Expert Analysis of the Global Macro Events & News affecting the Indian Markets – 19 Dec 2023
With over 300 million students and professionals relying on stationery products and various organizations demanding more printed materials as the economy expands rapidly, one must be curious about how the $10 billion stationery and printing sector in India is fulfilling these massive needs every year in this growing industry. Let’s find out more about the developments and strategies adopted in this important sector.
Stationery and printing sector in India – An Overview
The stationery and printing sector in India is valued at over $10 billion in 2023. It caters to the needs of over 300 million students and professionals across 1.7 million educational institutions and various offices. Stationery contributes 60% of the market led by notebooks, pens and pencils which account for estimated sales of $4 billion. Printing accounts for the remaining 40% and is one of the fastest growing segments, expanding at over 12% annually driven by increased corporate presentations, event collaterals and packaging printing needs in the growing economy.
Indian art and stationery market size
Currently, over 220 million students in India require stationery products like notebooks, pens and other materials to support their education. This student population is served by approximately 1.5 million schools across the country. Furthermore, as India’s economy expands rapidly, disposable incomes are rising significantly. This has led over 300 million consumers to shift their purchasing preferences towards higher quality, premium-branded stationery options which are catered by companies such as DOMS , Flair and Cello.
Key growth drivers include the nation’s expanding education infrastructure with the number of schools expected to increase by over 25% during this period. Government initiatives to achieve universal enrolment like the Sarva Shiksha Abhiyan program will also fuel additional stationery needs with projections of reaching $225 billion by 2025.
Global expected growth vs Indian expected growth
In 2000, the global stationery market was valued at approximately $50 billion annually. Pens accounted for over 25% of the market at $12.5 billion, while notebooks and paper products comprised another 30% at $15 billion. By 2020, the stationery market reached $110 billion in value, with the Asia Pacific region alone generating $60 billion in sales and accounting for 55% of global demand.
While the global stationery market has been growing at a steady pace of around 5% annually over the past decade, India has been outpacing this rate significantly. The Indian stationery industry reached a value of $4 billion in 2022 and is projected to expand at over 10% yearly to surpass $6 billion by 2025. This accelerated growth can be attributed to factors like rising disposable incomes, increasing education rates, and a thriving corporate sector in the country.
Covid effect and then post-covid
As the COVID-19 pandemic led to lockdowns and social distancing measures. It is estimated that global sales of notebooks, pens, folders and other educational stationery dropped by over 15% in 2020 compared to the previous year. The printing segment also witnessed a slump of nearly 25% as business events were canceled and corporate presentations moved to virtual formats.
India closely mirrored these global trends. With schools and colleges shut indefinitely across the country during the peak pandemic periods, the domestic stationery sector revenue fell by an unprecedented 30% in 2020.The printing industry declined even more sharply by 35% as widespread lockdowns brought economic activity to a standstill.
The Bounce Back in Demand
In India, the stationery and printing sectors saw demand surge in 2022 after the severe pandemic impacts. With schools and colleges reopening across the country after two years and employees returning to offices, the consumption of stationery items like notebooks, pens and other paper products grew over 25% compared to 2021 levels. The printing industry in India also bounced back with over 30% growth fueled by increased packaging needs, event printing, and other business requirements.
Boost from education policies and increasing literacy rates
As of 2023, India has experienced a notable surge in student enrollment, reaching an unprecedented high of 300 million, up from 260 million in the previous year. This surge has been complemented by a commendable rise in literacy rates, which now stand at an impressive 85%, up from nearly 80% in 2022. With consistent efforts, public investment in education has steadily risen from 4.2% of GDP in 2022 to an impressive 5% in 2023. Consequently, the annual education budget expanded from $40 billion to approximately $45 billion.
Three recent stationery IPOs and their overviews
The Indian capital markets have continued their robust momentum into 2023-2024, marking another exceptional IPO season. Companies in the stationery sector such as Flair Pens, Cello Pens, and DOMS Industries witnessed overwhelming oversubscription, reaching up to 93 times, predominantly fueled by enthusiastic participation from local retail investors.
Notably, IPOs commanded an average premium of 42% in the gray market, showcasing strong investor confidence. The fiscal year 2023-2024 has seen close to 52 IPOs take place successfully so far.
Listed stationery cos and their performance
Kokuyo Camlin has seen a small increase in market share recently but its sales CAGR of 7% over the past 3 years remains low. Navneet Education’s CAGR has also been lackluster at 4%. Meanwhile, Flair Writing has delivered stellar returns with a ROE of 31%. Natraj, Apsara and Kokuyo Camlin each control around ₹500 crores of the ₹4,000 crore Indian stationery market. However, DOMS Industries leads with a market share worth an estimated ₹700 crores, highlighting opportunities for continued growth across the sector.
With education spending and literacy rates rising continuously, the Indian stationery industry appears well-positioned to achieve further expansion in the coming years.
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