💰 Financial Performance

Revenue Growth by Segment

Coding and Marking remains the dominant segment, contributing 89% of total revenue. Within this segment for Q2 FY26, the revenue mix consists of Consumables (60%), Services (16%), Printers (14%), and Spares (9%). Standalone revenue for H1 FY26 grew 13.5% to INR 210 Cr from INR 185 Cr in the previous year.

Geographic Revenue Split

The company primarily operates in India with a market share exceeding 18%. It has expanded internationally through its Italian operations, V-Shapes, and subsidiaries like Control Print B.V. and Mark Print B.V. in the Netherlands, though specific regional percentage splits are not disclosed.

Profitability Margins

Gross margins have fluctuated between 56.2% and 61.6% over recent quarters. Standalone PAT margin for Q2 FY26 improved by 214 bps YoY to 19.50%, while PBT margin (excluding exceptional items) stood at 22.49%.

EBITDA Margin

Standalone EBITDA margin reached a record high of approximately 28% in H1 FY26, driven by operational leverage as SG&A expenses grew at a slower rate than business volume. Consolidated EBITDA margin for FY24 was 24.23%, a slight moderation of 101 bps due to asset acquisition expenses.

Capital Expenditure

The company received a grant of INR 3.99 Cr under the Central Capital Investment Incentive for Access to Credit (CCIIAC) in H1 FY26. While specific future CapEx figures are not detailed, the company is investing in technology platforms for Track & Trace and QRiousCodes.

Credit Rating & Borrowing

CRISIL maintains a 'Stable' outlook with a robust financial risk profile. Interest coverage was 56.44 times in FY23. The company maintains low gearing with a Total Outside Liabilities to Adjusted Tangible Networth (TOL/ANW) ratio of 0.30 as of March 31, 2024.

⚙️ Operational Drivers

Raw Materials

Industrial inks, solvents, and electronic components for printers. Consumables (inks/solvents) represent the largest cost component, contributing to 60% of the revenue mix.

Import Sources

Not specifically disclosed, though the company has subsidiaries in the Netherlands and Italy (V-Shapes) suggesting European sourcing or technology integration.

Capacity Expansion

The company has an installed base of over 21,500 printers as of Q2 FY26, which serves as a captive market for high-margin consumable sales. Expansion is focused on increasing this installed base to drive recurring revenue.

Raw Material Costs

Raw material costs are managed through procurement tracking; however, the shift toward high-margin consumables (60% of revenue) and laser printers has improved overall margin quality.

Manufacturing Efficiency

Operating efficiency is reflected in a healthy Return on Capital Employed (RoCE) of 21-25% over the past three fiscals through FY24.

Logistics & Distribution

The company emphasizes high-quality service and timely delivery to maintain relationships with key FMCG and industrial clients, though specific logistics costs as a % of revenue are not provided.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth is targeted through increasing the installed printer base (currently >21,500 units) to lock in recurring consumable sales, which grow at 15% compared to the market rate of 10-11%. The company is also scaling its Track & Trace (T&T) division, which has reached breakeven, and investing in new technology platforms like QRiousCodes.

Products & Services

Industrial printers (Continuous Inkjet, Thermal Transfer, Laser), consumables (inks and solvents), spare parts, and maintenance services.

Brand Portfolio

Control Print, QRiousCodes, V-Shapes.

New Products/Services

Laser printers (higher margin products), Track & Trace technology platforms, and QRiousCodes business which is currently moving toward breakeven.

Market Expansion

Expansion into the Italian market via V-Shapes and focusing on high-growth domestic sectors like Dairy, Sugar, Plywood, and Cement.

Market Share & Ranking

One of the largest players in India with a market share of more than 18%.

Strategic Alliances

Acquisition of V-Shapes in Italy and consolidation of subsidiaries LCPL, ICPL, CPBV, and MPBV.

🌍 External Factors

Industry Trends

The coding and marking industry is growing at 10-11% annually. Trends are shifting toward 'Track & Trace' and QR-based coding for anti-counterfeiting and supply chain transparency, where Control Print is positioning its T&T and QRiousCodes divisions.

Competitive Landscape

Competes with global players in the industrial printing space, maintaining leadership in specific Indian niches like cement, plywood, and dairy.

Competitive Moat

The moat is built on a 'Razor and Blade' model: an installed base of 21,500+ printers creates a high-switching-cost environment for consumables (60% of revenue). This is sustained by a strong service network and 25+ years of promoter experience.

Macro Economic Sensitivity

Highly sensitive to industrial production and packaging sector growth, particularly in the four broad segments of the packaging industry including pharmaceuticals.

Consumer Behavior

Increased regulatory requirements for product traceability in food and pharma are driving demand for more sophisticated coding solutions.

Geopolitical Risks

Exposure to European markets through Dutch and Italian subsidiaries makes the company sensitive to EU trade regulations and economic stability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are influenced by packaging regulations in the pharmaceutical and food sectors which mandate specific coding and marking standards.

Taxation Policy Impact

Effective tax rate is implied by the difference between PBT (INR 26.5 Cr) and PAT (INR 21.2 Cr) for Q2 FY26, roughly 20%.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty involves the successful scaling of new technology projects (Track & Trace) and the integration of international acquisitions like V-Shapes.

Geographic Concentration Risk

Significant concentration in the Indian market (82% implied by market share context), though diversifying through European subsidiaries.

Third Party Dependencies

Dependency on specialized component suppliers for printer manufacturing, mitigated by high inventory levels.

Technology Obsolescence Risk

Risk of shift from traditional inkjet to laser or digital coding; company is mitigating this by increasing its laser printer portfolio and margin mix.

Credit & Counterparty Risk

Receivables quality is supported by a blue-chip client base (HUL, Tata Steel, ITC), reducing default risk.