Flair Writing Industries Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Flair Writing delivered a landmark Q2 FY26 performance with strong revenue growth and significant profitability expansion. This was primarily driven by exceptional growth in the creative and steel bottles & houseware segments, while the core pens business showed stable, albeit slower, growth. The company is progressing with its capex plans for new facilities and is focused on improving operational efficiencies and distribution.

Highlights

  • Q2 FY26 revenue surpassed ₹300 crores, reaching ₹321 crores, marking an 18.8% YoY increase.

  • Profitability significantly improved with PAT growing 30.4% YoY to ₹42.7 crores, and PAT margin at 13.3% (118 bps higher YoY).

  • EBITDA margin expanded to 18.8%, 7 bps higher compared to Q2 FY25, driven by operational efficiencies and product mix.

  • Creative business and Steel Bottles & Houseware segments demonstrated exceptional growth of 70% and 121% YoY respectively, contributing significantly to overall performance.

  • H1 FY26 revenue grew 18% over H1 FY25, and operating cash generation improved significantly to ₹51 crores from ₹6 crores in H1 FY25.

Concerns

  • Pens business growth was relatively muted at 4% YoY in Q2 FY26, with domestic own brand sales growing 6% in H1, partly due to a slight slowdown from GST implementation.

  • Domestic OEM segment saw another quarter of sharp decline, driven by reduced demand from a key pen OEM customer.

  • Inventory days remained elevated at 92 days compared to 85 days in the prior year's quarter, attributed to new product launches and backward integration.

Key financials

  1. Revenue from Operations ₹320.9 Cr +18.8%YoY
  2. Gross Profit ₹166.6 Cr +16.7%YoY
  3. Gross Profit Margin 51.9%
  4. EBITDA ₹60.3 Cr +19.2%YoY
  5. EBITDA Margin 18.8%
  6. PAT ₹42.7 Cr +30.4%YoY
  7. PAT Margin 13.3%

What they filed

Q1 FY27: revenue up 6.6%, net profit down 7.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue242 229 257 242 263 +9%256 +12%251 −2%258 +7%
EBITDA43 35 39 38 43 +0%36 +3%38 −3%36 −5%
Net profit32 27 28 27 36 +13%25 −7%29 +4%25 −7%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹317 Cr Total
  • Pens Business ₹221 Cr 69.7%
  • Creative Business ₹70 Cr 22.1%
  • Steel Bottles & Houseware ₹26 Cr 8.2%

Capital allocation

high confidence
  • Capex ₹80 Cr
    • New manufacturing unit in Valsad and other expansion opportunities
    • New facility in Surat (pencils, creative segment, sharpeners, erasers) ₹5 Cr
    So for FY '26, I'll tell you a planned capex of INR80 crores, INR90 crores was earmarked to support key strategic initiatives, which includes for the establishment of new manufacturing unit in Valsad and other expansion opportunities. Of this INR39 crores has been deployed in H1 FY '26 as part of the budgeted capital plan. And we are also going to have the new facility coming at Surat in addition to the new facility at Valsad. This is the entire capex. ... Around INR5 crores is for the new facility.
  • Debt Debt disclosed
    We continue to maintain a net debt negative position, supported by operating cash generation of INR51 crores in H1 FY '26 compared to INR6 crores in H1 FY '25.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · medium term · High confidence ahead of 15% CAGR

    Previously 15% CAGR → ahead of 15% CAGR

    Our overall revenue growth as of H1 is ahead of our guidance for 15% CAGR over the medium term.

    — Vimalchand Rathod

Pens

  • Pens Segment Growth Pens · year-end · High confidence high single-digit growth
    Yes, we are confident of doing high single-digit growth by the year-end.

    — Mohit Rathod

Capacity

  • Creative In-house Capacity Capacity · coming quarters · High confidence 75% and improve in coming quarters

    Previously 70% → 75% and improve in coming quarters

    So we have increased to 75%, and this will improve in coming quarters.

    — Mohit Rathod

Working Capital

  • Working Capital Cycle Reduction Working Capital · end of the financial year · High confidence at least 10 days
    our endeavor is to kind of reduce the entire working capital cycle by at least 10 days by the end of the financial year.

    — Alpesh Porwal

Inventory

  • Inventory Days Inventory · Medium confidence around similar levels
    our endeavor is to maintain inventory days around similar levels.

    — Alpesh Porwal

Profitability

  • EBITDA Margin Profitability · going forward · Medium confidence at a higher level
    we expect the margins to be at a higher level going forward.

    — Alpesh Porwal

Capex

  • Valsad Facility Operations Capex · Q4 FY26 · High confidence commencing
    The capex plan for our new Valsad facility is progressing as scheduled with operations commencing in Q4 FY '26

    — Vimalchand Rathod

What to watch in Q3 FY26

Valsad Facility Commissioning

Q4 FY26
Current Progressing as scheduled
Target Operations commencing

Why it matters

Crucial for boosting manufacturing capacity for writing instruments and creative products, improving efficiency, and strengthening market position.

The capex plan for our new Valsad facility is progressing as scheduled with operations commencing in Q4 FY '26, further boosting manufacturing capacity for writing instruments and creative products to meet rising demand, improving operational efficiency and strengthening our market position in those segments.

Risks & concerns

  • Subdued Demand due to Geopolitical Tensions

    medium

    Demand was subdued in the past couple of quarters due to geopolitical tensions, though recovery is now noted in exports.

    marking an encouraging recovery from the largely subdued demand seen in the past couple of quarters due to geopolitical tensions.

    Management acknowledged

  • Decline in Domestic Pen OEM Segment

    medium

    The domestic OEM segment saw another quarter of sharp decline due to reduced demand, but management does not rely on this for growth aspirations.

    As previously mentioned, the domestic OEM segment saw another quarter of sharp decline, driven by reduced demand from our pen OEM customer. Let me reiterate that we have taken no contribution from this segment in our growth aspirations.

    Management downplayed

  • Impact of GST Implementation

    low

    A slight slowdown in the pens segment was observed for 3 weeks in September due to new GST implementation.

    The only September for 3 weeks, there was a slight slowdown due to GST new GST implementation.

    Management acknowledged

Q&A highlights

6 direct
Sustainability of Steel Bottle & Houseware Growth Partial
So little spike in the run rate was also due to the festive season. But overall, from a business perspective in terms of household and steel bottle, we try to maintain the higher momentum, and we will make sure that we are continuing with the trend which is going on in terms of the domestic market.

Analyst questioned if the exceptional 121% growth in steel bottles was sustainable, and management acknowledged festive impact while committing to maintaining momentum.

Asked by Sneha Talreja

Pens Domestic vs. Export Performance Direct
Regarding the domestic own brand sales, in H1, we have grown by 6%. So the momentum was good till August. The only September for 3 weeks, there was a slight slowdown due to GST new GST implementation. But barring that, we had a very, very promising 5 months in Pen as a category in our own brands... And for exports, of course, the demand has picked up again from our existing distributors and buyers, mainly to do with the South American market and the Middle East market.

Analyst sought clarification on the divergence between muted domestic pens growth and strong export growth, which management attributed to temporary GST impact domestically and recovery in specific export markets.

Asked by Sneha Talreja

Sustainability of Gross Margin Expansion Direct
So at gross margins, we have always -- for the consumption and gross margins, we have been in the range of 50% to 52%. And if you see on the historical numbers as well as this quarter, previous quarter, previous year, we have been in the same range. What is bringing about is as I reiterate that it is the backward integration, the automation, which we are undertaking, a lot of transformation projects, which we have undertaken in factories as well as in our sales and other areas. This has largely contributed to better margin.

Analyst inquired about the drivers and sustainability of the strong gross margin expansion, with management attributing it to structural improvements and confirming it's within historical range.

Asked by Sneha Talreja

Drivers of Creative Segment Growth Direct
Aradhana, so answering your question on creative, I think it's a combination of a lot of things which has contributed to the exponential growth in this segment. Currently, we have more than we are offering more than 200 products in this category. And this range is expanding on a faster pace, and we are trying to introduce a lot of new innovative products. ... And also, we have started our own manufacturing. A lot of products have been manufactured at our own factory, which is making it faster to meet the demand of the market. And as far as the distribution penetration is concerned, of course, we have improved the distribution penetration.

Analyst asked for specific reasons behind the 70% growth in the creative segment, and management detailed product expansion, innovation, in-house manufacturing, and improved distribution.

Asked by Aradhana Jain

Increase in Inventory Days Direct
So the inventory, Aradhana, as I explained, and I would maintain the same thing that the inventory number of days is a result of the new products which we are coming up with. New products which we are introducing, whether we are manufacturing ourselves or we are outsourcing either of that. In both these cases, till the time we do the market discovery of the demand and supply, the balance between that, we have to maintain a higher inventory just to be ready for any orders to come in.

Analyst questioned the increase in inventory days, and management explained it as a strategic necessity for new product launches and backward integration to meet demand.

Asked by Aradhana Jain

Pens Segment Growth and Capacity Utilization Direct
Yes, regarding the pens, as mentioned that we have grown by 8% overall in our own brands, especially when we talk about domestic market, we have grown by 6% in H1. And this is all to do with the volumes. So the volume has increased and is increasing quarter-on-quarter. So the additional capacity is going to help us meet that demand. And going forward, we will maintain a high single-digit growth in this category.

Analyst probed on the relatively slower pens growth despite new launches and capacity, with management clarifying H1 growth and confidence in achieving high single-digit growth supported by new capacity.

Asked by Jaiveer Shekhawat

Steel Bottle Business Supply Chain and Competition Direct
Mr. Pankaj, yes, the supply chain system is different as compared to pens. But when you say from an overall perspective, yes, we are managing and in the coming future to endeavor the target growth that we have, we have a separate supply chain resource team, which dedicatedly works upon to ease the supply chain system for the steel bottle as a business. ... And when you say about the competition, yes, our endeavor is definitely to grow and reach the level and be among the top players in this particular category as well.

Analyst asked about the distinct supply chain for the steel bottle business and the company's strategy to compete with established players, which management addressed by confirming a dedicated team and growth ambition.

Asked by Pankaj Agrawal

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance and Profitability Expansion

Flair Writing Industries Limited reported a landmark Q2 FY26 performance, with quarterly revenue surpassing ₹300 crores to reach ₹321 crores, marking an 18.8% year-on-year improvement. Profitability saw robust growth, with PAT increasing by 30.4% YoY to ₹42.7 crores, and PAT margin at 13.3%. EBITDA margin expanded to 18.8%, 7 bps higher than Q2 FY25, driven by operational efficiencies and a favorable product mix towards premium offerings.

Exceptional Growth in Creative and Steel Bottles & Houseware Segments

The creative business continued its strong momentum, delivering remarkable 70% growth and contributing ₹70 crores to revenue in Q2 FY26. The steel bottles and houseware segment also showed stellar performance, more than doubling its revenue with 121% growth to ₹26 crores. These two segments combined grew by a staggering 81% in Q2 FY26, reinforcing their position as key drivers of the company's portfolio expansion and demand across domestic markets.

Pens Business Stability and Export Recovery

The core pens business grew 4% year-on-year to ₹221 crores in Q2 FY26. While domestic own brand sales grew 6% in H1, a slight slowdown was noted in September due to new GST implementation. Export sales, however, showed strong recovery, with export owned brands growing 32% and OEM exports growing 53%, leading to an overall export growth of 41%. The export contribution to total sales remained stable at 15.5% to 16%.

Strategic Capex for Capacity Expansion

The company's capex plan for its new Valsad facility is progressing as scheduled, with operations expected to commence in Q4 FY26. For FY26, a planned capex of ₹80-90 crores has been earmarked, with ₹39 crores already deployed in H1. Additionally, a new facility in Surat, with a capex of approximately ₹5 crores, is being established to focus on pencils, creative segment products, sharpeners, and erasers, further boosting manufacturing capacity and operational efficiency.

Working Capital Management and Inventory Strategy

Flair Writing aims to reduce its overall working capital cycle by at least 10 days by the end of the financial year. While inventory days remained elevated at 92 days (compared to 85 days YoY), management noted a reduction from the preceding quarter. This higher inventory level is a strategic decision to support new product launches and backward integration, ensuring adequate stock to fulfill demand during market discovery phases.

Product Innovation and Distribution Enhancement

The company continues to focus on innovation and portfolio expansion, introducing 14 new products in the creative range during Q2 FY26, bringing the total to 237 offerings. In the pens segment, 17 new pens were released across mass, mid-premium, and premium price points. Distribution channels are being strengthened across general trade, modern trade, and e-commerce, with a focus on increasing throughput per outlet and deepening network reach.

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