LINC Limited Q3 FY26 Earnings Call: Revenue Growth Amid Margin Pressures
LINC Limited's Q3 FY26 earnings call revealed mixed performance with 5.8% revenue growth to ₹129.29 crores offset by margin pressures. The company reported 20% volume growth but lower realizations due to product mix changes, while maintaining strong cash flow of ₹33.81 crores and advancing strategic joint ventures across multiple geographies.
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LINC Limited held its Q3 FY26 earnings conference call on February 12, 2026, revealing mixed financial performance with modest revenue growth offset by continued margin pressures. The writing instruments manufacturer reported operational challenges while maintaining focus on long-term strategic investments and product innovation.
Financial Performance Overview
The company's Q3 FY26 financial results demonstrate a challenging operating environment during the quarter:
| Metric: | Q3 FY26 | Q3 FY25 | YoY Change |
|---|---|---|---|
| Operating Income: | ₹129.29 crores | ₹122.16 crores | +5.8% |
| Operating EBITDA: | ₹12.90 crores | ₹14.61 crores | -11.7% |
| Operating EBITDA Margin: | 10.0% | 12.0% | -200 bps |
| Profit After Tax: | ₹6.77 crores | ₹8.72 crores | -22.3% |
| PAT Margin: | 5.2% | 7.1% | -190 bps |
Revenue from operations reached ₹129.29 crores, marking a 5.8% year-on-year increase. However, operating EBITDA contracted with a margin of 10.0%, representing a decline of 200 basis points compared to the previous year.
Operational Challenges and One-Time Impact
According to CFO N.K. Dujari, the quarter's performance was impacted by specific operational factors. The operating EBITDA margin was affected by a one-time increase in employee benefit expenses arising from recent changes in labour regulations. Excluding this non-recurring impact, the operating EBITDA margin would have been approximately 10.7%.
Joint venture losses of ₹83 lacs also contributed to the profit contraction. These joint ventures remain in the investment phase, with the company viewing them as strategic long-term value creation opportunities.
Product Mix and Volume Performance
During the earnings call, management provided insights into operational metrics:
| Parameter: | Q3 FY26 Details |
|---|---|
| Total Pen Volume: | 16.4 crores |
| Pentonic Volume: | 6.5 crores |
| Volume Growth: | ~20% YoY |
| Average Realization (LINC): | ₹5.00 |
| Export Revenue Share: | ~20% |
Whole-Time Director Rohit Deepak Jalan explained that the company has focused on the below ₹5 segment and introduced products at the ₹5 MRP price segment, leading to changes in product mix and average selling prices.
Strategic Initiatives and Joint Ventures
LINC continues to advance its international initiatives across multiple geographies:
| Joint Venture: | Status Update |
|---|---|
| Mitsubishi Pencil Co. (Japan): | Operationally stable, encouraging market response |
| Turkish Partner: | Operations commenced, promising order book for 2026 |
| Morris (Korea) Subsidiary: | Expected operational by Q1 FY27 |
| Kenya Subsidiary: | Sales momentum building |
| LINC On Subsidiary: | Operations commenced, meaningful traction expected from FY27 |
Management noted that while the ramp-up across certain initiatives has taken longer than initially anticipated, the foundation being laid is deliberate and necessary for long-term value creation.
Financial Position and Cash Flow
LINC maintains a strong financial position with healthy cash generation:
| Financial Metric: | Q3 FY26 |
|---|---|
| Cash Flow from Operations: | ₹33.81 crores |
| Net Free Cash Position: | ₹10.14 crores |
| Fixed Asset Turnover: | 4.05x |
| Cash Conversion Cycle: | 61 days (improved from 63 days in FY25) |
The company continues to demonstrate financial discipline while investing in growth initiatives and maintaining efficient asset utilization.
Management Outlook
Despite near-term pressures, management remains confident in the long-term value creation potential of their strategy. Rohit Deepak Jalan emphasized that the company's focus has been on strengthening the product portfolio and building long-term growth drivers rather than chasing short-term expansion. Several new products launched recently are witnessing positive early traction, with their contribution expected to scale up progressively as distribution expands.
The company continues to invest in brand relevance, distribution reach, and category expansion, which management believes will support sustainable growth over the medium term. With joint ventures expected to stabilize and new products gaining market acceptance, LINC anticipates improved performance in coming quarters.
Historical Stock Returns for Linc
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.28% | -3.57% | -2.32% | -12.95% | -5.26% | +147.27% |
