According to the Crisil analysis, capacity expansion and expenditures in product innovation will encourage manufacturers to borrow. The operating margin will increase by 150-200 basis points (bps) year on year to 13 per cent this fiscal owing to decreasing raw material prices
India’s writing instruments business is likely to rise 13 to 15 per cent year on year this fiscal, with a continuing increase in demand from the education sector as students return to the physical method and increased exports due to rising demand from the US, according to a Crisil Ratings research. This follows on the heels of a 33 per cent increase in the previous fiscal year. In the long run, the sector will gain from India’s demographic dividend and an increased per centage of organised players.
According to the Crisil analysis, capacity expansion and expenditures in product innovation will encourage manufacturers to borrow. The operating margin will increase by 150-200 basis points (bps) year on year to 13 per cent this fiscal owing to decreasing raw material prices.
“Demand for writing instruments has surpassed pre-Covid levels, with a complete return to physical education from the interim online mode. The overall growth in the education sector, driven by government initiatives such as the National Education Policy and the Samagra Shiksha Scheme, which focus on integrated school education from pre-school to Class XII, bodes well for the growth of the writing instrument sector,” said Jaya Mirpuri, Director, Crisil Ratings.
Exports are expected to climb 15 to 20 per cent this fiscal year, aided by tie-ups with multinational brands for sales in the US as part of a plan to de-risk from China. Exports account for one-fourth of sector revenue.
Organised manufacturers’ market share increased from 65 per cent to 80 per cent of the Rs 10,000 crore industry during the last three fiscals. The organised part of writing instrument producers, which accounts for over 80 per cent of the business, will benefit from this upturn, the report added.