Kokuyo Camlin Ltd Q2 FY26 – The “Inkcredible” Comeback Story After a ₹22.7 Cr Inventory Thriller
1. At a Glance
Once the childhood sweetheart of every Indian stationery kit, Kokuyo Camlin Ltd (KCL), has recently been in the news for all the wrong reasons — a forensic audit, GST penalties, and enough internal drama to make a Netflix docuseries titled “The Missing Inventory: Tarapur Tales.”
Despite the turbulence, the company’s Q2 FY26 numbers managed to draw attention: Revenue ₹174.4 crore, PAT ₹7.86 crore, and an OPM of 9.25% — a comeback from the negative operating margin quarters that had analysts sharpening their pencils. The market, however, seems to be testing its patience — stock price ₹105, market cap ₹1,053 crore, P/E 58x, and ROE a modest 1.95%.
From a 6.48% operating margin (FY25) to a somewhat stable 9.25% this quarter, KCL’s turnaround arc looks promising, though investors are still haunted by the ₹22.7 crore inventory “disappearance.”
Imagine if your childhood art box suddenly declared bankruptcy. That’s pretty much Kokuyo Camlin’s FY25 story.
Founded in 1946, KCL was once the undisputed champion of every schoolbag, owning iconic brands like Camel and Camlin — a legacy inked deep into Indian childhood nostalgia. Fast-forward to 2025, and the company found itself dealing not with crayons, but forensic accountants from PwC uncovering an inventory discrepancy of ₹22.7 crore at its Tarapur plant.
As of Q2 FY26, the company has tried to turn the page, writing off the entire impact, cleaning the slate, and implementing PwC’s internal control recommendations. Management claims “no further losses expected” — which, to investors, sounds like a teacher saying, “This won’t happen again, beta.”
Still, it’s hard not to admire the resilience. The company with over 3 lakh retail touchpoints and 2,500 SKUs continues to hold one of the widest stationery networks in India. Add to that zero pledged shares, debt of just ₹11.7 crore, and a Japanese parent (Kokuyo Co. Ltd) owning ~75%, and you get a company that refuses to fade into the notebook margins.
3. Business Model – WTF Do They Even Do?
Kokuyo Camlin’s business is divided neatly between two identities — Camlin, the Indian school hero, and Camel, the artist’s muse.
The Camlin side of the empire deals in the mass market — pencils, erasers, geometry boxes (like the newly launched Scholar+ and Scholar Basics), markers, and adhesives. It’s your typical stationery battlefield where cost efficiency meets nostalgia.
The Camel brand, on the other hand, caters to art enthusiasts and professionals — with product lines across fine art, hobby colors, brushes, canvases, and painting kits.
The FY24 segmental revenue split reads like an artist’s color palette:
Fine Art & Hobby – 17%
Ink & Adhesives – 5%
Office & Scholastic – 28%
Paper Stationery – 15%
Technical Instruments – 7%
Writing Instruments – 28%
If you’ve ever used a Camel brush or a Camlin compass box, you’ve contributed to one of these buckets.
The Japanese parent, Kokuyo Co. Ltd, brings global design and efficiency practices to the table, while KCL’s Indian operations provide deep distribution reach — plants in Tarapur, Patalganga, and Samba (Jammu) cater to 324, 800, and 393 SKUs respectively.
In short: they make everything you ever owned in your schoolbag, except good margins.
4. Financials Overview
Source table
Metric
Latest Qtr (Sep’25)
Same Qtr LY (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue (₹ Cr)
174.38
172.51
227.39
1.08%
-23.3%
EBITDA (₹ Cr)
16.13
-7.60
19.63
—
-17.8%
PAT (₹ Cr)
7.86
-10.63
10.06
—
-21.9%
EPS (₹)
0.78
-1.06
1.00
—
-22.0%
Commentary: From negative profits in the same quarter last year to ₹7.86 crore this quarter — that’s a 174% YoY improvement, or as analysts would say, “a turnaround you can actually color within the lines.”
Annualized EPS stands at ₹3.12, implying a P/E of ~33x on run-rate earnings — less scary than the 58x trailing.
5. Valuation Discussion – Fair Value Range Only
Method 1: P/E Based Approach
Assume industry average P/E = 29x (per screener dump). Annualized EPS = 0.78 × 4 = ₹3.12
Fair value range = 25x to 35x × 3.12 = ₹78 to ₹109
