Linc Ltd (NSE: LINC) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Narayan Kumar Dujari — Chief Executive Officer
Sanjeev Sancheti — Founding Partner
Analysts:
Unidentified Participant
Navin Agrawal — Analyst
Sucrit Patil — Analyst
Rakesh Wadhwani — Analyst
Rake Resham Mehta — Analyst
Himanshu Upadhyay — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Link Limited Q Earnings conference call. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand over the conference to Mr. Navina Grawal Head Institution equities at SKP Securities Ltd. Thank you. And over to you sir.
Navin Agrawal — Analyst
Good morning ladies and gentlemen. I am pleased to welcome you to Link Limited’s Q1 FY26 result phone call. We have with us Mr. N.K. dujari, Director of Finance and CFO and Mr. Sanjeev Sancheti from Euritus Advisors LLP, the company’s IR advisors. We’ll have the opening remarks by the management followed by a Q and A session. Thank you and over to you Mr. Dujari.
Narayan Kumar Dujari — Chief Executive Officer
Thank you Naveenji. Good afternoon and thank you for joining us for link Limited Q1 FY26 investecon the first quarter of FY26 delivered a steady top line performance with revenue growing 5.3% year on year. This was driven by a strong showing across the Link brand portfolio, increased contribution from allied stationery products and sustained momentum across general trade, corporate and E commerce channels. From a strategic perspective, we remain focused on future proofing the business and unlocking multidimensional growth. Our diversification efforts continue to gain traction as we expand beyond pens into high potential adjacent categories such as markers, highlighters and pencils.
These category extensions, aligned with evolving customer preference and wider use range of usage occasion will expand our total addressable market from 6,600 crore to about 38,000 crores. We are actively enhancing our innovation pipeline. Building on recent launches, we plan to roll out expanded variant of markers and highlighters and a comprehensive range of essential stationery products notably our Swipe marker range and Pentonic Mechanical pencil. Both recent additions have received strong initial consumer feedback. Their full scale rollout is expected to contribute meaningfully in the near term. On the export fund, we are witnessing early traction despite geopolitical uncertainties and shifting trade dynamics.
Our emphasis on pricing, agility, supply, reliability and innovation led differentiation continue to support overseas growth and strengthen strategic partnerships. Our strategic initiatives are advancing steadily although certain timelines have been recalibrated. The joint venture and Japan based Mitsubishi Pencil Co. Is now expected to begin operation by Oct. 25 with a slight delay, preparative work remains on track. Our joint venture with Korean stationary manufacturer Maurice is closely linked to our upcoming manufacturing facility in West Bengal which is scheduled for commencement in the fourth quarter of FY26. The partnership with our Turkish counterpart is advancing steadily as we align on key commercial and strategic operational milestones.
Meanwhile, our Kenya subsidiary has experienced a slower than expected start. But we remain committed to its long term potential and continue to invest in its growth. In Q1FY26, our operating income stood at 136, 13698 lakhs marking a 5.3% year over year growth. Operating EBITDA stood at 1314 lakhs with a margin of 9.6%. PAT for the quarter declined 16.4% year on year to 705 lakhs due to cost headwinds and shift in product mix translating to a part margin of 5.1%. Our balance sheet remained robust supported by net free cash and cash equivalent and strong capital efficiency ratios.
During the quarter we generated 22111 lakhs in two cash flow from operations and closed with a net free cash position of 2121 lakhs highlighting our continued focus on financial prudence and maintaining a future ready balance sheet. Asset productivity remains healthy with fixed hazard turnover at 4.26x indicating efficient utilization of our asset base. The cash conversion cycle also improved marginally to 59 days from 61 days in the previous quarter reflecting better working capital management. With that, we now open the floor for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sukrit Patil from Eyesight Fintrade Private Limited. Please go ahead.
Sucrit Patil
Morning sir. My name is Sukrut Patil. I want to understand your view on how is Link planning to grow its business over the next two to three years by expanding into adjacent product product categories or leveraging its distribution network for cross category penetration especially as writing instruments are facing saturation in urban markets. What is Link’s plan of action in the next two to three years? Thank you, sir.
Narayan Kumar Dujari
Thank you. Mr. Patil, we have shared in the past our strategy going forward. Will be to expand our allied stationary portfolio through innovation, innovative products and new set of designs. So we are on track visa with that and writing instrument. We are trying for price premiumization of the product. The growth will in the writing instrument growth should come from the premium as far as the overall company growth. Export will be definitely a big growth driver for us going forward. And with that added will be the Allied stationary range. And with the help of Pantonic now our distribution channel is pretty strong and we are present across India.
The new launches which we are planning with the help of a few of our JV like Morris Unival will also add to our growth momentum.
Sucrit Patil
Okay, thank you very much.
operator
Thank you. The next question is from the line of Rakesh from Nine Rivers Capital. Please go ahead.
Rakesh Wadhwani
Hi. Am I audible?
Narayan Kumar Dujari
Yes, you are.
Rakesh Wadhwani
Yeah. Hi sir. Hi sir. Thank you very much for the opportunity. So first question with respect to the volumes, if you look at the volumes of the link and if you look at the volume of pentronic pens from the last three quarters, the volumes are coming down. One of the reason you have highlighted in the past is because of the restructuring that we are doing with product portfolio. We are, we are cutting down the old products or SKUs and cutting down the five rupees SKU. Sir, when do you think this restructuring will end?
Narayan Kumar Dujari
Thank you, Mr. Akesh. This restructuring is, I will say is almost done. And now we are banking on the new launches in the Pantonic portfolio which is taking little extra time than what we initially thought. So the new launches was in the range of 20 to 40 rupees. And we are banking on those new launches as well as the 10 rupee. The traditional span is also doing well although the competitive intensity has increased in 10 rupee category. But I think we should be able to do away with the, you know, higher price range of Pantonic and we hope that next few quarters should give us good traction.
Rakesh Wadhwani
Okay. Okay. And with respect to the one trend that I’m observing continuously is that share of traded goods is increasing. That is impacting, impacting our gross margin. But as we are going towards more and more premiumization, do you think the share of the trader will increase or it will come down in the coming. So if I look at really good shares is 41% in the Q1. So do you think it will come down?
Narayan Kumar Dujari
Yeah, no. This is a strategy we have adopted for last few quarters. We have, you know, as a part of our strategy we are increasing the portfolio like treasury and mostly traded. So we have thought about it and I think These are. These are just transitional things. And the export growth in export which we are banking heavily should be. We will be able to make up that loss of margin because of trading range with the growth in export. Because export we are having extra edge in terms of margin.
Rakesh Wadhwani
Yes.
Narayan Kumar Dujari
So margin should be better company level at the bundled margin. I think we will not sacrifice much because of the treaty going forward.
Rakesh Wadhwani
Okay, thank you for that clarification. So one last question from my side with respect to the new product launch. Can you talk about what was the total revenue in this one quarter, first quarter?
Narayan Kumar Dujari
I will come back on this. We don’t have data right now with me, but I will definitely come back on this. The exact portion of revenue on the new launches.
Rakesh Wadhwani
Sure. And continuing on that part. What. So how are you planning to launch these new products? It will be pan India or it will be with respect to the particular state. We’ll start with one state, two state and then we’ll expand or it will be product will be launched across the entire. What is our strategy on this?
Narayan Kumar Dujari
From the past experience what we have learned that any launch is actually the benefit get diluted. So what we have as a strategy, we now we take a market, a particular market, a particular zone and we do a proper thorough launch in that particular market or zone. Then only we do roll out and which again is gradual, it is not nationwide rollout immediately because the capacity is also issue initially capacities are also issue. So it is a gradual thing. We do, you know, territory by territory. We do the launches depending on the experience which gained from the previous launch of the previous, you know, territory launch.
So this, this helps us in doing the fine tuning to make it more successful.
Rakesh Wadhwani
Okay. Okay, Mr. Do sorry, I’ll come back at the queue. Thank you very much. And all the question.
Narayan Kumar Dujari
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants. You may press star and one to ask a question. The next question is from the line of Rake Desham Mehta from Green Edge Ltd. Please go ahead.
Rake Resham Mehta
Hello. Thank you for the opportunity. So I have a few questions. I think in continuation with what the previous participant asked in terms of volume degree growth. Can you just talk about what was this product restructuring that we had undertaken?
Narayan Kumar Dujari
Basically we have done away with products which are contributing not much to the margins. So we have discontinued quite a few products and make the portfolio more robust and feature ready.
Rake Resham Mehta
Okay. And would you say that the volume degrowth is kind of behind us now?
Narayan Kumar Dujari
Volume degree growth? I think this year we may not have. This year should be A reversal yet for the volume degree, what we feel this FY26 and quarter two, we don’t expect much because quarter two is the actually best quarter for writing instrument industry. So domestic, domestic business, I’m talking.
Rake Resham Mehta
Got it. And why would.
Narayan Kumar Dujari
For July quarter two the initial response is very good, the momentum is very good and we hope to maintain the momentum and we feel that we should be back on track.
Rake Resham Mehta
And any guidance you all give on the revenue growth for the full year.
Narayan Kumar Dujari
Wait for, like to wait for another quarter. Then we will come out with our revised, you know, proper planned thing. Since you know the stationary rollout is in progress, we would like to just wait another quarter and then come up with the firm guidance.
Rake Resham Mehta
Right. And on this stationary rollout. So art materials, pencils, highlighters. I think we were to launch these products. So have they been launched or are you saying that these are the products that we are yet to launch?
Narayan Kumar Dujari
Few of them have been launched. This quarter we are planning launch of crayons, erasers and maybe one or two more categories.
Rake Resham Mehta
And is this a Pan India launch across your channel or is it just in fuselage.
Narayan Kumar Dujari
Or region wise initially. And then we will roll out Pan India.
Rake Resham Mehta
Got it. And margins, we’ve declined, you know, the gross margins have declined. So I think you all referred to, you know, the profitability, profitability impact on operational fact and transitional costs. So what exactly you know is being referred to?
Narayan Kumar Dujari
Actually we. There are two factors majorly which has, you know, affected the margin this quarter. One is the rupee has weakened visa with Japanese yen. And Japanese yen is a very important currency nowadays for us because Uniball we are having almost 16, 16% sales of the company comes from Uniball. And we are buying almost on an average 5 to 7 crore worth of goods from Japan. And in this particular quarter we had around 12 to 14% depreciation of rupee visa vis JPY Japanese Yen. So that was one of the factor. Then we have taken a conscious call and we have spent it.
You know, we have made some expenditure on modern trade channels. So we wanted to push ourselves very aggressively. So benefit of which is going to come in the future quarters.
Rake Resham Mehta
Okay. And any currency hedging that we are looking for in the near future kind.
Narayan Kumar Dujari
Of hedging because as far as dollar exposure is concerned, it is auto hedged because our against our exports. We have got imports from for Delhi and raw materials, few raw material also. So it is auto hedge as far as JPY is concerned. We have done the hedging in the past but it’s a two way currency. It’s a two legged currency. So the hedging cost is very high. It is almost doing, you know, leaving it open also makes sense because of hedging cost is very high. It doesn’t make sense because it is a two legged currency and it is very volatile.
So what we do we have got, we do we try to time it to the extent possible the payments, we time it when the rates are favorable. But still the whole quarter, this whole quarter we had a very adverse situation.
Rakesh Wadhwani
So from a margin standpoint, do we expect that Q2 onwards we will be back to the double digit margin like at least 11 12% kind of an EBITDA margin.
Narayan Kumar Dujari
I think with the time lag we can take a price increase in Uniball. So because the rate increase in foreign currency does not it is not possible to do it immediately the price increase. So I think we should this quarter one thing should be can be considered as one of. We should be back to our normal margin levels gradually and I think we will come out with some, some guidance also after quarter two then we will, I think we’ll be able to explain it better.
Rake Resham Mehta
Right? Right. And you know because of the tariff situation and US is roughly 10% of our exports. So how are we seeing the US orders getting impacted? Are we seeing order cancellations, order postponements or maybe rerouting via other countries? If you could just highlight the US impact.
Narayan Kumar Dujari
You are right that we have around 8 to 10% of export business coming from us and right now we are witnessing the shipment of us is on hold because of tariff situation. But I we feel it will be a temporary issue and if it is, it is little long term. Then we have to explore opportunities of doing exports from our other subsidiary in Kenya or maybe joint venture from Turkey. We have to explore those opportunity if the tariff from India is high.
Rake Resham Mehta
So US is total 10% of your total revenues or 10% of your export.
Narayan Kumar Dujari
Revenues revenue and overall company at the company level it should be 1 and a half to 2% within 2%. But it is a very. We are banking heavily on the US business and it’s a very high growth business for us. So just to clarify here, if the tariffs are here to stay then we are little fortunate to have subsidiaries outside India and those can easily be explored.
Rake Resham Mehta
Got it. Got it. And just the last one from my side. So we have these joint ventures with Mitsubishi Pencil, Morris Korean and the Turkish partner. Right. So can you just elaborate what are these, what are the nature of, you know these three joint ventures? Which products exactly and in what phase are they in terms of launching?
Narayan Kumar Dujari
So I’ll come to the Univall JV first. Uniwall JV is basically 49% 51% JV where 51% is held by Mitsubishi Pencil Co. Japan and 49% is held by Link. And here we are going to make few products which otherwise was not available for the Indian market. So Unival range is typically in 80 plus price bracket MRP. So this product with this JV we are targeting around 50 rupees market for India. So this JV will make, we will produce these pens in India in factory in near Ahmedabad. And it is very at a very advanced stage now we are expecting sales to happen trial trial run to happen from September.
And here 75% of the business is the targeting. We are targeting for domestic market and 25% for exports by universe.
Rake Resham Mehta
So will act like as a substitution sorry for the Japanese imports that we are doing or we would still need to continue importing from Japan.
Narayan Kumar Dujari
These are added new, these are new products at a new price bracket which hitherto was not not available under Uniwall umbrella renewable brand in India. So these are not substitution. This will be additional products in the Uni Ball range.
Rake Resham Mehta
And just to clarify, basically the production will begin from September 2025, right?
Narayan Kumar Dujari
Yeah, September. And we are expecting full rollout from full gradual rollout from October.
Rake Resham Mehta
Got it. And for the other two GVs Korean.
Narayan Kumar Dujari
And the other one is a very nice, you know it’s a very small business right now and here we, we, we can expand the moment we have our Calcutta facility is ready, the infrastructure is ready. So it will happen from fourth quarter. But but now from the very small facility which we have we are targeting to launch few of their products from August end of September. These are basically retractable markers and basically retractable permanent marker whiteboard markers. It’s a something which is hitherto not available in India. These designs, these features are not available in the Indian market right now.
And the other JV is the Turkey jv. Here we are targeting the Turkey market and the commercial production has started. So the Turkey is a big used to be big market for us. Because of tariff barrier we could not do much business there. So now we are targeting to do good business from this JV going forward and we can use this for future if there is any issue in us or anywhere else.
Rake Resham Mehta
So sorry, the facility is here in India for with the Turkish jv.
Narayan Kumar Dujari
This is in Turkey. There is a partner Turkey partner which is holding 50% and link is holding. 50%
Rake Resham Mehta
and the commercial production has already begun you are saying. Right. And would this be a domestic opportunity.
Narayan Kumar Dujari
Or order book in this JV is very strong. They have got booked a very decent order. So we expect the scale may not be to the extent of what we are doing in ring, but these are very small businesses and we hope to scale up pretty fast and in a decent size.
Rake Resham Mehta
And which are the products here and would this be targeting the export market or the Indian domestic market?
Narayan Kumar Dujari
The target market is Turkey only and the product are Pentonic range and few, few Link product also, but mostly Pantonic range. And I think the other one is our subsidy in Kenya which was spoken in the past. It is a 60 subsidy and we are targeting Kenya and adjacent countries in and around Kenya. From that JV, from that subsidiary. It’s a 60, 40 substrate. 60 is held by link and 40% by Kenyan partner.
Rake Resham Mehta
All right, all right. Thank you. That’s it from me.
Narayan Kumar Dujari
Thank you.
operator
Thank you. A reminder to participants, if you wish to ask a question you may press Star and one on your Touchstone phone. The next question is from the line of Himanshu Upadhyay from Burial Rock pms. Please go ahead.
Himanshu Upadhyay
Yeah, hi, good morning. My first question was on the Link side, Pantonic side. Okay. The volume degroot seems quite significant around 6% yoy and can you tell and our realizations have slightly improved. Is it majorly because of competition on the lower price point or the 10 rupee price point and hence the volume degrowth has been there. And secondly, have we changed any terms of trade with our distributors or it is the mix which has changed and hence the realizations have improved by 70 basis points in the quarter.
Narayan Kumar Dujari
Thank you, Mr. Himanshu. Pantonic degrowth. You are right. We have challenges at the 10 rupee price point of Pantonic which is the main product. But the price increase has happened because we have launched couple of new Pantonic pens in the range of 20, 30 and 40 rupees. And these are giving. These have started giving some traction, good traction and we hope to do well in these categories in near future. So the relation has improved because of that. And Pantonic, the 10 rupee is the competitive intensity has increased and. But we have kept our positioning as strong as possible.
But we are having some degrowth in that for the timing. We have done some innovation there in Pantonic 10. We have actually launched a recyclable Pantonic in that range 10 rupee. It is made of 75% recycled material and the cost is around 5% higher. So. And that we had a very good volume of sale of from that particular pen in the last quarter. So we are trying to create some you know, awareness and some, you know innovation or some, some interest for the consumer in the 10 rupee category and trying to gain up the loss of volume there.
But that is, that is a category which is facing competitive intensity and we are holding our guns and we have to do, we hope to do better in Future.
Himanshu Upadhyay
Okay. And 20 and 30 and 40. See these products have been we have discussed for last two to three years. Should we assume that at almost all the places were pent on it, 10 and 20 rupees is available. The 20 and 30, 40 rupee products are available currently or what percentage of stores would have other.
Narayan Kumar Dujari
I think most stores should have at least 70, 80% of the range. But we are trying to make it as close to 100% as possible. And out of that 40 rupees are a range which is actually little premium range. So and we have, we have in few months we were facing some capacity issue also in that range. So we are trying our best to make all range available across all zones.
Himanshu Upadhyay
Okay. And on the link side the intensity competition remains the product price and hence the 5% type of VGRO would that.
Narayan Kumar Dujari
Be right as a thing remains. And we have got like it happened in the past also we have new entrant coming in the market and they create some disturbance for a few months and then it is back to normal for us. So we don’t react on quarter, on quarter basis we take a long term strategy and we don’t react to their actions on one to one basis. So these are challenges for our industry which we are facing for decades. So we have always, we have new entrants and they keep on disturbing the business for few months.
Himanshu Upadhyay
And one more thing on the Delhi brands, what is the outlook from here and what would be the top three product categories where we are focusing most of our energy on or the market has really captured or with that product we have been able to capture some imagination. What would be the top three products we are focusing on?
Narayan Kumar Dujari
Delhi Delhi brand has not performed as per our expectation. We were very, you know, aggressive and we were very positive on the growth front of a Dalai brand. So but it is something which we are still, we are banking on and top product category for them will be for the, for the delay will be Delhi will be calculators, scissors and desktop accessories I think. But they are you know beyond these three or maybe Four category. They, their range is across all the stationary, you know, requirements. Their, their presence is instead of volume itself. Basically the portfolio is very large.
So that side that, that is also one of the reason that it is not possible to target the category that aggressively because the range is quite large.
Himanshu Upadhyay
No, but let’s see these three particular products where some amount of traction is there. The market size for these three categories itself is. Can be pretty high.
Narayan Kumar Dujari
Yeah.
Himanshu Upadhyay
Should I continue?
Narayan Kumar Dujari
Yeah, please, yeah, sorry.
Himanshu Upadhyay
Should we expect these three categories to reach around a 50,75 crore in next three to four years or you think we still want to focus on multiple categories at the moment?
Narayan Kumar Dujari
What happened in between? We have changed our strategy for Dely like for calculators. We found that the calculators are a very good business for the brand. So learning from the experience what we did, the competition was pretty high in that particular range. So we have launched calculators in Link brand at lower range. So basically Dely is not only the growth business for us, it is a learning experience for us. Like calculator category was something which we were not aware and like it was a big learning for us and it helped us to launch a link calculator gaining on the experience of sales experience of the DAI calculator.
So it may not be a 75 crore brand maybe in three years but definitely it can help us to create new categories in Link brand and generate the business to that extent. Dalai brand may not be able to generate 75 crore, I’m not sure because right now the figure is I think very less and the base is. Base is too small to make it take it to 75 crore which our initial target was that only. But what we did that the overall business for Link will come from those categories may not be in the live brand but from our own brand in that, that product category.
Himanshu Upadhyay
And are we getting them manufactured from Dalai or we are getting let’s say calculators manufactured.
Narayan Kumar Dujari
We are trying to locate partners in India and if not India maybe, maybe in few cases abroad also. But not delay because rely cost is high.
Himanshu Upadhyay
And the growth what we saw in link yoy do you expect that growth to continue means around 9%, 10% writing instruments.
Narayan Kumar Dujari
I think whatever we have seen in quarter one, quarter two, the initial momentum, what we have seen is much better going forward. We should be doing much better than quarter one for the rest of the quarter for FY26.
Himanshu Upadhyay
Okay, thank you from my side.
Narayan Kumar Dujari
Thank you. Thank you Mansh.
operator
Thank you. A reminder to participants, if you wish to ask a question, you may press star and one on your touchstone phone. Thank you very much. That was the last question in the queue. As there are no further question, I would now like to hand over the conference over to Mr. Duchari for closing comments. Thank you. And over to you.
Narayan Kumar Dujari
Thank you everyone for joining the call. We’ll get back to one few points which we could not have the data right now. Thank you everyone for joining the call. Thanks a lot. Thanks a lot. Thanks everybody and have a great week.
operator
Thank you. On behalf of SKP Securities Limited concludes this conference. Thank you for joining us. And you may now disconnect your lines.