FLAIR WRITING INDUSTRIES LTD
ABOUT
- It is among the top three players in the overall writing instruments industry.
- Market share of approximately 9% in the overall writing and creative instruments industry in India (as on FY’23)
- Among the top two fastest growing organized players in terms of revenue as compared to overall writing and creative instrument industry growth rate
Industry Growth Rate: 5.5% CAGR (2017-23)
Company’s Growth Rate: 14% CAGR (2017-23)
BRANDS & PRODUCTS:
1. FLAIR:
“Flair” was established in 1976 for the manufacturing of fountain pens, ball pens and refills by M/s. Wimco Pen Co, a partnership firm which included Mr. Khubilal Jugraj Rathod, one of the Promoters as partner, for manufacturing metal pens
Upon separation of businesses among the partners of M/s. Wimco Pen Co, the “Flair” brand was subsequently transferred in 1986 to a partnership firm established by the Promoters, M/s. Flair Writing Instruments, which later got converted into the present Company in 2016.
Products under “Flair” brand
a) plastic and metal pens (ball pens, fountain pens, gel pens, roller pens and metal pens), - the largest category in terms of number of products offered,
b) stationery products (mechanical pencils, highlighters, correction pens, markers, gel crayons and kids’ stationery kits),
c) calculators,
d) houseware products and
e) steel bottles.
f) creative range of products (water colours, crayons, sketch pens, erasers, wooden pencils and geometry boxes, fine liners, sharpeners and scales)
Price point in Flair Brand: 5/- to 250/-
Total 806 SKUs as on FY’23.
Highest selling Flair product in FY’23 were “Ezee-Click Ball Pen” & “Writometer”
HOUSER:
Products under Hauser brand:
a) metal and plastic pens (ball pens, fountain pens, gel pens and liquid ink pens)
b) stationery (whiteboard markers, permanent markers, highlighters, mechanical pencils and correction pens)
Price points 6/- to 325/-.
Highest selling Hauser product: XO Ball Pen & Sonic Gel Pen
Pierre Cardin:
Offering pierre cardin (a French brand) since 2012 >> After the agreement between PCL S.A. & Flair Pens.
Pursuant to exclusive brand authorisation arrangements entered into with PCL S.A., the Company has recently commenced the export of “Pierre Cardin” products to certain countries which is subject to payment of a commission.
Products under the brand:
- ball pens, fountain pens, roller pens, mechanical pencils and gift sets.
- This brand targets premium segment consumers, including professionals and offices
- Price point: 50-3000/-
- Highest selling ones: Golden Eye Roller Pen & Lapaz Ball Pen.
Other Brands:
ZOOX: A mid-premium category brand
Houseware Products: casseroles, bottles, storage containers, serving solutions, cleaning solutions and basket and paper bins. Manufacture & sell them through the subsidiary FWEPL
- Steel Bottles
- Received orders from one of our key OEM customers with whom our Company has a relationship of more than 15 years
- One manufacturing line has been commissioned in the month of March 2023
- Intend on commissioning two more manufacturing lines during the second half of Financial Year 2024
- Out of the three lines, two lines are proposed to be dedicated to OEM customer and one line is proposed to be dedicated for manufacturing and sale in India and for exports under our brands
- Manufacture & sell via subsidiary FCIPL
Key Competitors:
COMPETITIVE STRENGTH:
Largest Distributor/Dealer Network:
According to CRISIL, despite the growing share of modern retail formats, the writing instruments industry in India heavily relies on the traditional manufacturer-distributor-retailer model.
My thought: Writing instruments we don’t usually buy online, we go to the store and pick one instead. So the distributor/dealer thing should continue.
Company has 131 super-stockist (including Flair sporty).
In India, it designate third-party super-stockists for a particular area, who then appoint distributors and build long-term relationships with them.
Relationship with top-5 super stockists averaged ~25 years.
Largest Player in Pens:
Largest player in pens (contribute 82% of overall revenue in VALUE terms by FY’23).
Total number of stock keeping units (“SKUs”) of pen products along with the volume sold in the Financial Years 2021, 2022 and 2023:
Revenue from Pen segment (by Brands):
Diversified Range of products:
Most comprehensive product portfolio in the writing and creative instruments industry in India.
Offer products at price points 5-3000/-
Mass-Segment: 5/- to 15/-
Mid-Premium Segment: 16/- to 100/-
Premium Segment: >100/-
Partnership with international Brands / One of largest Exporters:
It has established long-term relationships with international companies for which it manufacture and distribute or are a contract manufacturer.
Relationship with the five largest customers located in U.S., United Arab Emirates, Yemen, Japan and Colombia averaged approximately 15 years ( contributed 61.19% of revenue from export)
As of March 31, 2023, 54 international distributors & products sold bby distributors in 97 countries.
Also entered into OEM arrangements with various international companies for contract manufacturing and exporting.
Economies of Scale:
11 manufacturing plants.
Nine of the manufacturing plants in Naigaon, Daman and Valsad are located in proximity to the major Indian port in Nhava Sheva, Maharashtra
& Other two i.e. Dehradun, Uttarakhand are located in proximity to the inland container depot in Moradabad, Uttar Pradesh.
Players with in-house manufacturing capabilities can produce products at lower cost in addition to having the flexibility to innovate and develop products that satisfy changing consumer preferences.
It is clearly visible from the operational performance w.r.t. competitors as below:
Historical Track Record (P2P ANALYSIS):
As above, the company seems clear cut MARKET LEADER in the industry.
FINANCIALS:
My Assessment:
RISKS:
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A significant chunk of revenue comes from “Flair”, “Hauser” & “Pierre Cardin” Brands. So any harm to the brand value may impact revenue.
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Dependent heavily on its vast distributer network. Any disruption in this network may hamper the business.
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Business environment is competitive. Competition from existing players or new entrants may impact the business.
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Expansion into new product categories such as house-ware products etc. might backfire.
Disc: New listing | No position | Will be tracking
