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About -
Linc was established in 1976 by Mr. Surajmal Jalan & is now headed by Mr. Deepak Jalan, Managing Director.
Co is engaged in the manufacturing of Writing instruments & other stationery items.
Linc was established in 1976 by Mr. Surajmal Jalan & is now headed by Mr. Deepak Jalan, Managing Director.
Co is engaged in the manufacturing of Writing instruments & other stationery items.
Linc is one of India’s one of the leading & most trusted writing instrument manufacturers with a national & international presence in 50+ countries.
Today, Linc accounts for a near 8% market share in the writing instruments
segment.
Today, Linc accounts for a near 8% market share in the writing instruments
segment.
Location Wise Revenue Breakup-
Linc has been earning
31.9% (East India)
24.1% (Rest of the world)
23.5% (North India)
10.6% (West India)
9.9% (South India)
Linc has been earning
31.9% (East India)
24.1% (Rest of the world)
23.5% (North India)
10.6% (West India)
9.9% (South India)
Manufacturing Facilities -
Linc’s state of the art integrated
manufacturing facilities are located in Umbergaon (Gujarat)
Falta SEZ (West Bengal)
Serakole (West Bengal)
Linc’s state of the art integrated
manufacturing facilities are located in Umbergaon (Gujarat)
Falta SEZ (West Bengal)
Serakole (West Bengal)
Capacity Expansion -
To support the growing appetite for Linc products, Linc intends to double the capacity of its Umbergaon (Gujarat) facility, which should increase the co’s total mfg capacity by a quarter.
To support the growing appetite for Linc products, Linc intends to double the capacity of its Umbergaon (Gujarat) facility, which should increase the co’s total mfg capacity by a quarter.
Product Wise Revenue Breakup -
Linc earns 83.3% of it's revenue form Pens, 13.4% from Other Stationary Items & 3.3% from Refills.
Linc earns 83.3% of it's revenue form Pens, 13.4% from Other Stationary Items & 3.3% from Refills.
Financial Summary -
Q4 FY23 (YoY)
Revenue at Rs. 138Cr Vs 112Cr ⬆️24%
EBITDA at Rs. 19.6 Cr Vs 5Cr ⬆️170%
PAT at Rs. 12.3Cr Vs 3Cr ⬆️312%
EPS at Rs. 8.3 Vs Rs. 2 ⬆️312%
Q4 FY23 (YoY)
Revenue at Rs. 138Cr Vs 112Cr ⬆️24%
EBITDA at Rs. 19.6 Cr Vs 5Cr ⬆️170%
PAT at Rs. 12.3Cr Vs 3Cr ⬆️312%
EPS at Rs. 8.3 Vs Rs. 2 ⬆️312%
Distribution Network -
Linc’s distribution network comprises 44 channel partners, 2,650+ distributors and a sales force of 336 professionals servicing 2,18,000+ retailers.
Linc’s distribution network comprises 44 channel partners, 2,650+ distributors and a sales force of 336 professionals servicing 2,18,000+ retailers.
Linc has also been dealing with Japan's "Mitsubishi Pencil Co Ltd" for over 20 years as an exclusive distributor of Uniball & its variants in India.
Also entered into an exclusive tie-up with "Deli" Asia’s largest stationery giant for widening their product portfolio.
Also entered into an exclusive tie-up with "Deli" Asia’s largest stationery giant for widening their product portfolio.
Linc 2.0 Strategy -
▪️Increasing touch points:
• Started expending aggregately to neighbourhood grocery stores (Kirana, Medical stores, Pan stores, etc.) since FY20 to increase footprint.
• Added over 1,76,424 touch points since FY’20; 22,953 over the last 12 months.
▪️Increasing touch points:
• Started expending aggregately to neighbourhood grocery stores (Kirana, Medical stores, Pan stores, etc.) since FY20 to increase footprint.
• Added over 1,76,424 touch points since FY’20; 22,953 over the last 12 months.
▪️Focus on brand building:
• Spent over ₹ 4,100 lacs on brands over last 5 years.
• Step up brand spend going forward 3% of revenue.
• Spent over ₹ 4,100 lacs on brands over last 5 years.
• Step up brand spend going forward 3% of revenue.
▪️Focus on higher margin products:
• 'Pentonic' brand introduced in FY19 as a minimalistic yet contemporary pen, known for its aesthetics as well as writing smoothness.
• Positioned at ₹10 +segment, Pentonic's GPM is 42%.
• Significant increase in Rev share of 'Pentonic'
• 'Pentonic' brand introduced in FY19 as a minimalistic yet contemporary pen, known for its aesthetics as well as writing smoothness.
• Positioned at ₹10 +segment, Pentonic's GPM is 42%.
• Significant increase in Rev share of 'Pentonic'
Growth Drivers -
• Urbanisation:
The country’s urban regions are witnessing a population shift from the rural areas. This shift in population will
be complemented by an increase in demand for education and in turn,
for stationery & writing instruments.
• Urbanisation:
The country’s urban regions are witnessing a population shift from the rural areas. This shift in population will
be complemented by an increase in demand for education and in turn,
for stationery & writing instruments.
• Demographic dividend:
The median age of India is 28.9 years as against 30 years of global average.
A younger population will have a higher preference for education, a boost for the writing instruments sector.
The median age of India is 28.9 years as against 30 years of global average.
A younger population will have a higher preference for education, a boost for the writing instruments sector.
• Rising literacy:
Govt initiatives such as Sarva Shiksha Abhiyaan & mid-day meal programmes has strengthened India’s literacy from 65% in 2001 to 78% in 2021.
The objective of attaining 100% literacy levels by 2025 could have a positive
impact on writing instruments sector.
Govt initiatives such as Sarva Shiksha Abhiyaan & mid-day meal programmes has strengthened India’s literacy from 65% in 2001 to 78% in 2021.
The objective of attaining 100% literacy levels by 2025 could have a positive
impact on writing instruments sector.
Acquisition -
Linc has entered into an agreement in relation to an Investment in Gelx Industries.
The acquisition will provide opportunity for Growth to Linc in Africa.
Consequent to acquisition of 60% of shareholding of Gelx.
Linc has entered into an agreement in relation to an Investment in Gelx Industries.
The acquisition will provide opportunity for Growth to Linc in Africa.
Consequent to acquisition of 60% of shareholding of Gelx.
Risks -
• Exposure to intense competition:
The company faces intense competition in its mainstay category (pens priced up to Rs 10 per piece) from the unorganized sector. The competition constrains pricing power, depressing profitability.
• Exposure to intense competition:
The company faces intense competition in its mainstay category (pens priced up to Rs 10 per piece) from the unorganized sector. The competition constrains pricing power, depressing profitability.
• Volatility in raw material prices:
As cost of the key raw material, plastic granules, accounts for over 65% of cost of production, profitability will remain susceptible to fluctuations in the prices of raw materials.
As cost of the key raw material, plastic granules, accounts for over 65% of cost of production, profitability will remain susceptible to fluctuations in the prices of raw materials.
Fundamentals -
Market Cap : ₹ 990 Cr
P/E (Stock): 26.5
P/E (Industry): 28
P/B : 5.59
Debt to equity : 0.01
ROE : 23.4 %
ROCE : 31.3 %
EV/EBITDA : 15
Market Cap : ₹ 990 Cr
P/E (Stock): 26.5
P/E (Industry): 28
P/B : 5.59
Debt to equity : 0.01
ROE : 23.4 %
ROCE : 31.3 %
EV/EBITDA : 15
Conclusion -
Education sector experiencing strong tail winds in India; hence demand for Linc’s products will continue to grow.
We feel, Linc will continue to benefit from its established market position, supported by its strong brand equity.
Education sector experiencing strong tail winds in India; hence demand for Linc’s products will continue to grow.
We feel, Linc will continue to benefit from its established market position, supported by its strong brand equity.
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