{"id":35192,"date":"2023-10-27T12:34:12","date_gmt":"2023-10-27T07:04:12","guid":{"rendered":"https:\/\/flattrade.in\/kosh\/?p=35192"},"modified":"2023-10-27T13:03:24","modified_gmt":"2023-10-27T07:33:24","slug":"indias-writing-instrument-industry-to-see-sales-grow-13-15-this-fiscal-report","status":"publish","type":"post","link":"https:\/\/flattrade.in\/kosh\/indias-writing-instrument-industry-to-see-sales-grow-13-15-this-fiscal-report\/","title":{"rendered":"India\u2019s writing instruments industry to see sales grow 13-15% this fiscal: Report"},"content":{"rendered":"\t\t
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India\u2019s writing instruments industry is expected to witness strong sales growth of 13-15% this fiscal, helped by sustained rise in demand from the education sector as students return to schools and colleges as well as higher export demand from the US, according to rating agency CRISIL. Meanwhile, the industry saw a growth of 33% in the preceding financial year.<\/p>\n

\u201cThe demand for writing instruments has breached the pre-Covid levels, with 100% return to physical mode of education from the interim online mode,\u201d said Jaya Mirpuri, Director, CRISIL Ratings. Mirpuri added that the overall growth in the education sector on the back of government initiatives such as the National Education Policy and Samagra Shiksha Scheme focusing on integrated school education from pre-school to Class XII augurs well for the industry\u2019s growth. The rating agency said that in the longer term, the sector will benefit from India\u2019s demographic dividend and increasing share of organised players.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Factors favouring organised players <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The rating agency said that exports, which accounts for 25% of the sector\u2019s revenue, are estimated to increase by 15-20% in the current financial year. The rise in exports is attributed to tie-ups with international brands for sales in the US as part of the strategy to de-risk from China.<\/p>

Further, the rating agency said that India\u2019s young population is expected to boost the revenue of the writing instruments industry. The median age of 28 years in India translates to a large number of students and a large workforce as the country\u2019s manufacturing and services sectors expand.<\/p>

Moreover, the organised segment of the industry, which accounts for nearly 80% of the industry, will be the biggest beneficiary, noted the rating agency. In the past three fiscals, the market share of organised manufacturers have risen from about 65% to nearly 80% of the Rs 10,000 crore industry. The organised players have strengthened their distribution and retail channels, and provide diverse product portfolios, stated CRISIL.<\/p>

The rating agency said that better economies of scale have resulted in pricing flexibility for the organised players and has helped to reduce the gap between branded and unbranded writing material, while providing superior quality. Unorganised manufacturers, which were dependent on cheaper imports from China for cost arbitrage, have lost their edge after the implementation of the Goods and Services Tax and they are unable to compete with branded manufacturers in a quality-conscious market.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Improved operating margin<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The operating profitability of the industry is expected to expand by 150-200 bps to about 13% this fiscal due to prices of key raw materials (polypropylene for pens and lead for pencils) falling about 15% over the past fiscal. The decline in prices of raw materials will play an important role in improving the operating margin as raw materials account for 60-65% of their total cost. The margin improvement would be higher but for increase in distribution costs due to footprint expansion.

\u201cThe increased demand will push manufacturers to increase capacity as well as innovation, and gross block at the industry level will be up 30% YoY,\u201d said Says Rushabh Borkar, Associate Director, CRISIL Ratings. Borkar further said that though this will increase debt levels, strong cash flows supported by healthy profitability will help sustain credit profiles.<\/p>

The rating agency said that the gearing and interest coverage ratio of its sample set (five manufacturers rated by CRISIL Ratings, accounting for half of the organised segment revenue) will remain comfortable at 0.2 time and 12.5 times, respectively. However, unexpected movement in prices of raw materials or change in consumer behaviour will be key monitorables.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tOpen a Free Demat Account<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"India\u2019s writing instruments industry is expected to witness strong sales growth of 13-15% this fiscal, helped by sustained…","protected":false},"author":5,"featured_media":35197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"csco_display_header_overlay":false,"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","csco_post_video_location":[],"csco_post_video_location_hash":"","csco_post_video_url":"","csco_post_video_bg_start_time":0,"csco_post_video_bg_end_time":0,"csco_post_video_bg_volume":false,"footnotes":""},"categories":[65],"tags":[990,46,48,26,989,986,985,47,24,987,23,84,973],"class_list":{"0":"post-35192","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-industry","8":"tag-manufactuers","9":"tag-market-news","10":"tag-nifty-today","11":"tag-nse","12":"tag-pen","13":"tag-pencils","14":"tag-pens","15":"tag-sensex-today","16":"tag-share-market","17":"tag-sketch-pens","18":"tag-stock-market","19":"tag-stocks","20":"tag-writing-instruments","21":"cs-entry","22":"cs-video-wrap"},"yoast_head":"\nIndia\u2019s writing instruments industry to see sales grow 13-15% this fiscal: Report - 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