Linc Pen & Plastics Ltd Q2FY22 financial results

Highlights of the financial result:

● Revenues were 93 percent of pre-Covid revenues (Q2 FY 2019-20).
● Revenues grew 71 percent QoQ and 46 percent YoY.
● Revenue rebound was despite the closure of schools, colleges and other educational institutions.
● Profit before tax was Rs. 480 lakh, surpassing the pre-Covid level of Rs. 463 lakh in Q2 FY 2019-20.
● Cash profit was Rs. 790 lakh, a YoY growth of 276 percent.
● The improved product mix included non-stationery items.
● We moderated operational costs, countering to some extent an increase in raw material prices.
● We focused on marketing value-added products, strengthening the product mix.
● Pentonic accounted for 40 percent of revenues.
● Finance cost declined from Rs. 93 lakh in Q2 FY 2020-21 to Rs. 15 lakh this quarter.

Domestic performance

● Domestic revenues of the Company increased from Rs. 4,912 lakh in Q2 FY 2020-21 to Rs. 7,647 lakh in Q2 FY 2021-22.
● The Company continued to widen its distribution network during the quarter under review. The number of retail outlets serviced as on 30th September, 2021 was 1.51 lakh as compared to 1.45 lakh as on 30th June, 2021
● Consumer sentiment improved on account of schools and colleges opening towards the end of the calendar year.
● The Company’s Rs. 10+ portfolio accounted for 54 percent of the revenues (pre-Covid 52 percent).

Export performance
● Exports accounted for 18.6 percent of our revenues during the quarter.
● Exports of the Company grew by 13.2 percent YoY and 40.7 percent QoQ.

Commenting on the results, Deepak Jalan, Managing Director, Linc Pen & Plastics Ltd. said: “Despite the pandemic continuing to be a threat to the stationery and writing instruments industry, Linc grew revenues to near pre-Covid levels. The creditable factor was that the Company posted a profit before tax above the pre-Covid level despite a sharp increase in raw material (plastic granules and ball pen ink) prices.'

Linc moved product stocking of from stationery shops to general stores, widening distribution coverage and the possibility of impulse purchase.

The Company’s inventories and debtors witnessed a decline of Rs. 880 lakh and Rs. 400 lakh respectively.

Borrowings of the Company declined by Rs 500 lakh during the quarter under review. The Company continued to focus on increasing the proportion of value-added products.”