Linc Pen

Linc Pen Plastics was on a roll ever since it published its Q2 performance. The company posted a 28% (YoY) rise in net profit on a meagre 2% jump in net sales at Rs.82 crore. What really helped boost the bottomline was the tight leash on costs; its cost rationalization measures seem to be paying off as they rose only 3%.  It moderated working capital cycle (inventory and debtors) by nine days to 121 days which led to a corresponding reduction in finance cost, down 21%.

Exports during the quarter were flat, affected by political turmoil in Iraq, Syria and Yemen, Ebola scare in West African countries and Crimea crisis in Ukraine. The company also worked on value-addition with sale of writing instruments priced at Rs 10 and above growing 44% (YoY). It phased out five low volume/profitability products; enhanced portfolio focus and brand-spend efficiency. The market is probably enthused by the fact that softening crude oil prices could benefit the company as one third of its raw materials used are crude based.