Flair Writing Industries Limited (FLAIR) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Q4NFI26 Earnings Conference Call of Flair Writing Industries Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask

questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star than zero on a touch-tone phone. Please note that this conference has been recorded. I now have the conference over to Mr. Shri Jain. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and welcome to the Flair Writing Industries Limited Q4 and FY26 earnings conference call. Today on the call, we have Mr. Bimal Chandrathar, the Managing Director, Mr. Mohithrathar, the Whole-Time Director, Mr. Sumitrathar, Whole-Time Director, and Mr. Alpesh Porwal, the Chief Financial Officer. A short disclaimer before we start this call. This call will contain some forward-looking statements which may be based upon our beliefs, opinions, and expectations of the company as of today. These statements are not a guarantee of future performance and will involve unforeseen risks and uncertainties. With that, I would now like to hand over the conference call to Mr. Vimal Shandrasa, the Managing Director, for his opening remarks. Thanks to you and over to you, sir.

Good afternoon, and welcome to everyone. Thank you for joining Q4 and FY26 earnings call. I hope everyone had the opportunity to go through our investors' presentation and press release that have been uploaded on the exchange. We are pleased to conclude the year on a strong note, delivering 15.8% top-line growth year-on-year, achieving our stated guidelines of 15% growth. Our new growth engine delivered outstanding results during the year, with creative rising 74% year-on-year and still bottles and houseware recording an exceptional 94% growth for the year. FY26 has been a defining year in our transformation journey. We have evolved from being a largely pan-centric business into a more diversified enterprise. Building strong momentum in high growth categories and creatives and steel bottles and houseware. These two categories now contribute 31% of overall revenue. This marks a strategic shift towards a more scalable and future radiant sustainable business model. At the same time, we are continuing to strengthen our own brand sales which contribute 91% of our business in FY26. It's a clear reflection of power. Growing strength and trust in our brand portfolio. We remain committed to deepening the mix further in the years ahead. Operations at our new Walsat facility are scheduled to commence from Q1-FY27 with capacity ramp-up expected by Q3-FY27. This expansion will significantly enhance our Manufacturing capabilities across the pens and creative segment are supporting increased production volumes and enabling us to cater to growing demand across segments. In light with our strong performance and positive outlook, the board of directors have approved a final dividend of Indian rupees 50 pisa per share, representing 10% of face value of our equity share, aggregating 20% of FYEL 26 similar to previous year. As we look ahead, we remain firmly focused on driving innovation and further deepening our brand leadership. This will position us to deliver end-overing growth, creating long-term value, and reinforce our leadership in the industry for years to come. I now hand over the calls to Mr. Arpes Borwal, our CFO, to discuss in detail about our Q4 and FY26 financial performance. Thank you.

Thank you, MD, sir. Let me begin with the financial performance for the fourth quarter of FY26. Revenue from operations for Q4 FY26 stood at INR 322.9 crores, an increase of 8.4% year-on-year. The gross profit for the quarter was at INR 165.3 crores, which The gross profit margin improved by 258 BIFs year-on-year to 51.2%, driven by a favorable shift in the company's product mix. Also, the increasing contribution from the own brand sales has strengthened pricing power, resulting in an overall improvement in gross margins this quarter. EBITDA for the quarter was at INR 57.7 crores, registering a growth of 23.3% year-on-year. EBITDA margin stood at 17.9%, an increase of 217 BIPs year-on-year. As mentioned in our previous calls, that we are seeing operating leverage come through this year. This reinforces our confidence in the effectiveness of Ongoing business transformation initiatives, including increased automation, managing our human capital, and strengthening distribution relationships to support our expanding portfolio of innovative products. The quarter was at INR 36. Profit after tax margin for the quarter stood at 11.3%, expanding by 96 BIFs year-on-year, supported by disciplined finance costs. The stronger PAD growth was driven by a broad-based improvement in profitability. Supported by expansion across gross margin, EBITDA margin, and overall fat margin. 526 Financial Performance. Revenue from operations for F526 was at Rs. 1250, that's 1,250.1 crores, an increase of 15.8% year-on-year. As mentioned by our MD, sir, we achieved our revenue guidance of 15% this year. Gross profit for full year was Rs. 637.8 crores, which increased by 16.4% on year-on-year basis. The gross profit margin came in at 51%. The gross profit margin grew marginally this year with 30 bps expansion. EBITDA for the full year. By 21.5% year on year. EBITDA margin also improved marginally by 85 BIPs to 18%. Profit after tax margin for the year was at 11.3%, increasing by 28 BIFs. We have performance. Thank you. Launch new products, maintaining higher inventory during the initial demand discovery and feedback phase. Based on market responses and sales forecasts, inventory levels are then adjusted to complete the product lifecycle. Segment Results. Brand sales have continued their strong upward trajectory with consistent growth across the domestic market. Overall, domestic-owned brand sales grew by 17% year-on-year to Rs. 264 crores. Per full year, this number stands at 1017, that is 1017 crores, registering a 20% growth year-on-year. Domestic market has been a constant source of strength and underscores the favorable market positioning of all our products. Contributed Rs. 34 crores to the total revenue in Q4 FY26, an increase of 31% year-on-year, while for the full year, it was at Rs. 122 crores, an increase of 29%. We have consistently focused on increasing our own brand sales and reducing reliance on OEMs, and we are steadily delivering on this objective. Our own brand sales now account for... Approximately 91% of the total revenue in FY26, marking a steady and consistent rise from 87% in FY25, 86% in FY24, and 80% in FY23. The domestic OEM declined from rupees 15 crores in Q4F by 25 to 9 crores in Q4F by 26. Phased out with legacy OEM relationships reduced to zero. Nonetheless, we are pleased to share that new customer engagements through our FlowMix subsidiary. F525 to 17 crores in Q4 F526. Subbute demand being experienced domestically by our clients. I will in demand across key export markets supported by enhanced customer engagement and execution capabilities. Steel bottles and houseware. The creative segment achieved impressive growth of 80% year-on-year growth for Q4 FY26 and 74% year-on-year for FY26 the whole year. The revenue contribution stood at Rs. 86 crores for the quarter, that's Q4, and Rs. 298 crores for the full financial year. We expanded our product portfolio by introducing six fresh offerings under the creative range during the quarter and overall 29 new products during the financial year. We recently incurred a capex of 20 crores Fy26 for the Flomax facility in Surah, mainly invested in the new building and plant and machinery, and has already emerged as a revenue accretive driver for the creative segment. We recently operationalized wooden pencil manufacturing at this facility, a major category expansion in creative segment. We continue to scale the steel bottles and houseware segment as a revenue contribution for the quarter, increased by a stellar 76% year-on-year in Q4 FY26 to Rs. 22 crores as compared to Rs. 12 crores in the corresponding quarter of the previous year. On full year, the segment generated sales worth Rs.85 grows in revenue, which is a substantial increase of 95% year-on-year in financial year 26. Our growth strategy in this segment is driven by two key levers, expanding the product portfolio and deepening distribution reach, particularly within general trade. Welcome to our PEN segment. The total revenue for the quarter declined 4% year-on-year from 221.66 crores to 213.44 crores. The overall decline is entirely attributable to our PEN OEM segment, which contracted 65%. Here, we also want to highlight that our own brand Business in Pen grew 9%. A high single-digit growth. This is a direct testament to the company's strategic focus on building and strengthening our own brand portfolio, which continues to deliver consistent growth. 526 with focus on quality and our revenue mix, showing a significant shift towards own brand sales, which now represents 95% of our pens revenue versus 80% a year over.

Thank you.

Remain confident about the upcoming year with a positive outlook driven by broad-based growth across all segments, supported by new product launches, enhanced manufacturing capabilities, and stronger distribution enabling deeper market reach. Inflated crude oil prices drastically, leading to a corresponding increasing crude link derivatives, which are one of the important components of raw materials. As we maintain inventory buffers over multiple months, we expect a margin impact in Q1 FY27 as higher cost inventory begins to flow through. Costs of such raw material have gone up from 10% to 50% on an average. So we are expecting an impact of about 13% increase in the consumption ratio. A combination of rationalization of schemes and discounts. In household and steelware, we have also increased the selling price for all the products. With sustained focus on premiumization, with a consistently rising share of mid-premium and premium products in new product launches, we expect to further offset the negative margin impact. Reflecting on the quarter, We take pride in delivering overall strong performance despite challenging macroeconomic conditions, and we extend our sincere appreciation to all our stakeholders for their continued support. Building on this momentum, we remain focused on sustaining our progress and driving the next phase of growth. Thank you. I would now like to hand over to the moderator to open the floor for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aradnachain from 361 Capital. Please go ahead.

Thank you for the opportunity, and congratulations on delivering a steady operating performance despite the volatile macro environment that we are in. My first question is, how much is the salience of crude on our raw materials? And you mentioned that the prices have increased to around 10% to 15%. If you could throw some light off, how much has the price hikes been taken during the quarter or even after that? And which SKUs would have seen the most price hikes? And did we witness any channels talking ahead of the price increase that happened? That's my first question.

Hi, Aravda. So, when we say 13% is done on average for direct and indirect Like I said, we also have this raw materials stocked up, which also kind of averages out the impact of increase in the raw material prices.

So, how much is the salience of crude on our raw materials? Like, is it 30%, 40% of our raw materials is crude derivatives, or how is it, if you could?

35%.

35%. And did we witness any channels talking ahead of the raw material increase that was happening?

Sorry, can I repeat your question?

Was there any channel stocking that happened ahead of the raw material price increase before basically the investing?

So what happened, Aradhana, is the wars started as known. The raw material prices started increasing. So there was something that we averaged out our purchase costs out here by buying it at the dips out there and also stocking it. Now, what we see is that the pre-stock material, which is going to have my average cost not dipping down so much as it would be had I been purchasing the raw material at the current prices.

Understood.

And you also highlighted that we might see some bit of dip in our margins because of the inflation in the prices. If you could throw some light on how much could the dip be there on our margins on account of the increase in the raw material prices?

So everything averages out and the impact will be in Q4, a total of 13%, which would net up to something like 4% or something in Q1.

Okay. Okay. Second, I wanted to understand.

Sorry? No, no, no, just to add, this coefficient that I'm looking at is I'm looking at which will eventually go down over the next three quarters. So as to end of FY27, probably we do a recalibration out there and we'll be kind of, you know, at the same levels of margin which we are today, maybe a percent of difference out there which we see.

Okay. The second question I wanted to understand is on the pen segment. If you could throw some light on how is the outlook going to be over the next two to three years? We were guiding for high single digit kind of growth in the pen segment. We've closed the year at around 2%, while I understand that our own brand has grown at 9%. But going forward, how should one look at the mix between pens and steel bottles and creative? Like, obviously, if you see last year, we were at around 77-78% of pens contribution, which has come down to around 68% this year. But going forward, what is the outlook on pens? And I understand the growth levers will be creative and steel bottles. But if you could just help us understand what is the outlook going ahead.

Yeah, so Arana, so what we are targeting for the coming years is the writing instrument, which is pens, would be growing at 5% on an annual basis. And also to add the high growth category, which is creative, we are targeting 50% growth this year as well. And for steel bottles, we continue to grow at 40%. So overall, if you look at the ratio, it will come out to around 30 seconds.

And during this quarter, our steel bottles' revenue has moderated a bit if we compare that to, say, second quarter or third quarter. What is the reason for that, and how should one look at the growth in the steel bottles, that 22, 23-odd crores of quarterly revenue? What is our outlook on that? How do we plan to increase that, and what are the steps that we are taking towards it?

Yeah, so if you look at the Q4, when we compare to Q3, of course, Q3, there was an impact of festivals. So, obviously, the sale was high at that time. But going forward, we are, you know, strengthening all three fronts, which is to do with our GT, general trade, also the modern trade and e-com business, along with the quickcom.

Understood. Thank you so much. I'll join back the queue for follow-ups.

Thank you.

Thank you. The next question is from the line of Sneha from Novama. Please go ahead.

Hi. Good afternoon, team, and congratulations on great numbers. Just a couple of questions from my end. What is the impact that you're now estimating in terms of margins going ahead, and for how long do you think that, you know, it will take to normalize? The reason I'm asking is you've already started taking actions in terms of reducing discounts and probably even increasing prices. But let's say if the situation continues with respect to polymer prices, if the situation continues to remain volatile, when do we see our margins normalizing?

Hi, Sneha. Sneha, like I said, when we look at maps of focus, But if the war continues and the situation continues to linger, Thank you. Thank you. In nutshell, if I say it will have an impact, the inflation will come in and it will have an impact on every product, including our products out here. So the ultimate thing is the rise in MRP is what everybody will see. But today we don't envisage that this crisis would continue beyond next 2-3 months when it starts stabilizing by the time. So even if the war thing... Pricing, the civilization will take.

Noted. And did I hear it correctly that for tennis division now, we are expecting around 5% sort of growth, and rest of the segments will lead to driving of overall 15% growth?

Yes. What Mohit just said is 5% growth is what we are expecting in pens, and 50% and 40% in creative and steel bottle, which comes to 15%.

Got that. And lastly, I just wanted to, you know, take your views on the inventory days reduction. Now, we have been targeting that for over a year or so. What is the progress that, you know, we are making, and what are the actions that we are taking? And FY27, what's the probable reduction that we will be able to see in the working capital cycle?

So, the entire working capital, if you see, our inventory days went up from 87 in the previous year to 94 in this year. And over the period, what we see is just a marginal improvement quarter on quarter also. Today, we stand at 97 days. This is majorly because of the pre-stocking, as I said, which we anticipated. And just to safeguard our interest, we... By debtors and all, the numbers have started coming. Obviously, okay, going forward to the streamlined inventory, you know, the inventory pre-stalking was in one-time event, which we say, this is not what we are going to, it's going to repeat. So, with the entire West Asia crisis coming, moving in a direction, we see around five to seven days of improvement in inventory in the coming two calls.

Understood. Thanks, thanks to God, even all the very best.

Thank you.

Thank you. The next question is from the line of Janesh Joshi from PL Capital. Please go ahead.

Thanks for the opportunity. Sir, you mentioned that you have restocked certain inventory in anticipation of a drive. So, can you just highlight how many months of cover do we have as far as 1Q is concerned?

My inventory, when I say raw material and packing material, which makes up to around 40% of my inventory, and when I say stocking up of the inventory, it's around four to five weeks of inventory, raw material which we stock.

Understood. And sir, I just want to understand our export revenue growth trajectory a bit better, because if I look at our own brand sales, it has grown quite handsomely in 4Q, but our export OEM revenue is down, if I'm not mistaken. And given the fact that we are facing headwinds in India, Well, as well as the own brand revenue. One category is reporting the growth, whereas other is declining. So if you can just explain this bit.

If you see in the export market, the overall in the OEM segment, there are many factors, and recently due to the West Asian conflict that was going on, that impacted the overall, you know, route, even the freight costs and even the route towards the exporting market. But when I say the own brand growth, we had a significant, you know, growth. And I think we are going forward, we continue to maintain that, you know, strategy. And now, as you know, we have also opened up four new countries. And overall, we are 100 countries now in the overall export market.

Can you share out of the total export revenue, what is the share of these troubled countries at this point in time and what has been the fall within that category as such?

So, the overall export to the Middle Eastern countries is about 25%.

And the extent of fall that we have seen in this quarter, I mean, is it possible to kind of give some color on that?

So, see, past few weeks or past couple of months, we have not been able to export there, mainly because of the, you know, the route is closed. So, but anyways, when we talk to our buyers and our distributors, they are very, very positive because The back-to-school season is coming there as well, so they are very optimistic about the future business in this year.

I just wanted to understand the growth guidance of steel bottles and creatives a bit better. We are seeing a 50% growth for creatives and 40% for steel bottles. I think we launched about 59 new products in both these categories in FY26. So, what is our plan for FY27 in terms of new launches and any touchpoint expansion that we are planning, especially on the steel bottle side? Because I believe on creatives, we are at about 65,000 to 70,000 in terms of touchpoints. So, what exactly is going to drive the growth in these two categories? And also within steel bottles, are we planning to add the fourth line anytime soon?

New products. Out of the categories, we have to increase the depth of offerings of the products, and so the new launches will continue for this year as well, and when we talk about the overall coverage in Creative, I would say we would maintain the same and reiterate that, you know, we would be increasing the depth. Our support in each and every outlet rather than increasing. We are launching a lot of new ranges. Since, you know, the base is small in all three categories, which would be general trade, modern trade, and e-coms, the growth is going to be...

And fourth line, sir, I mean, any plans to add?

Adding one more line.

Thank you so much and all the best.

The next question is from the line of Nitin Jain from Fair Value Equity Advisory. Please go ahead.

Yeah, thank you. My questions have been answered.

Thank you. The next question is from the line of Rahul John, from Credent Wealth.

Yeah, thanks for the opportunity and the congratulations on a good set of numbers. More specifically, we have been exceptionally well on the creative side and the bottom. So, my first question is, sir, with regards to the CAPEX, which we have done in the last three years, GarageBlock has almost gone up from about 200 crores to 40 crores plus. The cash flow KPEX, which I can see from last year's cash flows, is roughly around 350 crores. So, two questions related to the KPEX part. One is see what further KPEX we plan to do in the current year, that is FY27. And based on the KPEX, which we have done till now, and also the commercial start of operations at Valsar and Surat, the 20 crore KPEX. So typically, with this kind of infrastructure, what kinds of peak revenues are achievable?

The major part of this is like... What we see in the coming year, in this quarter, when we capitalise the new Bulsat facility, so we have another outlay of... Having said this, historically, you will see the number of times of revenue which we generate from our capital assets is... It's more than three times. So, the similar revenue is what we expect from all the capital expenditure. Now, if I were to put the capital expenditure, give you a proper perspective, annually we have a replacement, etc., of around 40 crores. Now, with this, another 72 crores of capex coming in. Another 72 crores which we capitalize in Valsat, over the period of two to three years, where we see we reach the optimum level of capacity levels, and it would... Give us three times of this expenditure.

So, just to understand this clearly, based on the current capex plans, which is one which is completed till 31st March, and one which you spoke about the world fat, we will have about further around 70 crores. So, with this world fat thing done completely, what kind of peak revenues are possible with this existing infrastructure?

I am talking about the

peak revenue of the total. Because we have been doing capex for last 2-3 years now, continuously.

We have been doing capex and we are also building up manufacturing facility. What we see in the next, the peak revenue from the assets which we would have, would come to around 1750 crores of sales which we can do from these facilities which we are building up.

Okay, so including the WALSAB new 70 crores edition, it will be 750 crores.

Yes, that's the capacity which we will ultimately build and operate over a period of time.

So, my, so, okay. And as we go forward, do we plan to reduce this intensity of CAPEX? Reason being that somewhere due to the CAPEX, or can we go to in terms of some kind of asset-like model, so that our return ratios go beyond, say, 20-25 percent?

We're not thinking about an asset light at this point of time. The way we are functioning out here by our capital outlays, and we're going to continue with that. So it's not that we are saying that we are going to have a lot of capital outlay, but as a need basis and the opportunities at a given period of time, we plan the CapEx out.

So, we didn't create this. We have done exceptionally well last year, and again, we are expecting about 50% growth in the current year, FY27. So, what top two or three product categories are driving this growth, and where do you feel still there is a maximum potential to grow at this speed of 40-50% for another two to three years to come?

So the maximum revenue growth what we have seen in last couple of years is in the pencil category and also in the kids category. So pencil is going to grow further for next two, three years. And also we will be adding new categories in terms of the coloring range, the geoboxes. We would strengthen our position there as well. And when we talk about the pencil, it is, you know, all the pencils I'm talking about, which is the mechanical pencil, the wooden pencil facility, which we just added in Surat, and as well as the 2mm mechanical pencil, which we recently launched.

Sir, with regards to the rationation of schemes which you have done and the price increases which you have taken across our product categories. As we speak today, and we are entering the school season, school is about to start. So, how is the demand scenario as we speak today?

So, the demand is extremely positive when we talk about the back-to-school season. So, it's very, very positive.

So, there is no dent on the demand post the price increases you should have taken? No, no, no. And last question, sir, just to clarify on the margin impact. So, last year, our operating margins have been somewhere around 18% for the full year. And you did delegate that, of course, due to the crude impact, there will be some dent. But for the overall year, you said we should be back to around 18% margins for the year as a whole. Is that understanding correct?

So, last year, the margins were at EBITDA, Kharu, Tokpur, is 17.11%. And this year we are closing almost close to 18% EBITDA. Are you talking about these EBITDA margins or are you talking about the consumption ratio?

I am talking about EBITDA margins, sir. Yes.

Exactly. So we have, we said that we will be, last year also at the beginning of the year, when we had the meet, we had said that we will do anyways more than what we did the previous year, which was 17.1%. And throughout, in all the four quarters, we have kind of had a higher margin.

Very true. Very true. Now, I'm talking about the year, the current year FY27. So, you said there is some impact which margins will be there in quarter one. But for the whole year, probably you feel that as we go forward, the overall margins for the full year can be around 18 percent.

So, I think looking at the global scenario right now, I think the overall impact that we maximum see right now is the maximum of a 1%... Up and down, based on the targets that we have set.

Okay, so the range can be 17 to 19%.

Sorry to interrupt. Mr. Rahul.

Yeah, that's my last question. I'm just clarifying. I'm just clarifying, that's my last question. So the margins will be around 17 to 19%, is that I'm listening, right?

Yeah, so like we said, that our target was towards 18%, so we might see a, you know, impact of one person looking under the obesity.

Sure. Thank you so much, sir. And thank you.

Thank you. The next question is from the line of Ananya Nichani from Thinkwise Wealth Managers, LLP. Please go ahead.

Yeah, thank you for the opportunity. On the receivable stage improvement, I wanted to understand what exactly drove that and whether it's sustainable going forward.

In terms of receivable, when we have shown an improvement, marginal improvement, it's a simple thing, it's a process which we have studied about the collection and addressing the needs.

See, also as you see, as the overall impact of the steel and the household and the creative category grows, this impact will further correct itself going forward. Because the strategies that we have put in place for these two particular segments are in a better manner as compared to the overall history of PEN's credit segments that we were maintaining. So I think going forward, as we have, like Alpay said, that we have improved marginally, I think going forward, with this ratio, we will further improve our, you know, numbers, and number of days.

So, the receivable stage will continue to improve, is what you are saying.

Yes, for sure.

Okay, okay. Got it. Thank you so much.

Thank you. The next question is from the line of Nilesh Toshi from Prospero 3 ANC. Please go ahead.

Thanks for the opportunity. Moi, sir, congratulations for the good set of numbers. Sir, the result could look much better if the standalone also has performed better and contributed, because since last two years, standalone profit is at the operating level, it is the standstill. Rather, it is reduced from the 2024. So, what are the reasons why the standalone profit is not encouraging, though the revenue is growing, but the operating profit is not growing? It is only the subsidiary which is generating the higher profit, and so, at the console level, the profit and revenue looks good. So, what are the steps companies are taking to improve the profitability of the standalone level?

So across all the companies, the main company or the subsidiaries, the production of the writing instruments, creatives are spread over. So it is not specifically to any particular company that the margins are improving. It is the overall turnover that happens, the way the expansion and the capex has happened in various categories in the new company, the subsidiary company, where in 2017 when the tax regime had gone down, so major expansion is happening there. You understand? So, the output of the subsidies will always be higher at overall level while the holding company continues to maintain its growth.

Sir, our revenue is growing at the standalone level, and I think at the standalone level, we are operating the band business, and that business is growing, the revenue is growing, but the operating profit is not growing. It was 176 crore in the FY24. Now, it is 155 crore when we are reporting the 1,000 plus crore rupees of the revenue at the standalone level. So my question is why it is from 176 crore to 155 crore rupees and the revenue from 900 to 1000 crore rupees.

I want to clarify over here that when we are looking at PEN's business, creative business, Depending on the product mix again, and also on the market of the product, the sales kind of, you know, is affected. However, if I were to look at it from the consolidated levels, you will see the improvement or which is the best way to look at is consolidated levels. When you're talking of standalone legal entities, I would say that these are the by-products of the product mix which we have manufactured and sold from those manufacturing units.

Okay, sir. So, if we talk about the consolidated level, so there is a profit GP growth of 16%, from 547 crore to 637 crore rupees, the GP growth, in absolute term, it is 90 crore rupees. Our operating profit at the console level grew by 40 crore rupees. Why? Because the employee cost has grown by 43 crore rupees. If any year, wherever we could not maintain the such GP, and because the employee cost is more of a fixed nature of cost, so we will take a hit at the operating level. So will it be a continued process of the employee cost is increasing, I think, faster than our GP growth. So what is your thought on the employee cost and particularly at the operating level? How it will look if there will be no GP maintenance or GP growth?

So, I'll say employee cost, if you look at the absolute number, it might grow, but so does the sales growth. Thank you. To total those numbers, my employee cost remains between 20 and 21 percent. I won't like your fear of it would have an impact on my profit. No. It's only the other expenses are decreasing if you see the numbers as a part of percentage.

Okay. Thank you, sir. Thank you. That's all from my side. Thank you, sir.

Thank you. The next question is from the line of Manpreet Arora from Aroravid. Please go ahead.

Yeah, thank you for the opportunity. Am I audible, sir? Yeah. So, sir, the first question is on the competitive landscape. Now, you mentioned that, you know, we can do about 50% growth in a creative segment. And if you look at the creative segment, there are already players that are, you know, we have Dom's, we have Faber-Castle, we have Hello, we have, you know, other than Cambly, et cetera. Now, you know, to achieve such a high rate of growth, you know, will it be driven by a capture of market share? Or do you think the market itself is growing at a very high speed, a high rate? And then, you know, we can. So, if you can talk about the competitive landscape in general and how we approach the mission to grow there.

Yeah, so what we expect from the growth is from the, we will increase our, grab the market share from the existing. Players in the category. And the main reason why we have been growing at such a high speed is the innovative products, what we have launched in the last two years. And the pipeline of the new products which we are planning to launch in the coming years is quite exciting. So based on that, you know, we are super confident that we would be We would be able to grab that market share from our existing competitors.

Okay. Primarily driven by capturing market shares.

Yeah.

Yeah. Okay.

And, of course, new innovative products.

Sir, second question is on the welfare facility. Now, in the previous quarter presentation said that it will be partially commissioned. Quarter 4. Now we are seeing it will be commission or it will start in Q1 by 27. So, has there been a delay in commencing the facility?

So, I think, yeah, looking at the Q4 overall global scenario, I mean, there's a slight delay, but I think in Q1, it has already started functioning. So, already the machinery, the raw material, that was partly delayed, but I think Q1, like mentioned, it has already started.

Yeah. So, sir, our understanding was that once Welfare starts, you know, a lot of the work that we outsource today on the creative side will come in-house, and that should also help us in improving our margin. Is that understanding still correct? And have you taken that into account? You know, because we are saying that we'll lose a certain margin because of the volatility, but still guiding for... 17-18% end of the year. So that reduction in margin, that improvement in margin that we'll get from Walsar is accounted, I'm assuming, in the whole situation.

See, as you see, the overall impact is much higher, but considering that also, like what you just mentioned, the Valsas Council and bringing a lot of these, you know, outside products in-house that will help us maintain, and that's why we are restricting ourselves to that percentage, and we're still continuing with the guidance that we are putting in place despite the global scenario. So, yes, definitely, it will help us in, you know, sustaining and maintaining the numbers that we are targeted despite the global scenario.

Okay, great. So one last one on the marketing plan. Now, you know, a large part of our customer base is students or, you know, schools and college students. Now, given that, you know, what is our marketing strategy? Is it, you know, so we have a brand ambassador and then I think we do school reach outs. Where we try to increase visibility of a product and promote, but given that, you know, the buyer is young and school-going, what are the other things? I mean, are we active on social media? And going forward, what will be our incremental marketing spend towards which channel?

So the strategy would remain the same. We would be actively promoting our products on social media and as well as schools promotion will be actively on and a lot of BTL activities in terms of, you know, using a good POP display stand and acquiring a big shelf space in each outlet.

All right. So, and this has been a strategy in the last few years as well? What I'm trying to understand is, has there been a change in the strategy?

No, no, it's the same. It's the same.

Okay.

All right. Thank you very much. Thank you. Ladies and gentlemen, that was the last question for the day, and I now hand the conference over to the management for closing comments.

Thank you all for taking part time for this call. For any further queries and questions, you can reach out to our... M.U.F.G.

Thank you. On behalf of Flair Writing Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.