Control Print

Control Print reported a consolidated operating revenue of ₹111 crores for Q1 FY26, marking a 13.26% year-over-year growth from ₹98 crores in Q1 FY25. Standalone total revenue also saw robust growth, increasing 22.47% YoY to ₹109 crores from ₹89 crores in the prior year. However, consolidated EBITDA experienced a 7.5% decline, falling to ₹18.5 crores from ₹20 crores in Q1 FY25, primarily due to higher expenses in new business segments. The company also recorded an exceptional income of ₹3.99 crores from a capital subsidy related to the Mask Lab.

The packaging business, particularly CP Italy (V-Shapes), continues to be a drag on profitability, reporting a loss of €384,000 (approximately ₹3.45-5 crores) in Q1 FY26. Management aims to reduce the annual loss for this segment to less than ₹10 crores for FY26 and achieve profitability by FY27. Key challenges include delays in machine installations and supplies, difficulty in re-engaging customers who switched to older packaging post-acquisition, and high costs of imported materials (currently ₹2 per piece). The long-term strategy involves investing ₹10-15 crores in R&D and pilot equipment to develop and manufacture fully recyclable materials in-house, targeting a cost reduction to ₹1 per piece.

The core coding and marking business remains a strong performer, with management targeting an annual growth rate of 14-15% over the next 2-3 years. Despite some margin pressure in Q1, a price increase effective August 1st is expected to lead to margin improvements from Q3 FY26. The company believes it has significant capacity headroom, capable of increasing revenue from the current ₹400 crores to ₹600 crores without requiring substantial additional CapEx or manpower, indicating efficient utilization of existing infrastructure.

Control Print's new business initiatives, including Track and Trace and recent acquisitions, are progressing. The Track and Trace business is projected to achieve breakeven or profitability in FY26. Acquisitions like Markprint and Codeology are contributing positively, with Markprint reporting Q1 revenue of €413,000 and a 20% net profit margin, and Codeology reporting Q1 revenue of £283,000 with a profit of £13,000. The company is focusing on securing and rolling out solutions with two major large customers for Track and Trace and expanding sales networks in Asia Pacific and Europe for its packaging solutions.

The company's cost structure in Q1 FY26 showed cost of goods sold at 43% of operating revenue, employee costs at 18%, depreciation at 4%, and other expenses at 13%. The decline in consolidated EBITDA is primarily attributed to higher expenses incurred in the packaging business and costs associated with developing the Asia Pacific business directly from India. Management expects margin improvement in the core coding and marking business from Q3 FY26 due to a recent price increase, aiming to offset some of the pressures from new business investments.