>LINC PEN & PLASTICS LIMITED: Good growth prospects

Linc Pen (Linc) has over the years built an aggressive supply chain which comprises the manufacture of writing instruments at very competitive costs. The Kolkata-based manufacturer of writing instruments and stationery also supplies goods to various global retail chains.

■ Stock trigger: Linc, we believe is a play on the India’s consumption and outsourcing stories. We believe that news of any major orders from any global retail chain will act as a trigger for the stock. On the other hand retail network expansion, in the short-term, may be a lowdown for profitability.

■ Brands: Linc owns a well-established brand in the domestic market. The company in all has three manufacturing units of which two are in Goa and one is located in Kolkata. Its brand portfolio also includes names like Uniball from Mitsubishi Pencil & Company and Lamy of Germany.

■ Vast distribution network: Other than a nationwide distribution network, the company is also a supplier to retail chains in the UK, Northern Europe and the US. Linc also supplies goods to retail chains like Wal-Mart and Tesco.

■ Retail chains for office stationary: Starting with Kolkata, the company is rolling out retail outlets for office stationary under the brand name Justlinc and Officelinc. These retail outlets are based on the idea of providing all stationary items under one roof. Having already set up a few stores in Kolkata, Linc is planning a nationwide rollout, going ahead.

■ Our View: We expect Linc to clock sales of at least Rs 300 crores in a year. Considering the same even if we were to value the company at 1x sales we have a triple bagger. We have a mid-term target price of Rs 150. Near-term target price Rs 110. Buy.

To read the full report: LINC PEN