief Executive Officer






  May 8, 1997                             By:  /s/ Peter W. Knipe
---------------                                ----------------------
     Date                                      Peter W. Knipe
                                               Secretary/Treasurer