Prabhudas Lilladher Forecasts Rs 413 Target Price for Flair Writing Industries

Flair Writing Industries (FLAIR IN) Research Report

Initiation Coverage We initiate coverage on Flair Writing Industries (FLAIR IN) with a 'BUY' rating and a Target Price (TP) of Rs413. Our valuation is based on 23x FY28E EPS, representing a 54% discount to DOMS IN.

Competitive Edge FLAIR IN enjoys a competitive edge over its peers due to several factors:

• Superior brand recall
• Cost competitiveness arising from captive manufacturing capabilities of pens, steel bottles, and creatives
• Diversification advantage beyond the core stationery segment into lifestyle categories like steel bottles and houseware
• Unparalleled distribution reach with over 330,000+ retail touch points

Market Share and Expansion Plan As one of the largest pen brands in India, FLAIR IN holds an indicative domestic market share of approximately 16% as of FY25. The company's ongoing expansion plan at Valsad for writing instruments and stationery, entailing a capex of Rs800-900mn, is expected to drive revenue, EBITDA, and PAT CAGR of 13%/15%/16% over FY26E-28E.

Read also: SMR Jewels IPO Successfully Lists with Institutional Support

Valuation and Outlook With reasonable valuations (stock trades at 20.6x/17.6x our FY27E/FY28E EPS), negligible debt on the balance sheet (D/E ratio of 0.03x in FY25), and expected improvement in the cash conversion cycle, we initiate coverage on FLAIR IN with a 'BUY' rating and a Target Price of Rs413.