LINC LIMITED – Investor Presentation Summary

Key Operational Highlights

  • Operating income stood at ₹15,412 lakhs in Q2 FY27, representing 10.8% YoY growth and 10.9% QoQ growth
  • Writing instruments segment showed mixed performance: Premium own brands grew 14.8% YoY to ₹7,841 lakhs, while Mass own brands declined 24.5% YoY to ₹1,678 lakhs
  • Licensed brands in writing instruments grew 7.2% YoY to ₹2,452 lakhs
  • Other products showed divergent trends: Own brands declined 19.7% YoY to ₹408 lakhs, while Licensed brands grew 30.5% YoY to ₹704 lakhs
  • Key drivers included focused sales promotion initiatives and healthy growth in categories beyond writing instruments

Segment-wise Performance

Writing Instruments Segment (Q2 FY27):

  • Premium Own Brands: ₹7,841 lakhs (59.9% of total sales), 14.8% YoY growth
  • Mass Own Brands: ₹1,678 lakhs (12.8% of total sales), (24.5%) YoY decline
  • Licensed Brands: ₹2,452 lakhs (18.7% of total sales), 7.2% YoY growth

Other Products Segment (Q2 FY27):

  • Own Brands: ₹408 lakhs (3.1% of total sales), (19.7%) YoY decline
  • Licensed Brands: ₹704 lakhs (5.4% of total sales), 30.5% YoY growth

H1 FY27 Performance:

  • Premium Own Brands: ₹15,748 lakhs (61.5% of total sales), 8.2% YoY growth
  • Mass Own Brands: ₹2,879 lakhs (11.2% of total sales), (26.3%) YoY decline
  • Licensed Brands (Writing Instruments): ₹4,857 lakhs (19.0% of total sales), 12.3% YoY growth
  • Own Brands (Other Products): ₹961 lakhs (3.8% of total sales), 11.5% YoY growth
  • Licensed Brands (Other Products): ₹1,150 lakhs (4.5% of total sales), 9.4% YoY growth

Financial Highlights

Q2 FY27 Financials:

  • Revenue: ₹15,412 lakhs
  • EBITDA: ₹1,131 lakhs
  • PAT: ₹419 lakhs (attributable to owners of the Parent)
  • EPS: ₹0.70
  • EBITDA Margin: 7.3%
  • PAT Margin: 2.7%

YoY Comparison (Q2 FY27 vs Q2 FY26):

  • Revenue growth: 10.8%
  • EBITDA decline: (27.8%)
  • PAT decline: (50.5%)
  • Margin contraction: EBITDA margin down 393 bps from 11.3% to 7.3%

QoQ Comparison (Q2 FY27 vs Q1 FY27):

  • Revenue growth: 10.9%
  • EBITDA decline: (6.4%)
  • PAT decline: (27.9%)
  • Margin contraction: EBITDA margin down 136 bps from 8.7% to 7.3%

H1 FY27 Performance:

  • Operating Income: ₹29,307 lakhs (6.2% YoY growth)
  • Operating EBITDA: ₹2,341 lakhs ((18.8%) YoY decline)
  • PAT: ₹999 lakhs ((35.6%) YoY decline)
  • EBITDA Margin: 8.0% (down 245 bps from 10.4%)
  • PAT Margin: 3.4% (down 216 bps from 5.5%)

Drivers of Financial Performance:

  • 190 basis points of margin contraction attributable to higher raw material costs
  • 200 basis points of margin contraction attributable to increased sales expenditure
  • Geopolitical uncertainties drove price increases across certain inputs
  • Increased sales promotion activities to stimulate demand

Geographical Revenue Split

Not Specified

Balance Sheet Snapshot

As of 30-SEP-26:

  • Net Worth: ₹26,799 lakhs
  • Gross Debt: ₹2,367 lakhs
  • Cash & Cash Equivalents: ₹130 lakhs
  • Net Debt: ₹2,237 lakhs
  • Net Fixed Assets: ₹17,306 lakhs
  • Investment in JV: ₹928 lakhs
  • Net Current Assets: ₹9,310 lakhs (excludes cash & cash equivalents)
  • Total Assets: ₹41,767 lakhs
  • Fixed Asset Turnover: 3.74 (YTD annualized)
  • Total Asset Turnover: 1.51 (YTD annualized)
  • Cash Conversion Cycle: 70 days

Financial Health Insights:

  • Net Debt/Equity: 0.08 (calculated)
  • Strong balance sheet with consistent growth

Capex & Cash Flow Health

Not Specified

Strategic & R&D Initiatives

  • Expanding presence in lifestyle drinkware through Tritonic brand of Tritan-based bottles
  • Stackoo experience centres in Kolkata and Mumbai to strengthen direct consumer connect
  • New store opened in Sky City Mall, Borivali in August 2026
  • Focus on premiumization with Pentonic brand introduced in FY19
  • Diversifying into adjacent categories including markers, calculators, and other stationery products
  • Strategic joint ventures and capacity expansions

Recent Launches:

  • Pentonic Ball Pen Printed Foils

Marketing Activities:

  • Spent over ₹5,000 lakhs on brands over last 5 years
  • Recent campaign: "13,000 PENS. ONE GODDESS." during Durga Puja
  • Participation in Paperworld Delhi expo

Industry Trends & Business Environment

Global Stationery Industry Outlook:

  • Stationery and Supplies market expected to grow from USD 152.43 billion in 2025 to USD 160.22 billion in 2026, reaching USD 205.64 billion by 2031 at 5.11% CAGR
  • Educational institutions led with 45.68% revenue in 2025
  • Asia-Pacific held 35.30% market share in 2025 with fastest 6.02% CAGR to 2031
  • Global Ball Point Pens market valued at USD 12.9 billion in 2025, projected to reach USD 21.5 billion by 2035 at 5.2% CAGR
  • Global Luxury Pens Market valued at USD 2.8 billion in 2025, projected to reach USD 4.3 billion by 2034 at 6.0% CAGR
  • Global writing instruments market valued at USD 25.3 billion in 2025, projected to reach USD 33.6 billion by 2032 at 4.1% CAGR

Indian Market Drivers:

  • India's ~371 million youth (~27% of population) and ~68% working age population
  • India's school system serves 24.7 crore students across 14.7 lakh schools
  • Literacy rate risen from 74% in 2011 to 80.9% in 2023-24
  • Delhi Cabinet approved ₹900+ crore to expand smart classrooms in government schools
  • NEP 2020 aims to achieve 100% GER by 2030
  • Union Budget 2025-26 allocated ₹1,28,650 crore to Ministry of Education (6.5% increase)
  • Indian stationery and art materials market growing at 13% CAGR, set to reach ₹72,000 crores by FY28

Management Commentary & Growth Outlook

Strategic Outlook:

  • Priority is to sustain sales growth while improving balance between growth investments and profitability
  • Continue to monitor raw material costs and evaluate promotional spending
  • Build on encouraging performance of categories beyond writing instruments
  • New product launches and strategic partnerships remain central to long-term strengthening

Growth Outlook:

  • Focus on gaining market share and building sustained sales momentum
  • Long-term aspiration to tap into full ₹38,500 crore Indian stationery market
  • Aim to broaden Total Addressable Market

Risks and Opportunities:

  • Raw material cost pressures due to geopolitical uncertainties
  • Need to balance promotional spending with profitability
  • Opportunity in expanding lifestyle drinkware and adjacent categories

ESG Updates

  • Pentonic's individual plastic wrapper packaging substituted with paper box packaging of 10/20pcs
  • Pentonic 75 made from 75% recycled plastic
  • ~1,000 female employees with focus on diversity
  • Employs specially-abled workforce with training programs
  • Long-standing partner of "Friends of Tribal Society" for education support
  • Committed to transparency, empowerment, accountability, independent monitoring and environmental consciousness

Corporate Governance

  • Strong commitment to corporate governance practices
  • Board includes experienced directors with diverse backgrounds
  • Leadership team with extensive industry experience