Linc (formerly Linc Pen and Plastics), the country’s third largest pen and writing instrument-maker, is expecting to reach or better pre-Covid level sales by end-FY22.

Sales in the months of September and October have already been higher than pre-Covid levels. The management is confident of continuing with the momentum as schools, colleges and educational institutions reopen and on the back of having increased its distribution reach to 1,51,000 outlets pan-India (from 1,45,000 in the June FY22 quarter). Distribution expansion happened as the company started pushing its offerings in general stores rather than focusing on stationery and educational item shops

The plan is to take the distribution reach up to 2,50,000 over the next few quarters.

According to Deepak Jalan, MD, Linc, sales as of Q2FY22 is at 93 per cent of pre-Covid levels and if the momentum witnessed during the Sept-Oct months continue, then numbers for the full year can better pre-Covid levels. By Q3FY22 (December-end), the writing instrument-maker plans to surpass its pre-Covid numbers.

School stationery offerings and educational product offerings continue to be amongst the worst hit Covid segments.

Known for making ‘Pentonic’ branded pens and marketing and selling Mitshubishi’s ‘Uniball’ pens, Linc competes with the likes of Cello, Flair and ITC’s Classmate in the segment.

The Kolkata-based company reported a revenue of ₹94 crore (up 71 per cent y-o-y) and a PAT of ₹3.6 crore (63 per cent of pre-Covid levels) for the quarter-ending September 30, 2021 (Q2FY22). EBITDA during the period stood at 8.6 per cent.

The improvement in numbers came as the company reduced operational costs, focused on marketing value-added offerings and improved product mix. Finance cost was down to ₹15 lakh, from approximately ₹93 lakh in the comparative period last year.

“The recovery momentum is very much visible and if it continues, then we can improve on pre-Covid numbers by the end of this fiscal. Schools, colleges & educational institutions are reopening. So there’ll be pick-up from that side too. Also, we intend to push the average selling price higher with premiumisation of offerings,” he told BusinessLine .

For Linc, pens priced at ₹10 and above account for 54 per cent of sales.

Price Revision

A conscious push towards premiumisation – through Pentonic – and some increase in price following a rise in raw material costs have led to improvement in average selling to ₹7, up from ₹5.

New launches in the ₹20 and ₹30 ranges are expected in January.

A change in tax structure – with GST rates being upped to 18 per cent, from the previous 12 per cent – has also led to an upward revision in prices.

Pens are generally sold taking into account the coinage or in rounded numbers, i.e. they come in multiples of ₹5, ₹10 or ₹20 and so on. However, price revisions to the tune of 5 -10 per cent saw retail prices increase to odd-numbers. For example, a ₹10 pen now sells at ₹11 and a ₹5 pen at ₹7.

As a result, Jalan points out that there are “bundling offers” at the retailer’s end. So, three pens that would normally be priced at ₹21 will now be available at ₹20 and so.

“The good thing is that the trade has accepted this hike in prices, even though it may be odd numbers and so on. So there are bundling offers and some discounting at the retail end which has helped continue on with the volumes,” he explained.

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