Linc Ltd (NSE: LINC) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Deepak Jalan — Chairman and Managing Director
Narayan Dujari — Chief Financial Officer
Rohit Deepak Jalan — Whole-Time Director
Unidentified Speaker
Analysts:
Navin Agarwal — Analyst
Rushabh Shah — Analyst
Chirag Pachisia — Analyst
Unidentified Participant
Rakesh Wadhwani — Analyst
Himanshu Upadhyay — Analyst
Saurabh Shroff — Analyst
Jaspreet Arora — Analyst
Priyankar Sarkar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Linc Limited’s Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the management’s opening remarks. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Navin Agarwal, Head, Institutional Equities and SKP Securities Limited. Thank you, and over to Mr Agarwal.
Navin Agarwal — Analyst
Thank you. Good day, ladies and gentlemen. I’m pleased to welcome you to Linc Limited’s Q3 FY ’25 results con-call. We have with us Mr Deepak Jalan, Managing Director; Mr Alok Jalan, Whole Tim Director; Mr Rohit Deepak Jalan, Whole-Time Director; Mr N.K. Dujari, Director of Finance and CFO; and Mr Sanjeep from Utrus Advisors LLP, the company’s IR advisor. We’ll have the opening remarks from Mr Jalan followed by a Q&A session. Thank you, and over to you.
Deepak Jalan — Chairman and Managing Director
Thank you, Naveen, and good afternoon to everyone and thank you for joining us. I’m pleased to share our Q3 FY ’25 performance, highlighting our resilience, strong fundamentals and continued progress towards expanding our portfolio and strengthening our market position. Despite short-term challenges, we remain on-track with our growth strategy and innovation-led expansion into new product categories.
In Q3 FY ’25, our operating income stood at INR12,216 lakhs, a slight 1.4% dip compared to Q3 FY ’24. While our performance in this financial year and more particularly in the Q3 FY ’25 has been moderate, this period has been one of strategic investments and groundwork for future growth. We have been actively engaged in seeding multiple initiatives that will drive long-term value-creation. These include new product developments and introductions, expansion into expansion into adjacent categories, strengthening our export and e-com presence and operationalizing key joint-ventures.
The Linc segment remains a key pillar of our business and while it saw a 3.4% Y-o-Y, this was primarily due to some legacy products maturing. However, we have already taken proactive measures to refresh and expand our product lineup, ensuring sustained momentum in the coming quarters. Pentonics, recent launches witness a mixed response as higher-value products typically require longer adoption cycles. We remain confident that these products will gain stronger traction in the coming quarters despite the revenue softness, we have maintained healthy profitability.
Gross profit rose by 2.9% year-on-year to 4,017 lakhs with gross margin expanding to 32.9% from 31.5% last year. Operating EBITDA stood at 1,461 lakhs, maintaining a healthy 12% margin, while PAT stood at 872 lakhs with a strong 7.1% margin a key part of our long-term strategy is the successful execution of our joint-ventures, which are progressing as planned.
The JV with Maurice Korea is advancing well and we anticipate benefits to start accruing from quarter two or quarter three of next financial year once our new manufacturing facility becomes operational, which is expected within the same timeframe in Kolkata. The joint-venture with Mitsubishi remains on-schedule and as previously communicated, commercial production is expected to commence from July next financial year.
The Indian stationery and art materials market is estimated at INR38,000 crores with the Writing Instruments segment accounting for about INR13,000 crores, while our current TAM is less than INR9,000 crore rupees, we are actively expanding into adjacent categories such as markers, mechanical pencils, calculators, etc, positioning Linc for long-term multi-segment growth. We have an exciting product roadmap ahead. Markers and mechanical pencils are set for launch in-quarter one FY ’26, further strengthening our presence in writing instruments.
Linc calculators launched in-quarter four cater to the affordable segment, expanding our customer reach. With India’s stationery and art materials market projected to grow at 13% CAGR, reaching INR72,000 crores by FY ’28, we see tremendous expansion opportunities. Key growth drivers include rising literacy rates, increasing purchasing power and premiumization trends. Additionally, global per-capita stationary consumption is nearly nine times that of India, presenting significant untapped potential., with a robust export business, strong traction in e-com and an expanding product portfolio, Linc is well-positioned for sustained long-term growth. We remain optimistic about the future and committed to delivering innovation, operational excellence and long-term value for all stakeholders.
Thank you. Over to Mr Dujari.
Narayan Dujari — Chief Financial Officer
Thank you, Mr Jalan. Good afternoon, everyone. I appreciate you joining us for the FY ’25 quarter three financial review. For quarter three FY ’25, our operating revenue was INR12,216 lakhs, a Y-o-Y decrease by 1.4% from INR12,396 lakhs in-quarter three FY ’24. Operating EBITDA experienced growth increasing by 4.9% year-over-year to 1,461 lakhs with an operating EBITDA margin of 12%. PAT also improved by 15.3% year-on-year, reaching 872 lakhs and achieving a PAT margin of 7.1%.
Operational efficiency remains strong, generating a cash-flow of INR4,200 lakhs from operations for the nine-month period. Further, our net-debt was negative at INR2149 lakhs, underscoring our focus on maintaining a resilient balance sheet. Looking-forward, we are confident in achieving our projected medium-term growth — revenue growth guidance driven by well-aligned strategic initiatives and robust business fundamentals.
Now I request to open the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Each participant is requested to limit himself or herself to a maximum of two questions. Time permitting, we shall revert for any further questions that you may have, which remain unanswered. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Participants, you may press RN1 to ask a question the first question is from the line of Rushab Shah from PMS. Please go-ahead.
Rushabh Shah
Hi, thanks for the opportunity. Sir, my question is, one of the calls, you mentioned that you want to become the full-year of investment. So your audience not clear.
Operator
Can you speak a little louder, please?
Rushabh Shah
Yeah. In one of the calls, you mentioned that you want to become Colgate of 10 Industry. I’m with you, sir, great aspiration. That is a journey will be very difficult. So what steps are we taking to go towards that aspiration? What challenges do we face on this road?
Deepak Jalan
So thank you for your question, which is quite relevant. You know so you know, we realized definitely when I mentioned this, you know, I meant that our distribution are expanding to the non-stationery outlets, so reaching the you know general stores and FMCG stores and make our products available, you know, at those outlets. However, we realize that you know the ballpen category is very competitive and the cost of reaching those outlets was really quite high. So, we tweaked our strategy of rather serving more you know deeply you know our existing stationery outlets and expanding our expanding into other adjacent categories like we were just focused on pens, but just being in the pens category could be challenging for growth. So we thought that it was wise that we must build a stationary portfolio rather than just being in the pen but definitely the greater focus is on the — still on the writing instruments and you know, we like to tread this path more cautiously and profitably.
Rushabh Shah
Second part of the question is what challenges you think in this space in this journey.
Deepak Jalan
So as I mentioned that the challenge — see, it’s a low entry barrier category, the pen. So there is an intense competition. And so it would be difficult to grow at our desired pace. This is what we realized that just keeping our focus on pens could be not really worthwhile. So that’s what I mentioned that we thought that we must get into other categories. Yeah. And as I mentioned that cost of reaching those two non-stationery outlets is also very expensive. It does not mean that we have not — we are not trying to cater to them. We are also catering to them, but that aggression — aggressive plan is a little bit on-hold.
Rushabh Shah
Okay. My second question is how is the market shaping for us, sir? Could you please share your view how — hello, again, we are in your audio. Yeah. So how has the export market shaping for us, sir? Could you please share your views on how big it could be and where do we stand-in the whole export market?
Deepak Jalan
Okay. So Rohit is here who looks after exports and he’ll give a brief on our export initiatives.
Rohit Deepak Jalan
Hi, good afternoon, Rohit here. So on the exports front, we are quite positive. We are on a double-digit growth and we expected to grow this in the coming quarters. We are — our export business is quite distributed across the globe. So if you look at Latin-America, North-America, Eastern Europe, Africa and even Asia-Pacific, so some of our strong regions are Asia-Pacific and Latin-America. Lately even USA, Mexico that we’ve entered through a national distributor has been showing positive and good results. So we opened a couple of new markets as well in the last quarter, that’s Morocco and Indonesia and Turkey. So exports look quite positive and yeah.
Rushabh Shah
I will get back-in the queue. Thank you.
Operator
Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Chirag from SKP Securities. Please go-ahead.
Chirag Pachisia
Good evening. So in a previous call, you mentioned that for FY ’26, the top-line could become like a INR600 crores, but I also remember last quarter, we left it open-ended so do we still have it open-ended or have you put a number to it?
Rohit Deepak Jalan
Well, you know, looking at the numbers of the first-nine months of this financial year, you know, the growth looks very moderate for the current financial year. Nevertheless, for FY ’26, we are still you know expecting to meet what you mentioned. You know, based on the seeding activities, which I mentioned that we have done in recent quarters. So we have a good lineup of the products which we have recently launched plus new products you know in pipeline and these benefits from the joint-ventures. So yes, so that looks more than achievable, I would say.
Chirag Pachisia
Okay. And those will be the growth drivers, nothing like — nothing else other than that, right. Sorry, whatever growth drivers that you mentioned, nothing so-far.
Rohit Deepak Jalan
So-far, yeah. So-far these are the growth drivers, yes.
Chirag Pachisia
And just confirming every production will start in July ’25, right?
Rohit Deepak Jalan
Yeah. So — but Subishi, yes. The commercial production is going to start from July ’25.
Chirag Pachisia
And the number can be seen from Q2 FY ’25.
Rohit Deepak Jalan
So we — we should start getting benefit of the — so we see JV from the second-quarter itself.
Chirag Pachisia
Okay. Thank you so much.
Rohit Deepak Jalan
Yeah, okay. Thank you.
Operator
Thank you. Next question is from the line of Zaki Nasir, Individual Investor. Please go-ahead.
Unidentified Participant
Sir, good afternoon. And I think the results have been slightly muted and slight negative growth since last quarter, sir. Do you think the general retail scenario has been slightly dragged is my question number-one, sir. Number two is, you put out a very important statistic saying that India is about 10% of the per-capita world consumption. So would — how are your thoughts on this and how does it vary between the developed countries and the developing countries, sir?
Deepak Jalan
So, first of all, sorry to disappoint you with the numbers. Yeah, you know the revenues, but you know the dip is really not very — I mean, it’s not that we are really worried about that. Of course, we are not happy about this dip and which would also be due to some stock adjustments at the secondary level, but yes, so I would not really assign it to you know, a general retail sentiment. I think we have, there is a good potential of writing instruments and stationery, so yeah, it’s just that we’ve had some bad overs. Yes, that’s about it. So-far the per-capita consumption I mentioned, mentioned globally you know the stationary consumption is the average stationary consumption is worth $3 in India, whereas the global consumption is about $26 a year per-capita consumption. And it is — it is as high as $100 per-capita in developed countries like the US or Europe.
Unidentified Participant
So that’s my — that was what I’m and if I may add another small thing, sir. I think three, four quarters back, we were looking at expanding through the non-station outlet because we have a large footprint in terms of retail. I think it’s a very important statement you gave about cost of reaching. So your thoughts on this point, sir.
Deepak Jalan
So, we are — see, as I have clarified in the past in the previous calls that we reached up to 250,000 outlets, out of which, you know about almost 150,000 outlets were non-stationery outlets. And we made our first sale to them. But the value of each transaction was very low and our distributors were not really very eager to service those outlets. And so they — over the period, they become — they became inactive. So we realize that, yeah, we should not blindly keep on increasing the number of outlets, which are not being serviced you know after once they are enrolled. But even though the cost is high, you know, cost of reach is high for such outlets, but we are talking to our distributors on a regular basis that gradually we can make those outlets active because the number is still very large. So we don’t want to really ignore those outlets, but we are trying to find ways how we can service those outlets, keeping our costs low. So that’s the strategy.
Unidentified Participant
Thank you, sir and best wishes for the company. Thank you. Yeah.
Deepak Jalan
Thank you so much.
Operator
Thank you. Next question is from the line of Rakesh from Nine Diverse Capital. Please go-ahead.
Rakesh Wadhwani
Hi, hi. Thank you for the opportunity. Am I audible?
Deepak Jalan
Yeah, sure. Yes.
Rakesh Wadhwani
Yeah. Hi, sir. Thank you for the opportunity. Sir, first question with respect to gross margin. When I look at our gross margin — when I look at the average realization journey of linked when it has grown very well, be it and, it has grown to INR6 per unit. But gross margin is not improving. And when I look at other players in the industry, they are doing higher gross margin and their realization are also around us like 5.78. Any reason for that?
Deepak Jalan
So if you compare to our peers, definitely the gross margin, yeah, we still have room in increasing our gross margins. But one significant difference is that, you know the peers which you are mentioning, it’s mostly their in-house production, whereas in our case, it is a kind of a 50-50 model. So 50% of our production is in-house while 50% is outsourced. So there would be some, you know some you can understand some difference between their margins and our margin.
Rakesh Wadhwani
That is the only reason or there are other reason also with respect to the — like the ink also the tip of the pen, everything is manufactured, other players are everything manufactured in-house. Can that be the reason?
Deepak Jalan
So not all our peers are producing the tips in-house. So some of them are producing and so — and there is not much delta in the tip, you know production versus outsourcing. So yeah, there would be some — some difference, but not very significant. And ink — ink generally ink is, you know, outsourced by all the pen companies.
Rakesh Wadhwani
Okay. Okay. And sir, second question with respect to the others, like you have mentioned in the opening remarks that we have also realized that pen segment could grow at higher-rate, we have to go into other adjacent categories like, others to grow it higher because the same salesperson is growing in order and he can — by doing more products, he can bring more sales. So just wanted to know what we are doing in that segment to increase our product portfolio or the sales.
Deepak Jalan
Currently, what is the share of other products in our total sales and what we are doing with this other segment? So currently, the contribution of non-pen would be less than 10%. So which is quite, you know lopsided I would say towards the core category. So I think ideally, you know, we are looking at least in the medium-term, 70 30 kind of a ratio. So we are — there are several products under development. And as I mentioned in my opening remarks that we have recently launched a link calculator. Yeah. So that is something — and apart from that, of course there are several other…
Operator
Hello participants, please stay connected. The line for the management drop ladies and gentlemen, please stay connected while we rejoin the management back to the call. Ladies and gentlemen, please stay connected while we rejoin the back to the call. Thank you for your patience. We have the line for the management reconnected. Rakesh, kindly proceed.
Rakesh Wadhwani
So I was answering the call. MR. Jalan was answering.
Deepak Jalan
Yeah. Right, yeah. So as I mentioned that, yeah, of course, we are looking at several product categories in the adjacent space and linked calculators is one of them. And even in the — even in the writing instruments, we were not present in some of the subcategories like the markers and mechanical pencil, which we have, you know, either going to launch very soon or some of them have already been launched. So ideally, we like to have the contribution to increase from less than 10% to 30% from the non-pen category.
Rakesh Wadhwani
Okay. And sir, what will be the margin profile in these products like, it will be equivalent to Penn virgins or it will be lesser or higher.
Deepak Jalan
Honestly you know it will be little lower because these non stationary and non-pen categories are mostly outsourced okay.
Rakesh Wadhwani
Okay. Sir, if you allow me, I have one more question. Can I go-ahead?
Deepak Jalan
Yeah, please do. Please do.
Rakesh Wadhwani
Yeah. Thanks, sir. Sir, sir, recently, we have found — we have witnessed in the market in the channel sector, other players have entered into the market, which went into category earlier and they have entered into a lesser price range also like a INR5 price range, which was — which was not prevalent after sold, but during COVID — after COVID has come back. And other players which are not listed have also come into INR5 range and the competition has intensified. Your thoughts on that?
Deepak Jalan
Yeah. Actually, you see, after we launched Pentonic, the industry actually moved towards the INR10 and above pens. But as you rightly mentioned that some of our peers they have they found the below INR10 rupee price segment as low-hanging you know fruits. So they went into that price segment quite aggressively even though, even though the segment is less profitable so while you know our endeavour is to develop you know products which are more value-added. Yeah, you know, we have definitely, you know, refocused on the legacy products under Linc brand, which are mostly below INR10 price point and we are reviewing our portfolio of the below INR10 price point without any new investment and trying to reintroduce some of them which are profitable for us.
Rakesh Wadhwani
So just to understand just to clarify the point. We are — with respect to the link and brand, we are working on INR5 price point, correct understanding? Is that understanding correct?
Deepak Jalan
Right. Right. Absolutely. So we have actually three new products — three products which we had in the past not really — we had actually discontinued, but we did some cost engineering and then reintroduced the three products at that price point without any new investment.
Rakesh Wadhwani
Okay. Okay. And sir, currently, what is the share of the — sure, sure, thank you. Thank you.
Operator
Thank you. I request all the participants can be restrict to two questions per participant. Next question is from the line of Himanshu from Baljarok PMS. Please go-ahead.
Himanshu Upadhyay
Yeah, hi. Good afternoon, sir. Good morning. Am I audible?
Deepak Jalan
Yeah, yeah. Yeah.
Himanshu Upadhyay
Yeah. So this question was related to trying to expand beyond the pence category, okay. So we started experimenting with daily products also, okay, bringing them from China and trying to sell. What were our learnings from that whole exercise and how are we fine-tuning the basket of products we want to bring with the Delhi brand and focus to sell-in the country? Because link calculators, there were initially Delhi calculators also we were trying to sell. So some thoughts on what type of categories?
Deepak Jalan
Yeah, yeah. Yeah, definitely a pertinent point. You know so Delhi, for example, Delhi calculators, we are pitching against. So Cassio is number-one brand in calculators, as you know, and we are pitching daily calculators against Casio, so which means they are slightly on the price range of Casio. While linked calculators, we are targeting the lower segment, which could not be targeted by a Delhi brand. So these linked calculators which are produced in India, they are targeted at lower-end brands like Orpet or Origo. So it’s just like Linc and Uniball or Pentonic and Uniball, like Uniball is at the higher price point while Linc and Pentonic they are in the mass price segment. Similarly, link calculators are at the mass price segment while Delhi is at the higher price point.
Himanshu Upadhyay
And also what were our learnings from that Delhi exercise and how do you fine-tune the basket of products?
Deepak Jalan
We can — yeah, sorry. So we continue to distribute deli and they have a huge portfolio and so there is a learning — we are learning quite diverse categories within the stationery. And so some of the popular products as I — as I’ve mentioned in the past, that calculators is one of them, then there are Caesars, then there are some desk items and there are, you know glue sticks and so on. There is a large category. So yes, we are still trying to expand our distribution of deli products. And more particularly, we are getting good feedback in the e-commerce for daily products because we are able to list daily products in the e-com and able to you know present our range to our potential customers.
Himanshu Upadhyay
And one more question on this only. Any specific view on as a category of products because the market-leader has a dominant position and nobody is there in — besides that leader in that particular category.
Deepak Jalan
You are — yeah, yeah. You know even yesterday, last evening we were discussing about this category. And as you rightly mentioned, there is only one manufacturer in India, you know who has kind of a monopoly. Yeah, so definitely it would not be easy for any or at least for link to really get into that category in the immediate future. And so we are — frankly, we are not looking at that right now. We — I don’t know what our other — what our peers are thinking about that.
Himanshu Upadhyay
But the question was with regard to daily product profile, do they have that category and can we bring and sell it in India? Like many of the categories where we are fighting with Delhi, there are large number of players and highly intense competition is there. So that was the question what was there?
Deepak Jalan
Yeah, we all — we have staplers in Delhi brand and we have — we are distributing also, but definitely the volumes are much, much smaller than the leading brand. So that’s why I — I didn’t really mention about Plus, but you are absolutely right that there is a potential in this category and we believe that we would be able to leverage that through our e-com business because in the general trade, it’s really very competitive. So definitely, you know, after importing, you know, the price is not as competitive as the leading brand here. But we have some products which are more value-added and we are getting some traction here in the staplers also. But I’m sure it will take some time to really build-on that category.
Himanshu Upadhyay
Thanks. I have few queries. I’ll join back-in queue. Thank you.
Deepak Jalan
Sure, yeah.
Operator
Thank you. Next question is from the line of Saurabh from QRC Investment Advisors. Please go-ahead.
Saurabh Shroff
Hi, sir, good evening. I had two questions I wanted to ask. One is related to the volumes. I’ve seen that the volumes have fallen from Q2 to Q3 by almost 5 odd tons and especially a 30% drop-in link. But on this — at the same time, the realizations of linked have gone up from INR4.4 to INR6.5. So what is the reason behind that and what is driving the realizations to grow so much and the volumes to follow.
Deepak Jalan
So you know the volumes — the fall — the reason of a falling volume in link segment is mainly, you know, some of our legacy products, which we’ve been selling for last more than 20 years. So there is some redunds you know like you can Call-IT a you know like the majority of the life-cycle, you know majority. So that is the reason of fall in the link segment. But nevertheless, as I mentioned that we’ve recently launched three new products or three products we have relaunched in link in the price segment of INR5 to INR6 rupees. So we are likely to make-up that loss in the link segment. And the reason of improved ASP is also because of higher exports. So the contribution of exports has increased and as you know that our average selling price as well as margins in exports are better than the domestics.
Saurabh Shroff
So how much better the realizations in exports than in the domestic sector?
Deepak Jalan
And in the range of 5% to 10%.
Saurabh Shroff
That’s the — and another question is, it — so the realization is — now the average realization for the last nine months is lesser than the company average realizations. So doesn’t mean that the link realizations will eventually come down or will Pentonic be in the similar range to the average company realizations?
Deepak Jalan
So the Pentonic average realization should increase because you know, as I mentioned in my opening remarks that we’ve launched several new products in Pentonic portfolio at price range of, 20 30 40 and they are taking a little longer time, you know to get the desired traction. So we are heading for a better realization going-forward in the Penton portfolio.
Saurabh Shroff
Okay, got it. Thank you.
Deepak Jalan
Thank you. Yeah.
Operator
Thank you. Next question is from the line of Arora from Aequintus PMS. Please go-ahead.
Jaspreet Arora
Yeah. Hi, good evening, sir. I wanted to check on the volume growth that overall we’ve done for the quarter, which is 3Q on a Y-o-Y basis and for nine months?
Unidentified Speaker
Just let me have the volumes here.
Jaspreet Arora
And I see absolute volume of 1,367 lakhs, but the Y-o-Y number is not there.
Unidentified Speaker
Y-o-Y number is not there. In terms of the quarter or the…
Jaspreet Arora
Both for the quarter, which is the 3rd-quarter and nine months on a Y-o-Y basis.
Unidentified Speaker
Yeah, yeah. 5 to 37% versus 5 to 16 nine months.
Jaspreet Arora
Okay. And the 3rd-quarter last year?
Unidentified Speaker
Yeah, 3rd-quarter last year was 173737.
Jaspreet Arora
Okay. Okay. So maybe that was a question that was being asked earlier. So we have dropped from 1737 to 1367.
Unidentified Speaker
Yeah. Yeah, right. Yeah.
Jaspreet Arora
That’s like a steep fall. What — you mentioned — I think you mentioned some reasons attached to this, but is this the reason attributed for such a steep fall? You had to withdraw products, I think, is that what I heard?
Deepak Jalan
No, it’s not withdrawal, it’s just that, as I mentioned that some of the legacy products there the life-cycle matur — majority reasons. So that was the main reason. And of course, some stock adjustments at the secondary level could be the other reason. So these are the main reasons. And as I mentioned that in this coming quarter, we are likely to neutralize this degrowth because we have introduced some products in the INR5, INR6 rupees reintroduce some of some products in Linc portfolio.
Jaspreet Arora
Understood. Got it. And just to understand this the three brands, so you you’ve mentioned the INR6 plus as the average gross realization. How does it stack-up across the three brands, Linc and Pantonic, the same INR6 rupees?
Deepak Jalan
Will be around INR40 rupees. Sorry, can you come closer to the would be around 40 yeah. The link would be 4.6 for the nine months. 4.6 for the nine months and would be INR6.
Jaspreet Arora
So yeah. Okay, okay. And Uni boil is obviously the — which is less than the volume-wise it’s the lowest, but bulk of, yeah. And the other two are the highest. So Linc is the highest and which is at 4.6 followed by. Yeah. That’s how the — I was just — so one question was around this growth beyond pens and I think you covered it, you know, by saying you trying to look at a lot of other product categories within the stationery market. But broadly within pens, I mean, just would it be right to say that new product introductions and price and the inflation and all of that would be the real growth drivers because it seems like this industry doesn’t have any volume growth left at the industry level. So maybe a little bit of market-share gains, if at all. But per se, the pens market doesn’t seem to be growing. In fact, even it — what’s your sense in the last — and my sense is whatever will happen in the last three years — sorry, the next three years, we’ll have to keep in mind what has happened in the last three years because the next years cannot be radically different from what has happened in the last three years. So just your sense on the — on the industry growth outlook of pens over the next three years.
Deepak Jalan
So well, you know, of course, the market estimates are that EA the category growth is — of course, it is slightly stunted, but it is still more than 5%, so could be around 5% to 6%. But definitely the growth will come mainly from the premiumization and — and of course, we are also looking at gaining market-share from the competition. So, yes, in the domestic market, yeah, so these are the growth drivers we are looking at?
Operator
Thank you. Just, may I request you to come back for a follow-up question.
Jaspreet Arora
Okay. Thank you. Thank you.
Deepak Jalan
Thank you. Yeah.
Operator
Thank you. Next follow-up question is from the line of Rushab Shah from PMS. Please go-ahead.
Rushabh Shah
Yeah, hi. Thanks for the opportunity.
Deepak Jalan
Hi, hi.
Operator
Sir, are all the line for the participants from? Yeah. Yeah. We move on to the next question. Next question is from the line of Priyankar Sarkar from Square 64 Capital. Please go-ahead.
Priyankar Sarkar
Good afternoon, sir. Sir, a quick question again pertaining back to the INR5 price point by competition. So do you think this is temporary in nature that the competitors are undercutting of price?
Deepak Jalan
Well, I don’t like to make a remark on that you know so it may be temporary for a you know not very long period, but it can be temporary for you know a medium-term because we feel that the INR5 segment is a shrinking segment. So — and that’s the reason that we — our focus was more on the INR10 and above price segment. So as I mentioned that, yeah, since the — for the new entrant, it is a low-hanging fruit. So yeah, in a way, you can say that, but we are still you know, as I mentioned that we have — we are reviewing our INR5, INR6 portfolio so that we can counter you know this competition.
Priyankar Sarkar
Got it. So the other follow-up question is the new areas where we are entering, are we cutting — undercutting price in the competition — in the areas where the other competitors are present for us, for example, a calculator, are we underpricing in order to gain market-share over there?
Deepak Jalan
Not really, not really. So we are keeping our decent margins and so we are not really much on the price cutting, but maybe in some categories, temporarily we may have to have some aggressive pricing or promotion.
Priyankar Sarkar
Okay. Sir, last question from my hand. What our non-pen category are we reaching all the outlets that the pen category is present in for large part of it rather?
Deepak Jalan
Yeah, yeah. Yes. So the same salesman is carrying those non-pen categories. And so we are pitching to all the outlets which we are reaching. But you know, honestly, it takes time to introduce a new product, which is a non-Pen. So it’s taking a little longer time, but yeah, so — but we have to leverage the same outlets and the same network.
Priyankar Sarkar
So sir, as of now, what would be the ratio? How much has the non-Pen reached out-of-the entire network any ballpark figure?
Deepak Jalan
I think about what 2015,000, 20,000 outlets okay so ample room for that to grow.
Priyankar Sarkar
Yeah, yeah. Okay, sir. Thank you and wish you all the best.
Deepak Jalan
Yeah. Thank you, yeah.
Operator
Thank you. A reminder to all the participants, you may press to ask a question. Next follow-up question is from the line of Rushab Shah from PMS. Please go-ahead.
Rushabh Shah
Yeah, hi. Sorry, the line is.
Deepak Jalan
Yeah, yeah.
Rushabh Shah
So we entered 30 and 40 price points. So how large is the market at these price points? Can these be a 5 million pieces early type of price points for us?
Deepak Jalan
I couldn’t get your second part of it, but…
Rushabh Shah
I’ll repeat the question. We entered — we entered 30 and 40 price points, how large — how large is the market at these price point? And can these be 5 million pieces yearly sales at — of price points for us?
Deepak Jalan
For us so it’s not difficult to reach a 5 million annual volume I mean it’s within our projections as — but so-far INR30 to INR40 price point currently is not very big, but you know as I’ve mentioned even in our previous calls that you know there is a trend of premiumization. So you know Pentonic you know like helped increase the price point from INR5 to INR10 rupees yeah. And similarly, we are now trying to upgrade our customers from 10 to INR20 or 10 to 30. So that is the endeavor. And we have observed that if the same customer will come to buy a INR5 or INR10 pen and if he — if he is presented with a INR30 or INR40 pen, if he likes, you know, he does not hesitate to buy that product. So we need to expand this price point and that is our endeavor.
Rushabh Shah
Okay. So my next. My next question is, your main thing in our business is distribution. So what are we doing on those lines to make it better and penetrate into more Tier-2, Tier-3 cities? Okay.
Deepak Jalan
So, see, our presence is actually all over and yes, the best way to increase distribution is appoint a new distributors and reach more outlets. So that is an ongoing process and we continue to increase the number of stock is and number of retailers. So that is an ongoing process.
Rushabh Shah
So just a small follow-up on this one. How many have you added in the past two to two, three years?
Deepak Jalan
So just to refresh, in case you know, you didn’t hear my last conversation. So we — in the last three years, rather last four years, we reached a level of about 250,000 outlets, including the non-stationery outlets. But as I explained that you know out of which about 150,000 outlets were non-stationery outlets, which were — the transaction value was very small. So those outlets became inactive over the period because the distributors were not very keen to supply to those outlets because of the low transaction value. So currently we are — yeah, the active outlets are about 100,000 outlets. And so as such, there has been no — no increase if you say lately, it’s just that we are trying to make these 250,000 outlets which are enrolled, trying to make you know, some of them active like every month. So that is the process we are going on.
Rushabh Shah
Sure, sir. Thank you. I’ll get back-in the queue.
Operator
Thank you very much. Ladies and gentlemen, that was the last question for the afternoon. I would now like to hand the conference over to Mr Jalan for closing remarks.
Deepak Jalan
Yeah. Thank you. And I will ask Mr to you know, make a closing remarks.
Unidentified Speaker
Thanks a lot, everybody really appreciate your time this afternoon and really appreciate the participation. Thanks from the management side. Have a good day. Thank you.
Operator
Thank you very much. On behalf of SKB Securities Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen, and you may now disconnect your lines.