Stock Review: Linc Pen

Linc Pen is exact proxy to Camlin . Now what happened in Camlin is that the foreign players actually entered into the stock and has given a market cap to sales ratio multiple of almost 1.6 times which triggered an open offer. They were ready to pay Rs 110 a share for the 20% mandatory open offer.

From that perspective, the market cap to sales ratio for this particular company Linc is 0.25-0.3 times approximately. That means there is a chance of rerating in terms of market cap to sales ratio going forward.

Their Q1 performance was dismal and the stock currently in a battered shape. I think the worst case scenario would be around at Rs 56-58, from where people who are serious investors can definitely look into this particular stock. The main reason for the de-growth in terms of net profit is because of aggressive expansion plan and advertisement. They have actually hired Shahrukh Khan as their brand ambassador and that's talking a toll on their profits.

Going forward, looking at the way the company is foraying into the retail space, I think this will be a good proxy in the longer term to Camlin. They also have a joint venture with Mitsubishi so there is again a chance that a foreign promoter can come in this particular company which will raise the stocks significantly. Going through the same mathematics, I think the stock can easily touch Rs 95-100 in the next 15 months.