Despite increasing digitalisation and a fragmented pen-making industry in India, writing instruments-maker Linc Ltd is eyeing a compound annual growth rate (CAGR) of 15-20 per cent for five years, said a top company official on Saturday.
The Kolkata-based company manufactures ball and gel pens, markers, sketch pens and crayons and exports them to nearly 50 countries, generating a revenue of ₹100 crore.
The company’s total revenue currently is around ₹550 crore, with core operating profitability EBITDA (earnings before interest, taxes, depreciation and amortisation) at 11 per cent, informed its official.
“We plan to grow at 15 per cent to 20 per cent CAGR for four to five years. The operating profitability is 11 per cent with revenue at ₹550 crore, but there is room to increase the EBITDA,” said Linc Ltd Managing Director, Deepak Jalan, on their future plans in the face of rising preference for digital media over the use of fountain pens, which, Jalan says, “have become insignificant in India”.
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The pen-maker has three joint ventures with companies in Japan, Turkey and Korea, and a majority stake in an entity in Kenya, which serves the African market.
Jalan agrees that the growth of the writing instruments industry in India has stunted over the years, staying in the range for 5-6 per cent now.
"The industry in India is fragmented", he said, adding that while in India, the industry is valued at ₹10,000 crore, globally, the size of the industry is USD 20 billion.
Linc’s capital expenditure of around ₹20 crore per year, said Jalan, is spent towards capacity expansion and modernisation.
They plan to expand from their current two manufacturing units in West Bengal and Gujarat to another unit in Gujarat, where operations will commence from October this year, and one more in West Bengal.
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