Company Overview
• Date of Call: June 1, 2024
• Key Executives: Managing Director Vimalchand Rathod
• Position: Leading pen brand and largest exporter in India
Financial Highlights
• Total Revenue: INR 979 crores for FY'24
• Pen Segment: INR 795 crores
• Creative Segment: 28% growth to INR 145 crores (boosted by Disney licensing)
• Fourth Quarter Revenue: INR 250.1 crores (11.2% increase QoQ)
• Gross Profit: INR 124.9 crores (5.2% YoY increase, 49.9% margin)
• Profit After Tax: INR 34.2 crores (3.4% YoY increase, 13.7% margin)
Growth Plans
• New Product Launches: Introduction of new pen models and expansion of manufacturing capacity by 10% in Gujarat.
• Distribution Network: Plans to enhance distribution and product offerings.
• Creative Segment Growth: Projected to reach INR 300 crores by FY'27.
Financial Performance
• Full FY'24 Revenue: INR 978.7 crores (3.8% YoY increase)
• Debt Management: Reduced debt-to-equity ratio from 0.28 to 0.08; net debt negative after repaying INR 72.5 crores.
• EBITDA: INR 191.2 crores (4.2% YoY growth)
Future Outlook
• OEM Business: Confidence in double-digit growth for FY'25 despite a decline in FY'24.
• Product Mix: 48% premium/mid-premium sales; focus on maintaining this ratio while introducing lower-priced products.
• Gross Profit Margins: Expected to improve due to premiumization and cost management.
Strategic Initiatives
• Tip Manufacturing Setup: To enhance quality and reduce costs, improving gross profit margins by 3-4%.
• Inventory Management: Anticipated normalization of working capital and inventory days in FY'25.
• Partnerships: Collaboration with Disney contributing to sales growth.
Market Challenges
• Average Selling Price (ASP): Concerns about modest increases not aligning with inflation; high product acceptance in the pen segment.
• Mass Volume Impact: 52% mass volume affecting ASP realization.
Conclusion
• Management Confidence: Optimistic about growth trajectories across segments through product innovation and enhanced distribution strategies.

Date and Context
• Date of Call: February 12, 2024
• Transcript Release: February 19, 2024
• Focus: Unaudited financial results for Q3 and nine months ending December 31, 2023
Key Executives
• Managing Director: Vimalchand Rathod
• CFO: Mayur Gala
Financial Performance
• Q3 Revenue: Rs. 224.9 crores (3% decline YoY)
• Gross Profit: Slight increase due to improved margins
• EBITDA: Fell by 34.9% to Rs. 34.5 crores
• Nine-Month Revenue Growth: 6.8%
• Profit After Tax: Increased by 0.4%
Product and Market Insights
• New Products: 30 introduced; expanded distribution with 11 super stockists
• Domestic Brand Growth: 16% over nine months
• Specific Growth Rates:
• Flair: 9%
• Creative: 8%
• Hauser: 32%
• OEM Segment Challenges: Expected improvement in 2024
Future Outlook
• Q4 Expectations: Historically stronger than Q3; optimism for growth from new products
• Debt Repayment: Rs. 87 crores
• CAPEX Guidance: Unchanged until FY25
• Gross Margins:
• Writing instruments and Creative products: 50%
• Steel bottles: 30-35% once operational
Market Dynamics and Strategies
• Focus on Domestic Market: 80:20 ratio of domestic to export sales
• Revenue Composition: 49% premium/mid-premium, 51% mass products
• Export Challenges: Acknowledged due to global crises, particularly the Red Sea crisis
Q&A Highlights
• Concerns Raised:
• Lower-than-expected growth in Creative segment
• Feasibility of achieving double-digit growth
• Optimism Expressed:
• Anticipated growth in steel bottle division
• Potential return of exports to historical levels once shipping stabilizes
Conclusion
• Overall Sentiment: Optimistic about future growth, particularly with new product launches and enhanced brand traction in the domestic market.

Call Details
• Date: December 21, 2023
• Submitted Transcript: December 28, 2023
• Moderated by: Irfan Raeen, Orient Capital
• Key Executives Present: Managing Director Vimalchand Rathod, CFO Mayur Gala
• Disclaimer: Forward-looking statements subject to risks and uncertainties
Company Overview
• IPO Reception: Subscribed 49 times
• Market Position: Top three in Indian writing instruments, largest pen manufacturer
• Brand Portfolio: Includes Flair, Hauser, and new Zoox brand
• Product Expansion: Non-writing products like steel bottles and houseware
Manufacturing and Distribution
• Manufacturing Plants: 11 across India, capacity over 2 billion pens
• Distribution Network: Largest in the industry, over 315,000 retailers, 7,700 distributors
• Export Markets: Over 85 countries, focus on increasing brand sales
Financial Performance (Q2 FY24)
• Revenue Growth: 4.2% quarter-on-quarter
• EBITDA and PAT: Also showed growth
• Liquidity Position: Strong, comfortable debt-to-equity ratio
Seasonality and Growth
• Sales Distribution: Evenly spread, Q4 stronger due to exports and school exams
• Year-on-Year Growth: 13% revenue increase, 34% EBITDA rise in H1 FY23
• Volume Growth: 3% for the first half
New Product Lines
• Production Lines Timeline:
• Line 1 trial production started, revenue expected Q4 2023
• Lines 2 and 3 expected to start Q1 2024
• Focus on Domestic Market: Anticipated growth in stainless-steel bottles
Financial Strategy
• Debt Repayment: Rs. 90 crores from IPO proceeds, remaining debt around Rs. 46-47 crores
• Capital Expenditures: Rs. 27 crores for FY24, Rs. 60 crores for FY25
Market Opportunities
• Domestic Market Growth: Projected expansion from Rs. 4,000 crore to Rs. 8,000 crore
• B2B Focus: Leveraging distribution channels for domestic penetration
Future Outlook
• Revenue Contribution from New Products: 20-25%
• Profit Growth Target: 14-15% CAGR, EBITDA margin of 20-21%
• Export Growth: 20% for brands, double-digit growth domestically
Closing Remarks
• Market Trends: Increased preference for homegrown products, potential for higher exports
• Final Thoughts: Optimism about growth trajectory and acceptance of new products