Financial Performance Summary

Q2 FY27 Performance (Quarter Ended September 30, 2026)

  • Revenue from operations: ₹340.1 crores, representing 6.5% sequential growth from Q1 FY27
  • Export revenue grew 13% sequentially to ₹49 crores
  • Domestic sales grew 6% sequentially to ₹292 crores from ₹276 crores in Q1 FY27
  • EBITDA: ₹50.6 crores with EBITDA margin of 14.9%
  • Profit After Tax: ₹31.7 crores, representing 9.1% sequential growth
  • PAT margin: 9.3%, showing 20 bps improvement quarter-on-quarter

H1 FY27 Performance (Half Year Ended September 30, 2026)

  • Revenue from operations: ₹659.4 crores, representing 8.2% year-on-year growth
  • Domestic sales: ₹568 crores, up 11% from ₹513 crores in H1 FY26
  • Writing Instruments segment grew 7% during H1 FY27
  • Creative Products segment delivered 24% year-on-year growth

Operational Disruptions and Impact

The company experienced significant manufacturing disruptions during Q2 FY27 due to exceptionally heavy rainfall and flooding in Western India:

  • Valsad facility remained non-operational for approximately 15 days
  • Daman facility remained non-operational for approximately 7 days
  • Temporary workforce shortages further delayed restoration of normal production levels
  • Estimated revenue loss due to disruptions: approximately ₹25 crores
  • Without these disruptions, quarterly revenue growth could have been 7-8% higher than reported
  • Manufacturing activities at both facilities have now returned to normalcy

Business Segment Performance

Writing Instruments

  • Core business foundation with 7% growth in H1 FY27
  • Maintains approximately 18% market share in India
  • Q2 growth of 5% despite disruptions, supported by multiple facilities (Uttarakhand, Mumbai outskirts, Daman)

Creative Products

  • 24% year-on-year growth in H1 FY27
  • Focus on regular new SKU launches and product innovation
  • Capacity expansion planned with new facility in Valsad

Steel Bottles and Houseware

  • Q1 growth of 54% year-on-year
  • Q2 impacted significantly by Valsad facility disruptions (15 days non-operational)
  • Fourth manufacturing line expected to commence commercial operations in Q4 FY27
  • Current capacity utilization: approximately 75%

Financial Metrics and Working Capital

  • Net working capital days increased from 139 days in FY26 to 145 days in H1 FY27
  • Inventory days increased from 94 to 104 days due to advanced stocking to take advantage of lower raw material prices
  • Debtor days increased from 78 to 84 days primarily due to slower collections in export market
  • Target to reduce working capital by 20 days over next 5-6 quarters
  • New ERP system implementation ongoing, with impact expected in 2-3 quarters

Strategic Initiatives and Guidance

Revised Growth Guidance

  • Full-year FY27 revenue growth guidance revised to 12% from previous 15%
  • Medium-term guidance maintained at approximately 15% year-on-year revenue growth from FY28 onwards
  • H2 FY27 expected to be stronger seasonally, with normalization of operations

Capacity Expansion

  • New Creative products manufacturing facility in Surat and upcoming Valsad facility
  • Fourth stainless steel bottle manufacturing line expected commercial production by Q4 FY27

Acquisition Strategy

  • Exploring potential acquisitions in the Creative segment
  • Looking for manufacturing expertise and strong manufacturing base partners
  • Focus on category expansion or new category entry
  • Brand to remain with Flair Writing Industries Limited

Dividend Declaration

  • Board approved interim dividend of 10%, amounting to ₹0.50 per share
  • Part of distribution strategy for shareholders

Market and Operational Challenges

Raw Material Cost Pressures

  • Elevated raw material costs due to geopolitical situation in West Asia
  • Supply side disruptions and price volatility impacting margins
  • Mitigation through cost rationalization, operational efficiencies, targeted promotional schemes, and selective price increases
  • Margin maintenance strategy focused at current 15% EBITDA level

Export Market Challenges

  • Geopolitical uncertainties impacting international trade flows, logistics, and freight costs
  • Middle East operations particularly affected
  • Exploring newer opportunities in South America, Africa, and other Asian countries
  • Focus on reducing geographical concentration

Portfolio Balance

  • Current portfolio mix: 70% Writing Instruments, 30% Creative and Steel Bottles/Houseware
  • Target mix: 60% Writing Instruments, 40% non-pen categories
  • Expected year-end mix: 68% Pens, 32% other categories

Corporate Governance

  • Appointment of PricewaterhouseCoopers as statutory auditor, approved at recent AGM
  • Enhanced governance standards, transparency, and institutional processes

Forward-Looking Statements

Management expressed confidence in long-term prospects despite near-term challenges. Focus remains on strengthening core businesses, expanding portfolio, and delivering sustainable growth. The second half of FY27 is historically stronger, and with normalized operations, the company expects improved performance.