39% upside! Nirmal Bang says 'Buy' this stationery stock; long-term growth story intact

Nirmal Bang Institutional Equities has suggested a 'Buy' recommendation on Flair Writing Industries Ltd with a target price of Rs 389, suggesting a 39 per cent potential upside. The brokerage said exports disruptions are temporary and the long term growth story for Flair Writing is intact. 

Nirmal Bang said its interaction with the company management reinforced its view on the ongoing transformation of Flair from a traditional writing instruments company into a diversified branded consumer products platform.

While the core pens business continued to provide stable cash flows, the next leg of growth is expected to be driven by creative stationery and steel bottles, with the management targeting overall 15 per cent growth and 18 per cent Ebitda margins, supported by increasing own-brand contribution, manufacturing integration and category diversification.

Nirmal Bang said Flair Writing's March quarter exports were affected by geopolitical disruptions with Rs15–20 crore impact on revenue;. While some residual impact is expected in early Q1FY27, the management does not anticipate any structural demand disruption and has maintained its growth outlook, Nirmal Bang said.

Nirmal Bang said the Flair management indicated that Creative & Stationery plus Steel Bottles/Houseware could together contribute nearly 50 per cent of revenues over the next two-three years, implying a significant diversification away from the traditional pens business.

The company was a third-party manufacturer for Reynolds, which contributed only 2–3 per cent of revenue, and Reynolds-related revenues have been fully excluded since Q3FY26. The management reiterated that it had no strategic interest in acquiring Reynolds, given the strength of its existing portfolio across key price points, Nirmal Bang said.

"The Surat facility, initially established for polymers and mechanical pencils, has been expanded to manufacture wooden pencils, with production already underway. This initiative strengthens Flair’s positioning in the scholastic stationery segment and enhances backward integration capabilities," it said.