Flair Writing Industries Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Flair Writing delivered a strong Q3 and 9M FY26, marked by robust revenue and EBITDA growth, driven significantly by its Creative and Steel Bottle segments. The company surpassed its annual revenue growth guidance and declared an interim dividend. While gross margins saw a slight compression due to product mix, operating leverage led to EBITDA margin expansion. Management addressed concerns regarding working capital, attributing it to strategic expansion, and outlined plans for capacity enhancement and continued growth.

Highlights

  • Robust Q3 FY26 revenue growth of 20.1% YoY to INR 317.7 crores, driven by strong demand across segments.

  • EBITDA increased by 25.7% YoY to INR 56.9 crores in Q3 FY26, with margin expansion of 80 bps to 17.9%, demonstrating operating leverage.

  • Strong 9M FY26 performance with revenue up 18.6% YoY to INR 927.2 crores, consistently surpassing the stated 15% CAGR guidance.

  • Creative and Steel Bottle & Houseware segments showed impressive growth of 78.5% YoY in Q3 FY26 and 71.8% and 102.2% YoY respectively in 9M FY26.

  • Interim dividend of INR 0.50 per share declared, reinforcing commitment to shareholder returns.

Concerns

  • Gross profit margin decreased by 95 bps YoY to 50.9% in Q3 FY26, primarily due to a change in product mix.

  • PAT growth (13.2% YoY) was slower than EBITDA growth (25.7%) in Q3 FY26, attributed to a higher 'other income' base in Q3 FY25.

  • Working capital cycle has increased over the last 3 years, with higher receivables and inventory, though management states it's a conscious strategy for new product launches and distribution.

Key financials

  1. Revenue ₹317.7 Cr +20.1%YoY
  2. Gross Profit ₹161.7 Cr +17.9%YoY
  3. Gross Profit Margin 50.9% -0.95%YoY
  4. EBITDA ₹56.9 Cr +25.7%YoY
  5. EBITDA Margin 17.9% +0.8%YoY
  6. PAT ₹33.1 Cr +13.2%YoY

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

SegmentRevenue GrowthRevenue
Pens Business (Q3 FY26)7.3%—
Creative & Steel Bottle and Houseware (Q3 FY26)78.5%—
Creative Division (9M FY26)71.8%₹211 Cr
Steel Bottles and Houseware (9M FY26)102.2%₹64 Cr
Domestic Own Brand Sales (9M FY26)21.3%₹752.79 Cr
Export Own Brand Sales (9M FY26)28.8%₹88.38 Cr
Export OEM Sales (9M FY26)22.6%₹67.37 Cr
Domestic OEM (Flomaxe)—₹6 Cr

Capital allocation

high confidence
  • Capex ₹80 Cr
    • Flomaxe Surat facility (plant and machinery) ₹9.6 Cr
    • Second new building (under construction) ₹8.28 Cr
    • Additional Flomaxe unit at Surat (building, plant, machinery) ₹8.5 Cr
    At our Flomaxe Surat facility, the total CAPEX as of 9-month FY '26 stands at INR 9.6 crores, primarily directed towards plant and machinery, and the subsidiary continues to contribute... In addition, we have invested INR 8.28 crores in the second new building currently under construction, which is expected to be completed by Q1 FY '27. ...we expect an additional INR 8.5 crores of capitalization in terms of building and plant and machinery. ...this year, we will be doing around INR 80 crores, INR 90 crores of CAPEX, we are already through with around INR 60 crores, INR 65 crores.
  • Dividend ₹0.5/share (interim)
    the Board of Directors has approved an interim dividend of INR 0.50 per share, representing 10% of face value of our equity shares.
  • M&A Flomaxe Stationery JV Joint venture · Announced

    Expected to commence manufacturing of wooden pencils and boost capacity for polymer pencils, erasers, sharpeners and allied categories.

    In addition, the Flomaxe Stationery JV is expected to commence manufacturing of wooden pencils and also significantly boost capacity and sharpen our focus on polymer pencils, erasers, sharpeners and allied categories.
  • M&A Maped France Joint venture · Integrated

    Distribution alliance to deliver premium Creative products to domestic and global customers.

    Maped partnership starting to contribute to revenue

    while our distribution alliance with Maped France positions us to deliver premium Creative products to domestic and global customers. ...Having operationalized the Flomaxe JV in this year and Maped partnership starting to contribute to revenue, we are also exploring opportunities for inorganic acquisition in the fast-growing segments of our business.
  • M&A Fast-growing segments Acquisition · Announced

    Exploring opportunities for inorganic acquisition.

    we are also exploring opportunities for inorganic acquisition in the fast-growing segments of our business.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY26 · High confidence surpassing 15% CAGR

    Previously 15% CAGR → surpassing 15% CAGR

    Our revenue growth has consistently surpassed our stated guidance of delivering a 15% CAGR, reflecting a sustained momentum across our business and the strength of our underlying growth drivers. Hence, we are confident in surpassing our guidance of 15% for FY '26.

    — Vimalchand Rathod

  • Overall Revenue Growth Revenue · next 2 years · High confidence higher growth trajectory than 15% CAGR

    Previously 15% CAGR → higher growth trajectory than 15% CAGR

    We have high growth visibility over the next 2 years and thus are confident in delivering higher growth trajectory than our current guidance in the coming 2 years.

    — Alpesh Porwal

  • Pens Segment Growth Revenue · FY27 · High confidence high single-digit
    And we have always maintained that going forward also in FY27, we would be targeting high single-digit number in that, because still we feel there is a lot of scope in this category going forward.

    — Mohit Rathod

  • Creative & Steel Bottles YoY Growth Revenue · FY27 · Medium confidence 40%, 50%
    And in terms of Creative and Steel Bottles, we still expect like a 40%, 50% of Y-o-Y growth in FY '27.

    — Aradhana Jain

Capacity

  • Creative Segment In-house Manufacturing Share Capacity · coming quarters · High confidence 80% plus

    From 75% today

    See, with the new facility coming in, we will definitely increase our capacity in Creative currently, which is 75%, we tend to bring it to 80% plus in coming quarters.

    — Mohit Rathod

Working Capital

  • Working Capital Cycle Reduction Working Capital · by end of this year · High confidence 10 days
    So, we expect the working capital cycle to reduce there. And as I have stated in the earlier calls also, the working capital cycle will bring it down by 10 days at least by end of this year.

    — Alpesh Porwal

Profitability

  • EBITDA Margins Profitability · FY27 · Medium confidence improve slightly

    From current 18% levels today

    EBITDA margin will gradually go up as economies of scales kick in and once new units are fully operationalized.

    — Alpesh Porwal

  • ROE Profitability · next financial year · Medium confidence around 15%

    From 11% to 12% today

    Sir, currently, it is around 11% to 12%. And you can say the competitor in the listed frame is generating the 20% to 22% of ROE. And now we have added the high-growth, high-margin business, the Creative segment, and we may reach to INR 300 crores of top line in the current financial year. So, can we expect around 15% of ROE to be generated in the next financial year?

    — Nilesh Doshi

Shareholding

  • Promoter Stake Shareholding · November end of this calendar year · High confidence 75%
    Well, by the guidelines, we have time till November end of this calendar year.

    — Pravin Rathod

Other Income

  • Other Income Other Income · per quarter · High confidence INR 3-4 crores
    And I expect it to continue in the range of INR 3 crores to INR 4 crores per quarter, not more than that.

    — Alpesh Porwal

What to watch in Q4 FY26

Valsad Facility Operationalization

Q4 FY26
Current Partially operational in Q4 FY26
Target Full operationalization

Why it matters

Full operationalization of the Valsad facility will strengthen manufacturing capacity and complete IPO proceeds commitment, impacting future growth.

On CAPEX and expansion initiatives, the new Valsad facility is slated to become partially operational in Q4, which will further strengthen our manufacturing capacity in writing instruments and stationery.

Risks & concerns

  • Gross Profit Margin Compression

    medium

    Gross profit margin decreased by 95 bps YoY to 50.9% in Q3 FY26 due to a change in product mix.

    Management acknowledged

  • Increased Working Capital Cycle

    medium

    Working capital days have increased over the last 3 years due to higher credit for mass/premium products and increased inventory for new product launches, though management aims to reduce it by 10 days by year-end.

    Both acknowledged, strategic decision

  • Slower PAT Growth Relative to EBITDA

    low

    PAT grew slower than EBITDA in Q3 FY26 (13.2% vs 25.7%) primarily because Q3 FY25 had a higher other income base.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Creative Segment Volume Growth Partial
But yes, for your number, it's about 141% growth.

Analyst sought specific volume growth for the high-growth Creative segment, which management provided an estimate for despite data complexity.

Asked by Kapil Jagasia

Hauser XO Contribution to Pen Sales Evasive
But yes, just to answer that, XO does not contribute a major number in the overall Pen category.

Analyst tried to ascertain the contribution of a key product (Hauser XO) to Pen revenue, but management declined to provide specific figures due to competitive reasons.

Asked by Aradhana Jain

Working Capital Cycle Increase and Strategy Direct
So, what you see is working capital cycle out here, it's a conscious decision. It's not something that it is not in our control. Traditionally, we have been giving higher credit. And then we have always seen, if you would see the past balance sheets also, you will see a higher number of days against debtors' revenue from operations.

Analyst challenged the rising working capital days, and management provided a detailed strategic rationale, linking it to product mix, new launches, and distribution expansion, while also committing to a reduction target.

Asked by Manpreet Arora

Pen Segment Premiumization vs. Mass Growth Direct
So, more or less, if you look at the numbers, see, when we talk about premiumization, of course, we have a big share of premium product range and mid-premium product range. But yes, the volumes in mass category is increasing at a rapid speed, which when we look at the overall numbers, it looks at the overall realization is same.

Analyst questioned the lack of premiumization reflected in stable Pen realizations, and management clarified that strong mass segment volume growth was offsetting premium product contributions.

Asked by Resha Mehta

ROE Improvement Target for Next FY Partial
But surely, you see over here the new segments of Creative and Steel Bottles in the last 3 quarters of the performance, and you said it right, and I would appreciate that you noted that, that these are actually going to contribute in a large way in our bottom line and ROE in fact. So, once the economies of scale kicks in, we would see the ROE numbers going up, all the bottom line going up.

Analyst pushed for a specific ROE target (15%) for the next fiscal year, given the high-growth segments. Management acknowledged the potential for improvement but refrained from giving a precise number.

Asked by Nilesh Doshi

Future CAPEX Plans Post-Valsad Commissioning Direct
So, with the commissioning of the Valsad unit, our IPO proceeds commitment would be over by then. And then we will look towards only the maintenance CAPEX and the investment in the moulds for launching new products. So, there won't be any major manufacturing facility being added, until these are fully utilized.

Analyst sought clarity on the CAPEX trajectory beyond the current expansion phase, and management outlined a shift towards maintenance and product development CAPEX, indicating a period of consolidation.

Asked by Aradhana Jain

Domestic OEM Business Status Direct
So, the OEM business in any case, so the problematic OEM customer, anyway, so the revenue recorded in this quarter would be 0, right, from them? ... In domestic, yes.

Analyst confirmed the complete cessation of business with a previously problematic domestic OEM customer, providing clarity on a past concern.

Asked by Resha Mehta

2 min read 5 chapters

Detailed narrative

Robust Q3 & 9M FY26 Performance

Flair Writing reported a strong Q3 FY26, with revenue growing 20.1% YoY to INR 317.7 crores and EBITDA increasing 25.7% YoY to INR 56.9 crores, leading to an 80 bps margin expansion to 17.9%. For the nine months ended December 31, 2025, revenue grew 18.6% YoY to INR 927.2 crores, and EBITDA rose 20.9% YoY to INR 166.8 crores. The company expressed confidence in surpassing its stated 15% CAGR guidance for FY26, projecting higher growth over the next two years.

Strong Growth in Creative and Steel Bottle Segments

The Creative and Steel Bottle & Houseware segments were significant growth drivers, collectively delivering an impressive 78.5% YoY growth in Q3 FY26. In 9M FY26, the Creative division grew 71.8% YoY to INR 211 crores, while Steel Bottles and Houseware rose 102.2% YoY to INR 64 crores. The Pens business also contributed with a 7.3% YoY growth in Q3 FY26, and management targets high single-digit growth for FY27, with expectations of 40-50% YoY growth for Creative and Steel Bottles in FY27.

Strategic Capacity Expansion and Product Portfolio

The company's in-house manufacturing share has increased to 75%, with plans to further boost Creative segment capacity to over 80% in coming quarters. The new Valsad facility is slated for partial operationalization in Q4 FY26, and an additional INR 8.5 crores will be capitalized for a new Flomaxe unit in Surat. As of December 31, 2025, Flair Writing expanded its portfolio by introducing 28 new products, totaling 240 product offerings in Creatives.

Working Capital Management and Profitability Outlook

Management acknowledged an increase in the working capital cycle over the last three years, attributing it to a conscious strategy involving higher credit for mass and premium products, and increased inventory for new product launches. Despite this, they aim to reduce the working capital cycle by 10 days by the end of the current fiscal year. EBITDA margins are projected to gradually improve as economies of scale kick in and new units become fully operational, with ROE expected to increase from the current 11-12% in the next financial year.

Export Performance and Strategic Collaborations

Export own brand sales grew 29.9% YoY in Q3 FY26 and 28.8% YoY to INR 88.38 crores in 9M FY26, contributing to an overall export growth of 26.5% in Q3. Strategic collaborations, including Disney licensing and a distribution alliance with Maped France, are expected to deepen market engagement. The Flomaxe Stationery JV is also set to commence manufacturing of wooden pencils and boost capacity for polymer pencils and allied categories.

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