Linc Pens bats polymer with ‘Pentonic’ this Q2
Hyderabad: Linc Pen and Plastics Ltd. announced its unaudited standalone financial results for the quarter ended 30th September 2018. Linc Pens has been one of India’s most trusted writing instruments brand for the last four decades. With a strong presence over 50 countries, the company has been at the forefront of creating products which have been recognised nationally as well as internationally. Linc is known for its innovation and customer-demand driven product offerings. The company declared net profit stood at Rs. 172 lakhs as against Rs. 162 lakhs in the year ago. However, the EBITDA margin stood at 7.4% from 8.9% last year, primarily due to the steep increase in the polymer prices in the current quarter.
The newly launched ‘Pentonic’ ball pen has been instrumental to a large extent in beating the blues of the steep increase in polymer prices owing to the surge in crude oil prices in the September quarter.
Key Financial Figures
• Net profit stood at Rs. 172 lakhs as against Rs. 162 lakhs in the year ago period
• The total revenue of the company in the September 2018 quarter was Rs. 9,123 lakhs as against Rs. 7,867 lakhs in the year ago period, an increase of 16%.
Speaking on the Industry trend, Mr. Deepak Jalan, Managing Director of Linc Pen and Plastics Ltd., stated, “Our quarterly consumption of polymers is about 1500 MT versus the average polymer price increase was to the tune of about Rs. 30,000 per MT when compared with the same period last year, which has severally impacted the gross margins of the company as well as the industry overall.
Since last couple of quarters, the writing instruments industry has been sharply hit by the unprecedented increase in the polymer prices, which is its key raw-material. More particularly, the quarter under review was the most hit with about 28% increase in various polymers prices on average he added.”
He further explained the difficulty in passing on the entire cost increase to the trade market and informed that Linc, for quite some time, have been trying to develop products which would help the company insulate its margins from the polymer price volatility and secure the future top line as well as bottom line of the company and he was glad to inform that they were able to see a positive sign in this direction. The initial feedback of recently launched ‘Pentonic’ ball pen has been very encouraging and a few more products are under development, which should help Linc achieve the objective of sustained performance despite price volatility of raw-materials.
The contribution of value-added products increased to 25% in terms of volume and to 40% in terms of value as against 18% & 32% respectively, in the last financial year in the domestic channel. Going forward, Linc hopes to post more consistent results, in view of improved product mix, cost reduction initiatives, higher exports & favourable foreign exchange, despite the challenges of increase in the input costs.
Linc has always believed in engaging in best industry practises and showcasing our strengths as a dominant player in the market.