Linc Ltd: Writing the future of Bharat

Notes from recently concluded Investor/Analyst meeting on the strategic JV with Mitsubishi Pencil, Japan:

• Going in the untapped market with this JV of price point 20-50 rupees, where the market size is INR 500 crores (domestic market).

• The company already has 10-15% market share in this 500 crore market but is looking to increase it further as the opportunity size is huge because the market is growing rapidly as customers are moving up in the value chain.

• Production cost will reduce with this JV.

• The whole chain is like: JV will manufacture the pens, then it will sell them to LINC, which LINC will further sell them to customers.

JV (Mitsubishi) —> LINC —> Target Market

• Mitsubishi has a range of ball pens and roller pens.
• Manufacturing will start in July 25.
• Total INR 20 crores of investment in a 50:50 ratio. However, investment in JV may increase further.
• No investment in factory or land acquisition; entire investment in molds and assembly workings.
• JV will have similar margins as of LINC (need further clarification on the same).
• Same range of products in price points of 20-50 rupees will provide more offerings for customers, hence market share gain for LINC.
• Mitsubishi is not present in this price range (20-80 or 120, not 100% sure) internationally for which JV is established, hence positive for the export market.
  (But it will take a little longer, although the opportunity size is huge.)
  Expecting minimum asset turns of 8-10 times
• Potential to do sales of 200 Crs (20 Crs*10 times)
• Targeting the South Asian market first.