| Kokuyo Camlin Limited | ||||||
| Ratings reaffirmed at ‘Crisil A+/Stable/Crisil A1’ | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil A+/Stable/Crisil A1’ ratings on the bank facilities of Kokuyo Camlin Limited (KCL).
Operating income expanded at a moderate 3% to Rs 579 crore in the first nine months of fiscal 2026 due to growth in quick commerce platforms and a focus on organised retail. Revenue is expected to clock a compound annual growth rate (CAGR) of 10.4% over the medium term supported by new product developments, increased exports, robust demand for art materials, writing instruments, core stationary products and commissioning of the capital expenditure (capex) in Jammu.
Operating margin nearly doubled to 8% in the first nine months of fiscal 2026 due to lower base of 4.5% in the corresponding period of the previous fiscal owing to inventory loss. Margin is estimated to see modest improvement in fiscal 2026 (to ~8%) as compared to the lows of fiscal 2025, driven by operational efficiency. However, raw material prices will remain monitorable for this fiscal as certain products rely on crude derivatives.
Financial risk profile is healthy and expected to improve further on the back of sustained profitability. Networth is adequate at ~Rs 320 crore as on March 31, 2026, and debt protection metrices comfortable (given nil term debt on the books). Healthy debt protection metrics is reflected in expected interest coverage of 12-17 times and gearing of ~0.15 time over the medium term. Cash and bank balance of ~Rs 8 crore as on September 30, 2025, along with unutilised fund-based limit of ~Rs 140 crore provides further cushion.
The ratings continue to reflect the established brand of KCL in the stationery industry in India, its improving profitability and healthy financial risk profile. The ratings also factor in the significant benefits derived from the business and financial linkages with the parent, Kokuyo & Co Ltd, Japan (Kokuyo). These strengths are partially offset by susceptibility to intense competition and volatility in input prices. |
Analytical Approach The ratings of KCL factor in the support expected from its parent, Kokuyo. Crisil Ratings believes KCL will, in case of exigency, receive distress support from the parent considering Kokuyo’s holding of 74.44% in KCL, as well as operational, technical and need-based financial backing. |
Key Rating Drivers - Strengths Strong operational and financial support from the parentKokuyo is a leading player in the office stationery and furniture products industry in Japan, particularly in notebooks, office supplies and office furniture. Technical collaboration for new product development with the parent has widened the product offerings of KCL. Strong financial support from the parent is reflected in the rights issue of Rs 103 crore in fiscal 2014, primarily for expansion. The extensive experience of the parent as an established player in the stationery and office furniture market in Japan will continue to aid KCL’s growth. The company’s brands, Camel and Camlin, have a strong recall and a presence of more than 77 years. It has a diversified portfolio of over 2,000 products and a pan-India presence. The Kokuyo group sells a wide variety of stationery products, such as pencils, geometry boxes, and scholastic colours. Its strong distribution network of more than 300,000 retail outlets and over 2,500 stock keeping units aids sales growth. It has a leading market position across its core product segments. Operating income saw moderate growth of 3% to Rs 579 crore for the first nine months of fiscal 2026, driven by growth in quick commerce platforms and a focus on organised retail. Revenue is expected to clock a CAGR of 10.4% over the medium term supported by new product developments, increased exports, robust demand for art materials, writing instruments, core stationary products and the commissioning of the Jammu capex. The operating margin nearly doubled to 8% in the first nine months of fiscal 2026, due to a lower base in the corresponding period of the previous fiscal of ~4.5%, which was impacted by inventory loss. The margin is estimated to improve in fiscal 2026 from the lows of fiscal 2025. However, raw material prices will remain monitorable for this fiscal as certain products rely on crude derivatives. Networth was adequate at ~Rs 320 crore as on March 31, 2026, with comfortable debt protection metrics, given the nil term debt on the books. Interest coverage is expected to be at 12-17 times, and gearing around ~0.15 time, in the absence of large, debt-funded capex over the medium term. The cash and bank balance of ~Rs 8 crore as on September 30, 2025, along with an unutilised fund-based limit of ~Rs 140 crore, provides further cushion. |
Key Rating Drivers - Weaknesses Susceptibility of operating margin to fluctuations in raw material prices In the stationery industry, cost of production and profit margin depend heavily on raw material prices which account for a major portion of the production cost . Prices of key materials, such as plastic, paper and pigments, have been volatile in the past few years and KCL is susceptible to fluctuations in these prices. However, on account of prudent management, operational efficiency and the ability to partly pass on the prices to customers, the company’s operating margin is expected to sustain at 7-9%.
Exposure to intense competition The domestic stationery industry is highly fragmented with many unorganised players at the lower end of the product segments, such as pens, pencils and adhesives. While brands in the stationery domain are limited, the company faces intense competition from cheap, non-branded variants, and Chinese stationery. |
Liquidity Adequate Liquidity is expected to remain adequate over the medium term, supported by projected cash accrual of Rs 35-40 crore per annum. Fund-based limit of Rs 167 crore was utilised at a mere ~5%, on average, for the 12 months through January 2026. With nil debt obligation and expected capex of ~Rs 25-30 crore in fiscal 2027, along with sufficient cash accrual, KCL is unlikely to raise debt. Moreover, the parent will continue to provide ongoing and need-based support in case of exigencies. |
Outlook Stable Crisil Ratings believes KCL will continue to benefit from its established market position and distribution network while maintaining comfortable financial risk profile over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company KCL was set up in 1931 as Dandekar & Company by Digambar Dandekar and Govind Dandekar. The firm was reconstituted as a public-limited company in 1946 and was listed in 1988. KCL is one of India’s leading stationery and art products company. It designs, develops and manufactures a variety of stationery products at its plants in Tarapur and Patalganga in Maharashtra and Samba in Jammu. Kokuyo holds 74.44% stake in KCL. |
Key Financial Indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Fully interchangeable with vendor bill discounting |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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Annexure: List of instruments and names of regulators of the instruments As required by SEBI CRA Circular dated Feb 10, 2026, a list of activities or instruments falling under the purview of various FSRs, along with the names of respective FSRs, is being disclosed below:
* Includes securitisation transactions involving assignee payout, acquirer's payout. ~ The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In PRs subsequent to issuance(s), Crisil Ratings Limited shall separately capture the rated quantum details along with names of respective regulators. ^ Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions. # There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. @ These ratings were assigned during regulatory regime prior to introduction of SEBI CRA Circular dated Feb 10, 2026 and the investor side regulators have accordingly been included.
Note: Kindly note that for activities or instruments falling under the purview of FSRs other than SEBI, the grievance/dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. |
Criteria Details
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