Pencil traces the story of a murder that occurs in a school, and the investigation that follows to find the killer.
Shiva (G. V. Prakash Kumar) is the best student at his school. His rival, Nithin (Shariq Khan), the son of a leading film star and a spoiled brat, takes any and every opportunity to knock him down both verbally and physically, and the two are known enemies amongst the other students.