Flair Writing Industries Ltd Management Discussions

Economic Environment

Global Economic Overview

Global economic activity remained resilient in CY 2025 despite persistent policy uncertainty, geopolitical tensions and evolving trade dynamics, with growth estimated at around 3.5%. Economic momentum was driven by strong demand across the services sector, relatively stable labour markets in major economies and continued investments in technology and digital infrastructure. Global trade remained stable despite headwinds, supported by supply chain diversification and strategic redirection of exports.

Growth remained uneven across regions. Advanced economies recorded slower expansion of around 1.9%, as elevated interest rates in the United States and the Euro Area weigh on economic activity. In contrast, emerging markets expanded at a faster pace of approximately 4.5%, contributing a larger share to global growth, supported by resilient domestic demand and infrastructure-led expansion.

Investment activity remained below historical averages, as elevated borrowing costs and cautious business sentiment constrained capital expenditure. Trade policies, including tariff revisions and export controls across key sectors, continued to influence supply chains and investment decisions, while front- loaded shipments ahead of anticipated tariff changes provided temporary support to global trade flows.

Outlook

The global economic outlook remains moderate, with growth projected at around 3.0% in CY 2026 and 3.4% in CY 2027, indicating a gradual moderation from recent levels. Global headline inflation is expected to remain elevated in the near term at around 4.4% in CY 2026, before easing to 3.7% in CY 2027 as supply-side pressures stabilise.

The outlook continues to be shaped by rising geopolitical uncertainties, particularly the escalation of conflict in West Asia in early 2026. The disruption has increased volatility in commodity markets, especially energy, while influencing inflation expectations and financial conditions. Prolonged disruptions could result in sustained pressure on energy prices, tighter financial conditions and weaker global demand.

Growth across advanced economies is expected to remain moderate, while emerging and developing economies are projected to grow at around 3.8% in CY 2026 and 4.5% in CY 2027, continuing to drive global growth. However, these economies remain vulnerable to external shocks, including capital flow volatility and currency headwinds.

Medium-term prospects are supported by continued investments in technology, digital infrastructure and supply chain diversification. Nevertheless, risks remain tilted to the downside, due to geopolitical tensions, commodity price volatility, elevated public debt levels and financial market instability.

The trajectory of the global economy will depend on the ability of countries to manage geopolitical risks, maintain macroeconomic stability and sustain investment momentum in an evolving global environment.

Indian Economic Overview

The Indian economy remained resilient in FY2025-26, with real GDP growth estimated at 7.7%, supported by robust domestic demand and stable macroeconomic fundamentals. Growth was driven by a combination of private consumption and sustained public capital expenditure, with private final consumption expenditure accounting for 56.7% of GDP during the year.

Investment activity also strengthened during the year, with gross fixed capital formation contributing nearly 32% of GDP and growing by 9.9%, reflecting continued infrastructure spending and gradual recovery in private sector investment. On the supply side, the services sector remained a key contributor, while manufacturing activity gained momentum, supported by infrastructure development and improving capacity utilisation.

Inflation remained relatively moderate for most of the year before witnessing a gradual increase towards the close of FY2025-26. Consumer price inflation rose from 2.7% in January 2026 to 3.4% in March 2026, primarily led by food price pressures.

Policy focus remained centred on strengthening longterm growth drivers. Continued emphasis on infrastructure development, logistics expansion and fiscal consolidation supported economic activity. Structural reforms, including GST rationalisation and measures to widen the tax base, contributed to improving formalisation and efficiency, while Production-Linked Incentive (PLI) schemes continued to support manufacturing expansion and integration with global supply chains.

At the same time, the external environment remained a key area of sensitivity. Global trade uncertainties, capital flow volatility and geopolitical developments, particularly the conflict in West Asia, have implications for energy prices, trade flows and financial conditions.

Outlook

Indias growth outlook remains resilient, supported by strong domestic fundamentals and continued policy support. Real GDP growth is projected at around 6.6% in FY2026-27, with domestic demand expected to remain the primary growth driver.

Private consumption is likely to remain strong, supported by stable macroeconomic conditions, improving income levels and continued recovery in rural demand alongside steady urban consumption. Investment activity is expected to sustain momentum, driven by continued public capital expenditure and improving private sector participation.

Inflation is expected to witness a moderate increase in the coming year, with risks arising from energy price volatility and weather-related uncertainties. As per the recent forecasts, a below-normal monsoon could impact agricultural output and rural demand, while exerting upward pressure on food prices in the near term.

Ongoing trade agreements and tariff rationalisation measures may provide incremental support for export growth over the medium term. However, global uncertainties may lead to supply chain disruptions, financial market volatility and pressure on external demand and capital flows.

The Union Budget 2026-27 reaffirmed the governments commitment to infrastructure-led growth while sustaining fiscal consolidation. Public capital expenditure was raised to H12.2 trillion for FY2026-27, up from H11.2 trillion in FY2025-26.

Overall, Indias macroeconomic fundamentals, supported by sustained policy focus, infrastructure development and digital expansion, position the economy to navigate global uncertainties while maintaining steady growth momentum.

Industry Overview

Global Writing Instrument Industry

The writing instruments market continues to demonstrate stable demand dynamics, driven by institutional consumption, recurring academic usage and evolving consumer preferences. The market was valued at USD 47.64 billion in 2025 and is estimated to reach USD 50.1 billion in 2026, reflecting growing consumption across regions.

The product landscape includes pens, pencils, colouring instruments, highlighters and specialised writing tools, catering to diverse consumer requirements. Pens account for the largest share, driven by their widespread usage across educational institutions, office and everyday application. Educational institutions remain a key demand driver, supported by improving access to schooling and expanding educational infrastructure across emerging markets.

Consumer preferences are gradually shifting towards higher- quality and differentiated products. Demand for premium and design-oriented offerings is increasing, while colouring instruments are emerging as a faster-growing category, supported by rising interest in creative learning and hobby- based activities. Manufacturers are investing in improved ink performance, ergonomic designs and sustainable materials to enhance product appeal and usability.

Distribution continues to be led by traditional channels, with stationery stores maintaining a strong presence due to consumer preference for physical product evaluation. Simultaneously, online channels are expanding rapidly, supported by wider accessibility and increasing product customisation options. Regionally, Asia-Pacific leads the market, driven by a large student population and continued emphasis on education and literacy across emerging economies.

The global writing instruments market is projected to reach USD 77.97 billion by 2034, registering a CAGR of 5.69%, supported by sustained demand, product innovation and expanding market access.

Indian writing instrument industry

The Indian writing instruments industry represents a large consumption-driven market, supported by the countrys extensive education ecosystem and widespread usage across academic and professional settings. The market stood at USD 858.03 million in 2025 supported by a vast student base, with Indias school system catering to over 24.8 crore students across 14.72 lakh schools, ensuring consistent demand for writing instruments.

Pens dominate the product mix, accounting for 65.0% of the market in 2025, driven by their affordability, refillable nature and widespread adoption across schools and offices. Ball point pens remain the most widely used category owing to their durability and cost efficiency, supporting high-volume consumption across user segments.

From an application perspective, students constitute the largest consumer segment, contributing nearly 80.0% of total demand. This reflects the scale of Indias education system and the recurring nature of academic consumption.

Distribution within the Indian market continues to be dominated by traditional retail channels, with stationery stores accounting for 48.5% of total sales in 2025. Their proximity to schools and residential areas, combined with product variety and

personalised service, continues to support consistent consumer footfall and purchasing activity.

Regionally, West India holds the largest market share at 30.0%, supported by a high concentration of educational institutions and commercial centres in cities such as Mumbai and Pune, along with strong distribution networks and manufacturing presence in states such as Gujarat.

The industry is witnessing gradual shifts in consumer preferences, with increasing demand for branded and ergonomically designed products, particularly in urban markets. At the same time, affordability remains a critical factor in rural and semi-urban regions, where a significant share of volumes is concentrated. The growing presence of organised players, alongside a fragmented unorganised segment, continues to shape the competitive landscape.

In addition, the expansion of e-commerce platforms is improving product accessibility across Tier II and Tier III cities, enabling consumers to access a wider range of products and brands. The Indian writing instruments market is expected to reach USD 1,070.50 million by 2034, growing at a CAGR of 2.40% over the forecast period. This is backed by a large and expanding education base, improving distribution reach and evolving consumer preferences.

Global stationery industry

Demand for stationery products is driven by everyday requirements across educational institutions, workplaces, households and creative applications. Consumption spans a wide range of categories, notebooks, paper stationery, filing and organisational products, school and office supplies, art and craft materials, adhesives, activity kits and other allied products, reflecting a broad consumer base across both residential and commercial segments.

The global market was valued at USD 165.87 billion in 2025 and is estimated to reach USD 173.93 billion in 2026. Growth is supported by expansion of the global education sector, increasing enrolment levels and rising interest in creative activities such as drawing, painting and craft-based applications, which are driving demand for specialised stationery products. Demand for notebooks, paper products, filing solutions and educational accessories is also supported by their recurring use across schools, universities, offices and households. In addition, the shift towards home-based work environments has expanded usage across residential settings. Hybrid working and learning arrangements are generating demand for home-office supplies, organisational products and functional stationery designed for use across multiple environments.

Consumer preferences are gradually moving towards branded, better-designed and value-added stationery. Premium notebooks, planners, journals, creative kits and aesthetically designed office supplies are gaining attention, while sustainable paper, recyclable materials and environmentally responsible packaging are influencing product development.

Asia-Pacific leads the global market, supported by strong demand across emerging economies with large student populations and increasing investments in education infrastructure. While the growing adoption of digital tools presents a structural constraint for traditional stationery products, continued demand across education, creative and office applications continues to support overall market stability. The market is projected to reach USD 268.08 billion by 2034, registering a CAGR of 5.56% during the forecast period.

Indian stationery industry

India represents a significant component of the Asia-Pacific stationery market, supported by its large education base and widespread usage across academic, office and household

applications. The market is estimated to reach USD 18.08 billion by 2026, reflecting robust consumption across paper stationery, school and office supplies, art and craft materials and other allied stationery categories. Demand continues to be anchored in everyday academic usage, supported by a large and expanding student population and ongoing expansion in educational infrastructure.

The industry remains largely volume-driven, with notebooks, paper products, files, folders, adhesives, geometry and school supplies, office stationery, art materials and activity-based products forming important components of consumption. Their recurring use across schools, offices and households provides a broad and stable demand base.

Rising student enrolment and increasing emphasis on structured learning continue to support demand, while growing interest in creative activities is driving consumption of art supplies, craft materials, school activity products and educational kits. Consumers are gradually shifting towards branded and better- quality products, particularly in urban markets. This shift is encouraging organised companies to introduce differentiated products with improved design, functionality, packaging and age-specific applications.

Distribution channels are evolving with the expansion of organised retail and improving accessibility across Tier II and Tier III cities, strengthening product availability and market reach. In addition, demand from offices, educational institutions and home-based work environments continues to support steady consumption. Traditional stationery stores retain an important role due to their proximity to schools and residential areas, while e-commerce and modern retail are improving access to branded and specialised stationery products.

Demand is also expanding beyond conventional school and office products towards creative, hobby-based and activity-led stationery. Products such as art kits, craft supplies, colouring materials and learning-based activity sets are gaining relevance as parents and educational institutions place greater emphasis on creativity and experiential learning.

The combination of large-scale academic usage, rising preference for branded products and expanding distribution networks is expected to sustain growth in the Indian stationery market.

Government Initiatives

Union Budget FY2026-27 - Education Allocation and Focus

The Ministry of Education has been allocated H1,39,289 crore in FY2026-27, reflecting a 14% increase over the revised estimates of FY2025-26. The allocation underscores the Governments continued focus on strengthening school education, higher education and research capabilities. Of the total allocation, 60% has been earmarked for school education and 40% for higher education, highlighting balanced emphasis across foundational and advanced learning systems.

Samagra Shiksha Scheme

Samagra Shiksha remains the flagship programme for school education, with an allocation of H42,100 crore in FY2026-27, accounting for nearly 30% of the Ministrys budget. The scheme supports implementation of the National Education Policy (NEP) 2020, focusing on universal access, educational equity, teacher training and integration of vocational education within schools.

PM SHRI Schools Initiative

The PM SHRI scheme aims to upgrade nearly 14,500 government schools in line with NEP 2020 standards. An allocation of H7,500 crore has been made in FY2026-27, reflecting a 67% increase over the previous year. As of early 2026, over 13,000 schools had already upgraded under the initiative.

PM USHA (Higher Education Development)

PM USHA focuses on strengthening infrastructure and quality standards in higher education institutions, including the development of digital infrastructure and multidisciplinary institutions. The scheme has been allocated H1,850 crore in FY2026-27, marking a significant increase over the previous year to support higher education reforms.

PM-Vidyalaxmi Scheme

The scheme aims to improve access to higher education through collateral-free and guaranteed education loans, with government support covering a significant portion of loan risk. It targets students admitted to premier institutions and is expected to benefit nearly7 lakh students during the implementation period, enhancing affordability and access to quality education.

Global Steel Bottle Industry

Rising preference for reusable and durable hydration solutions is driving demand for stainless steel water bottles, with increasing adoption across everyday, travel and outdoor usage. Stainless steel bottles offer advantages such as temperature retention, durability and safety, making them a preferred alternative to single-use plastic bottles.

The market is projected to grow from USD 1.73 billion in 2025 to USD 2.58 billion by 2031, registering a CAGR of 6.89%. Growth is supported by increasing environmental awareness and rising consumers preference for sustainable and reusable products, along with a rising focus on personal health and hydration. Expanding participation in fitness activities, travel and outdoor recreation is also driving demand for portable and long-lasting beverage containers.

Product innovation and evolving consumer preferences are shaping the industry, with increasing demand for insulated bottles, premium designs and enhanced functionality. The market is also witnessing shifts in distribution strategies, including increased adoption of direct-to-consumer channels and emphasis on sustainable material sourcing.

Indian Steel Bottle Industry

Adoption of stainless steel bottles in India is increasing as consumers move towards durable and reusable hydration products. The transition is supported by regulatory measures restricting single-use plastics and growing preference for products offering long-term usability across daily, workplace and travel applications.

The market is largely driven by urban consumption, backed by rising disposable incomes and changing lifestyle patterns that are increasing demand for insulated and design-led products. Stainless steel bottles are gaining traction across multiple segments, including household usage, office environments and on-the-go consumption segments. Institutional demand, particularly from corporate gifting and promotional merchandise categories, is also contributing to volume growth.

Manufacturers are expanding product offerings with enhanced insulation, portability and aesthetic appeal to cater to evolving consumer preferences. Distribution reach is strengthening through organised retail and e-commerce platforms, which is enabling access across non-metro markets. Continued preference for reusable products, along with expanding application across lifestyle and functional segments, is expected to support steady growth in the Indian stainless steel bottle market.

Global Houseware Market

The global houseware market is shaped by evolving household consumption patterns, with increasing focus on functionality, durability and design across everyday-use products. Demand

remains anchored in utility-driven categories, particularly kitchenware, where product performance and convenience strongly influence purchase decisions.

The market is estimated at USD 357.1 billion in 2025 and is projected to reach USD 533.6 billion by 2035, growing at a CAGR of 4.1%. Growth is supported by urbanisation, expansion of organised retail and the increasing reach of branded products. Cookware and bakeware account for the largest share of around 32.5%, reflecting their essential role in daily food preparation and consistent household demand.

Consumer preferences are evolving towards durable, multifunctional and aesthetically designed products, with increasing demand for premium offerings. Product innovation is being shaped by sustainability considerations, compact formats and alignment with modern kitchen and home environments.

Distribution continues to be led by supermarkets and hypermarkets, supported by product variety, pricing and convenience, while e-commerce platforms are expanding product accessibility across regions. Sustained demand across essential household categories, combined with product innovation and expanding distribution reach, is expected to support long-term growth.

Indian Houseware Market

Indias houseware market is expanding steadily, supported by rising urbanisation, increasing disposable incomes and evolving consumer preferences for organised and modern household products. Demand remains concentrated in kitchenware and other daily-use categories, with consumers gradually shifting from traditional utensils to branded, durable and better-designed products that offer convenience and long-term usability.

The kitchenware segment, a key component of the houseware market, was valued at USD 6.7 billion in 2025 and is projected to reach USD 11.5 billion by 2034, registering a CAGR of 5.91%. Growth is supported by increasing adoption of modular kitchens and rising preference for space-efficient and multifunctional products. Consumers are opting for materials such as stainless steel, ceramic and silicone that offer durability, ease of maintenance and safety.

In addition, exposure to global cooking trends through digital platforms and social media, is influencing purchasing behaviour, leading to higher adoption of advanced and specialised kitchenware.

Expansion of e-commerce and direct-to-consumer platforms is transforming market accessibility by enabling wider availability of products across Tier II and Tier III cities. Online channels offer greater product variety, competitive pricing and convenience, supporting the growth of branded and premium categories. Institutional demand, including corporate gifting and promotional segments, is also contributing to volume growth. These factors are expected to support the continued expansion of the Indian houseware market.

Company Overview

Incorporated in 2016, Flair Writing Industries Limited has evolved from one of the leading writing instruments manufacturers into a diversified consumer products company with a growing presence across writing instruments, stationery, creative products and emerging lifestyle categories. With its origins dating back to 1976, the Company has built a legacy of over five decades and established itself as a trusted brand known for quality, innovation and design excellence.

The Company offers a comprehensive and expanding product portfolio comprising over 1233 products across multiple brands and categories. Its core writing instruments are marketed under the Flair and Hauser brand, complemented by premium offerings by Pierre Cardin. Its innovation-led and creative portfolio is represented through Flair Creative and Hauser Artz. The portfolio further extends into adjacent categories such as steel bottles, houseware products and calculators, enabling the Company to cater to a wide spectrum of consumer needs.

Flairs business is supported by strong in-house manufacturing capabilities, with 11 strategically located manufacturing plants across India, enabling scale, operational efficiency and consistent product quality. Capacity expansion and automation continue to remain key focus areas, with the new manufacturing unit at Valsad and expansion at the Flomaxe Surat facility expected to strengthen production capabilities across writing instruments, stationery and creative product categories.

The Company has established one of the industrys most extensive distribution networks, supported by a wide base of super-stockists, distributors and retailers, ensuring deep market penetration across urban and rural markets. Its strong domestic presence is complemented by a well-established international presence, with exports to over 115 countries, reinforcing its position as one of Indias leading exporters of writing instruments and stationery products.

During FY2025-26, the Company witnessed steady growth across its business segments, supported by robust demand in both domestic and export markets. Growth was driven by the strong performance of its core brands, alongside increasing contribution from its creative and lifestyle segments, which witnessed healthy traction during the year.

The Company remains focused on strengthening its brand- led growth strategy through portfolio expansion, operational efficiency enhancement and continued investments in scalable manufacturing capabilities. Backed by a diversified portfolio, strong distribution reach and sustained focus on innovation, Flair is well positioned to drive long-term sustainable growth and strengthen its market presence across categories.

Segment-wise Performance Pens

The Company designs, manufactures and markets a diverse range of pens across formats and price segments, catering to everyday writing needs as well as premium usage. Its portfolio includes ball pens, gel pens, fountain pens, roller pens and metal pens, supported by a strong brand portfolio, including Flair, Hauser and Pierre Cardin. This enables the Company to cater to a broad consumer base across mass, mid and premium segments.

In FY2025-26, the pens segment reported revenue of H 848.30crore, registering year-on-year growth of 2%. The segment delivered steady performance during the year, supported by consistent demand across domestic and export markets. Growth was primarily driven by the Companys own brands, alongside a gradual shift in the business mix towards branded products.

The pens business continues to remain the Companys largest contributor, providing stability to overall performance through strong brand recall, high product turnover and deep distribution reach.

Strategy Forward

The Company continues to strengthen its position in the pens segment through portfolio enhancement and improved realisations across categories. Focus remains on introducing differentiated products with improved design, writing quality and user experience.

Increasing the share of branded sales continues to be a strategic priority, supported by product mix optimisation and expansion within premium segments. The Company is also focused on widening market reach through its distribution network and improving visibility across retail channels.

Investments in manufacturing capacity, automation and process efficiencies are expected to support further growth while strengthening quality control and cost optimisation.

Stationery Products

The Companys stationery and creative products segment comprises a broad portfolio of school stationery, colouring products, art materials and activity-based kits, marketed under brands such as Flair Creative and Hauser Artz. Catering primarily to students and hobby users, the portfolio combines functionality with design to address evolving consumer preferences across age groups. The Company also offers electronic calculators under the Flair brand, including desktop, pocket and scientific variants, for students and professionals.

In FY2025-26, the segment recorded revenue of H297.80 crore, registering a year-on-year growth of 74%. The business scaled up during the year, driven by new product introductions, portfolio expansion and increasing market acceptance. The Company launched multiple products across categories, strengthening its presence in the creative segment and enhancing shelf visibility across retail channels. Electronic calculators also made a stable contribution during the year.

Growth in the segment was further supported by increasing inhouse manufacturing capabilities, including capacity expansion at the Flomaxe Surat facility, enabling better production control, faster response to market demand and improved product availability. Supported by rising demand for creative and activity-based products, the segment has emerged as a key growth driver for the Company.

Strategy Forward

The Company remains focused on scaling its stationery and creative products segment through continuous portfolio expansion and targeted product development. Key priorities include broadening the product range with differentiated offerings catering to school-going children and hobby users. The Company is also strengthening its in-house manufacturing capabilities to improve turnaround time and enhance cost efficiencies.

Efforts are being directed towards improving visibility across retail formats, including modern trade and e-commerce platforms, supported by focused marketing initiatives. The Company is further leveraging its distribution network to deepen market penetration and enhance product availability across markets. With continued focus on innovation, portfolio expansion and

distribution-led growth, the segment is expected to contribute an increasing share to the Companys overall business.

Steel Bottles and Houseware Products

Expanding beyond its core stationery portfolio, the Company has established a growing presence in lifestyle and utility-driven categories to cater to evolving consumer needs and diversify its product offerings. This portfolio includes stainless steel insulated bottles, flasks and household utility products such as storage and serving solutions, designed for everyday use.

In FY2025-26, the segment recorded revenue of H85.40 crore, registering a year-on-year growth of 95%. The business witnessed strong scale-up during the year, with steel bottles and houseware products emerging as key growth drivers. Revenue from these categories recorded strong year-on-year growth, supported by rising demand and portfolio expansion.

Growth was supported by portfolio expansion through new designs and capacities in steel bottles, along with improved visibility across distribution channels. The Company also leveraged its existing network to scale these emerging categories, resulting in higher contribution to overall revenues.

Strategy Forward

The Company remains focused on strengthening its presence in lifestyle and utility products through portfolio expansion and enhanced product design and functionality. Key priorities include introducing new variants across steel bottle and houseware categories, strengthening manufacturing capabilities to support scale and improving product availability across markets. The Company is also leveraging its distribution network to increase reach and visibility across retail channels.

i Flair Calculator

The Company offers a range of calculators under the Flair brand, including desktop calculators for office use, pocket calculators for basic calculations and scientific calculators for students. These products cater to academic, professional and commercial usage requirements.

New Launches

Product innovation remained a key focus area during FY2025-26, with the Company strengthening its portfolio through a steady pipeline of new introductions across writing instruments, creative stationery and lifestyle categories. During the year, the Company launched 120+ new products with its continued focus on portfolio expansion and market relevance.

Key launches across segments:

Writing Instruments (Pens)	The Company introduced several premium, design-led additions across its writing-instruments portfolio to cater to evolving consumer preferences and strengthen brand visibility.
	Key launches:
	• XO GLOW
	• Bullet
	• Sterling
	• Luma pen
	• Balance pen
	• Inky Spinner
Stationery and Creative Products	The creative and stationery segment witnessed strong product innovation with the launch of learning-focused, artistic and character-themed offerings targeted at students and young consumers.
	Key launches:
	• Zappy Pencil
	• Bling Pencil
	• Blush Pencil
	• Heartz Pen
	• P2P Innovative Products
	• Trigo geometry boxes
	• Glow-in-dark products
	• Carbonix Pencil
Steel Bottles and Houseware Products	The Company broadened its lifestyle and hydration portfolio through the introduction of premium reusable bottles and utility-driven houseware products across multiple formats and designs.
	Key launches:
	• Starlet Vacuum Bottles
	• Aera Stainless Steel Bottle
	• Crest Vacuum Mug
	• Vogue Vacuum Insulated Tumblers
	• Estella Bathroom Set
	• Estella Crystal Bath Series
	• Empire Insulated Casserole

Opportunities

Expansion in High-Growth Segments

The Creative Segment along with Steel Bottles and Houseware Segment are emerging as key growth drivers for the Company, supported by strong consumer demand and continued portfolio expansion. These categories have demonstrated significantly higher growth compared to the core writing instruments business and are expected to contribute an increasing share to the overall revenue mix.

Strategic Partnerships and Brand Strengthening

The Company further strengthened its creative and stationery portfolio through strategic partnerships, including Disney character licensing arrangements and the distribution partnership with Maped France for premium stationery products. These initiatives are supporting portfolio enhancement, improving brand visibility and strengthening positioning in the growing creative learning and premium stationery segments.

Capacity Expansion and Manufacturing Integration

The Company is strengthening its manufacturing capabilities through ongoing expansion at its facilities. The new manufacturing unit at Valsad is expected to augment capacity for writing instruments and stationery products, while the expansion at the Flomaxe Surat facility is supporting scale-up of the creative products segment. These investments, along with higher automation and increasing in-house manufacturing, are expected to improve operational efficiency, enhance production flexibility and support future growth.

Strengthening Distribution and Brand Presence

With an extensive distribution network of super-stockists, distributors wholesalers and retailers, the Company has established deep market reach across urban and rural markets . This network enables consistent product availability and supports scaling of new product categories. The Company is also strengthening its distribution capabilities through focused sales and marketing initiatives aimed at improving throughput and enhancing market visibility.

Growth in Export Markets

The Companys presence across more than 115 countries provides a strong platform for international growth. Increasing traction in export markets, supported by both own brands and OEM business, presents opportunities

for revenue diversification and scale enhancement. The Company also strengthening its presence across regions such as Latin America and the Middle East to capture emerging growth opportunities.

Shift Towards Branded and Organised Products

The gradual shift towards organised and branded products across writing instruments, creative products and houseware categories is expected to benefit the Company. Backed by an established brand portfolio and focus on quality, design and innovation, the Company is well positioned to address growing consumer preference for reliable and differentiated products.

Operational Efficiency and Digital Transformation

The Company is undertaking initiatives to enhance operational efficiency, including ERP upgrades, process optimisation and sustainability-led measures such as solar power installation and recycling practices. These initiatives are expected to streamline operations, improve productivity and support scalable growth across business segments.

Challenges

Intense Competitive Landscape

The Company operates in highly competitive markets across writing instruments, creative products and houseware categories, with competition from both organised and unorganised players. Pricing pressures and product proliferation, particularly in value-driven segments, may impact margins and market share.

Raw Material Price Volatility

Geopolitical tensions can disrupt supply chains and trigger sharp fluctuations in the prices and availability of key raw materials such as plastics and metals. During such periods, managing input costs while maintaining competitive pricing and protecting profitability may pose a challenge for the Company.

Seasonal Demand Variability

Demand for writing instruments remains partly linked to academic cycles, resulting in seasonal fluctuations in sales. This may impact production planning, inventory management and capacity utilisation during certain periods.

Strategy Forward

The Companys strategy is centred on continuous product innovation, portfolio expansion and stronger market visibility, while maintaining consistent quality standards. It will continue to invest in research and development, design capabilities, manufacturing expertise and market insights to develop better-designed, value-added products aligned with evolving consumer preferences and emerging market trends. These efforts will span writing instruments, creative products, stationery solutions, steel bottles and houseware categories, with a focus on improving customer experience and maintaining product relevance.

Having expanded beyond writing instruments into creative products, stationery solutions, steel bottles and houseware, the Company will focus on scaling these businesses through enhanced product offerings, improved operational efficiencies and wider distribution reach. It will also selectively evaluate opportunities in complementary and adjacent categories that align with its core strengths and offer sustainable growth potential. By leveraging its established brands, manufacturing capabilities and distribution network, the Company aims to strengthen customer engagement, capture emerging market opportunities and create long-term value for stakeholders.

Financial Overview

FY2025-26 marked a year of improved scale and growth for the Company, supported by strong demand across its product portfolio and increasing contribution from its branded business. The number of writing instruments sold stood at 250.28 million units during the year, compared to 191.22 million units in FY2024-25.

The Company maintained a wide market presence through its established distribution network, comprising over 8000+ distributors and an extensive base of wholesalers and retailers across the country.

Revenue from operations stood at H 1,25,010.63 lakhs in FY2025-26, compared to H 1,07,986.03 lakhs in FY2024-25. Growth was led by higher traction in the Companys own brands, along with increasing contribution from creative products and steel bottles and houseware categories.

Gross margin stood at 51.02% during the year, supported by changes in product mix. EBITDA for FY2025-26 stood at H 22,453.40 lakhs as against H 18,474.24 lakhs in FY2024-25,

with EBITDA margin at 17.96 %. Profit after tax stood at H 14,134.64 lakhs in FY2025-26, compared to H 11,908.43 lakhs in the previous year.

Consolidated Financial Performance

Metric	FY 2025-26	FY 2024-25
Number of Pens Sold (in lakhs)	14804.18	14,376.30
Number of Distributors/Dealers	8000+	8,000+
Number of Wholesalers/Retailers	3,30,000+	3,30,000+
Revenue from Operations (Rs. in lakhs)	1,25,010.63	1,07,986.03
Revenue from Domestic Operations (Rs. in lakhs)	1,04,404.24	89,820.38
Revenue from Export Operations (Rs. in lakhs)	20,606.38	18,165.65
Gross Material Margin (Rs. in lakhs)	63,777.40	54,770.03
Gross Material Margin (%)	51.02	50.72
EBITDA (Rs. in lakhs)	22,453.40	18,474.24
EBITDA Margin (%)	17.96	17.11
PAT (Rs. in lakhs)	14,134.64	11,908.43
PAT Margin (%)	11.31	11.03
Return on Capital Employed (%) (PBT & finance costs/Capital Employed)	15.82	15.13
Return on Equity (%) (PAT/Average Total Equity)	12.24	11.74
Trade Receivable Days	78 days	80 days
Inventory Days (based on COGS)	136 days	125 days*
Trade Payable Days	32 days	37 days
Working Capital Cycle (Days)	182 days	168 days*
Debt-Equity Ratio	0.06	0.06
Net Debt/EBITDA	0.24	0.03
Sales & Marketing Expenditure Ratio (%)	1.56	1.92
Earnings per Share (Rs.)	13.26	11.35

Ratio Analysis (Consolidated Basis)

Metric	FY 2025-26	FY 2024-25	% Change
Inventory Turnover (COGS / Average Inventories)	2.69	2.93	-8.19%
Current Ratio (Current Assets / Current Liabilities)	5.22	5.43	-3.87%
Debtors Turnover (Revenue / Average Trade Receivables)	4.70	4.56	3.07%
Operating Profit Margin (PBIT / Net Sales)	13.72%	12.97%	5.78%
Net Profit Margin (PAT / Net Sales)	11.18%	11.07%	0.99%
Return on Net Worth (PAT / Average Net Worth)	13.09%	12.43%	5.31%
Interest Coverage Ratio (EBIT / Interest Expenses)	33.05	26.61	24.20%
Debt-Equity Ratio (Net Debt / Net Worth)	0.06	0.06	-

Disclosure Of Accounting Treatment

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (IndAS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016, read with Section 133 of the Companies Act, 2013.

Company Outlook

The Company is well-positioned to sustain its growth momentum, supported by strong demand across its product categories and continued strengthening of its brand-led portfolio. Growth is expected to be driven by the increasing contribution from high-growth segments such as stationery and creative products, and steel bottles and houseware, which witnessed strong traction during the year and are expected to scale further. These segments are likely to contribute a larger share to the overall business going forward.

The writing instruments segment is expected to continue providing stability to the portfolio, supported by established brands, consistent demand and a wide distribution network across domestic and international markets. The Company continues to focus on expanding its product portfolio and introducing differentiated offerings aligned with evolving consumer preferences. Ongoing investments in manufacturing capabilities are expected to support capacity expansion and future growth.

The Companys strong distribution network and growing international presence are expected to strengthen market reach and support demand across geographies. Backed by a balanced portfolio, sustained focus on product innovation and continued strengthening of operational capabilities, the Company remains confident of sustaining its growth trajectory and creating long-term value.

Risk Mitigation

Risk	Impact	Mitigation Strategy
Macroeconomic Risk	Economic slowdowns, inflationary pressures and currency volatility may impact demand across domestic and international markets, affecting revenue growth and profitability.	The Company mitigates macroeconomic risks through market diversification, maintaining a balanced domestic and export portfolio, cost optimisation initiatives and prudent financial management.
		It also focuses on strengthening liquidity, improving operational efficiency and enhancing resilience through supplier diversification and strategic partnerships.
Supply Chain Risk	Disruptions in global and domestic supply chains, including raw material price volatility and logistical constraints, may impact production schedules and increase sourcing costs.	The Company adopts multi-sourcing strategies, strengthens supplier relationships and tries to maintain optimal inventory levels to ensure continuity of operations.
		It also actively monitors input costs and undertakes timely price revisions and cost control measures to manage volatility.
Seasonal Volatility	Demand fluctuations linked to academic cycles and festive seasons may lead to uneven sales patterns and impact capacity utilisation.	The Company has expanded its product portfolio and customer base over the years, reducing its reliance on any single product category or demand cycle. This diversified business model, coupled with enhanced planning and operational capabilities, strengthens its ability to respond effectively to changing market requirements.
Product Quality Risk	Failure to maintain quality standards may impact customer satisfaction, lead to product returns and affect brand credibility.	The Company follows stringent quality control processes across manufacturing and sourcing operations. Continuous monitoring, adherence to standards and focus on product innovation ensure consistent product quality and reliability.
Brand Reputation Risk	Any compromise in product quality or customer experience may adversely affect brand perception and market positioning.	The Company focuses on effective organisational management, consistent product quality and responsive customer service to protect its brand reputation.
		It also monitors changing customer preferences and addresses adverse customer experiences in a timely manner to maintain trust, competitiveness and brand credibility.
I Competition Risk	Intense competition from organised and unorganised players, along with pricing pressures, may impact market share and margins.	The Company focuses on product differentiation, continuous innovation and competitive pricing strategies. It leverages its distribution network, expands presence across channels and invests in brand building to strengthen market positioning.
Regulatory and Compliance Risk	Changes in regulatory requirements, taxation policies and environmental norms may impact operations and cost structures.	The Company continuously monitors regulatory developments and maintains robust compliance frameworks. Processes and product standards are aligned with evolving regulatory requirements.
I Innovation Risk	Failure to adapt to changing consumer preferences and technological advancements may affect competitiveness.	The Company continues to invest in product research and development, design innovation and process improvements, with focus on developing value-added and differentiated products aligned with evolving consumer needs.

Human Resources

The Companys workforce remains a key enabler of its growth, supporting operations across business segments, functions and geographies. As of FY 2025-26, the Company had a workforce of 8,456 personnel, comprising permanent employees, contractual staff and workers across manufacturing and corporate functions. During the year, the workforce was strengthened across sales, marketing and manufacturing to support the scale-up of the creative products and steel bottles and houseware segments, expand in-house manufacturing capabilities and strengthen market reach.

The Company undertook structured learning and development programmes to enhance technical expertise, functional skills, operational efficiency and overall employee competencies across organisational levels. Leadership development and managerial effectiveness were also promoted through continuous learning and knowledge enhancement initiatives. In parallel, employee- focused policies and initiatives were undertaken to strengthen engagement, collaboration, welfare, retention and the overall workplace experience, while promoting equal opportunities and a safe, healthy, inclusive and supportive work environment. These efforts are aimed at improving employee morale and productivity, supporting professional growth and strengthening the Companys ability to attract, develop and retain a capable workforce aligned with its business requirements and long-term organisational growth.

Corporate Social Responsibility

During FY 2025-26, the Companys CSR initiatives focused on education, community development, healthcare support and social welfare, with the objective of creating a sustainable and positive social impact.

The Company continued to support initiatives aimed at strengthening educational infrastructure, improving access to learning facilities, promoting community welfare activities, and extending healthcare support and assistance for the benefit of society at large.

As part of these efforts, the Company continued its CSR project for the construction of the Adarsh Vidyalaya School Building at Sadri, Pali District, Rajasthan, through Shree Khetlaji Mandal. The project aims to enhance educational infrastructure, provide improved learning facilities, and contribute to the long-term development and empowerment of the local community. Through these initiatives, the Company continued its commitment to fostering inclusive and sustainable community development.

Internal Control Systems

Flair operates a structured internal control system overseen by its Board of Directors and Executive Committee. Over time, the Company has invested in strengthening this framework and refining its processes. These enhancements complement the existing embedded controls, standards and monitoring mechanisms that support consistent operational stability. The control framework governs all aspects of business conduct, ensuring compliance with corporate policies and safeguarding company assets. It is designed to prevent and detect fraud or errors, guarantee the accuracy and completeness of accounting records and facilitate the timely preparation of reliable financial information.

Cautionary Statement

The statement made in this section describes our objectives, projections, expectation and estimations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.