CRISIL stated that the ratings continue to reflect the established brand of the company in the stationery industry in India, its improving profitability and a healthy financial risk profile. The ratings also factor in 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 to volatility in input prices, leading to pressure on profitability.

Operating income rose 52% in fiscal 2023 to Rs 775 crore led by revival in sales following Covid-19 related disruptions and increased penetration in the domestic market. In fiscal 2023, operating margin moved closer to pre-Covid level around 7%.

The operating income is expected to increase in fiscal 2024 and operating margin is likely to be sustained.

Kokuyo Camlin manufactures a variety of stationery products at its plants in Tarapur, Taloja and Patalganga in Maharashtra, and in Jammu. After the rights issue in fiscal 2014, the stake of Kokuyo & Co Ltd, Japan, went up to 70.66% from 50.74%. Currently, Kokuyo holds 74.44% stake.