Discover how Flare's recent IPO success and their focus on handwriting and expansion into other products has contributed to their growth and profit margins. Analyze the price to earnings ratio of the company before and after its successful IPO. Discuss concerns about the company's diversification bet, inventory management, and working capital needs.
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Quick takeaways
The importance of handwriting for students is being recognized globally, leading to the growth of the pen and pencil industry in India.
Flair pens' success can be attributed to its strong brand recall, extensive distribution network, high-profit margins, and diversification of its product range.
Deep dives
Pens and pencils seeing a renaissance in education
Contrary to the belief that pens and pencils are becoming obsolete in the digital age, researchers and schools are recognizing the importance of handwriting for students. Studies suggest that writing by hand helps improve reasoning and memory skills. Schools worldwide are reintroducing handwriting instruction, even beyond the first grade. This shift towards traditional methods of learning has contributed to the growth of the pen and pencil industry, which is currently worth nearly 7000 crore rupees in India.
Flair's success in the writing industry
Despite the digitization of writing, Flair, one of India's top three pen makers, has experienced consistent growth with a 14% increase in revenues, outperforming the overall industry growth rate of 5.5% in the last six years. Flair's success can be attributed to its strong brand recall and loyalty, extensive distribution network with over 3,000 sellers, and high-profit margins compared to its competitors. Additionally, Flair has diversified its product range by striking licensing deals with international brands and venturing into manufacturing various writing instruments and other products like steel bottles and casseroles.
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The Success and Future of Flare, India's Pen and Pencil Maker