Control Print Limited — Q1 FY26 earnings call

Call held 22 Jul 2025

Management summary

Control Print reported strong top-line growth in Q1 FY26, with standalone total revenue up 22.47% and consolidated operating revenue up 13.27%. However, consolidated EBITDA saw a 7.5% decline, primarily due to significant losses in the packaging business and higher expenses. The company is focused on turning around the packaging segment, achieving profitability in Track & Trace, and improving margins in its core Coding & Marking business through a recent price increase.

Highlights

  • Standalone total revenue for Q1 FY26 was ₹109 crores, a 22.47% growth from ₹89 crores in Q1 FY25.

  • Consolidated operating revenue for Q1 FY26 was ₹111 crores, up 13.27% from ₹98 crores in Q1 FY25.

  • The Coding & Marking business has capacity to generate ₹600 crores in revenue from the current ₹400 crores without additional CapEx.

  • The Track & Trace business is projected to be breakeven or profitable in FY26.

  • Management is targeting to reduce the cost per piece for mono dose packaging from ₹2 to ₹1.

Concerns

  • Consolidated EBITDA declined by 7.5% to ₹18.5 crores in Q1 FY26 from ₹20 crores in Q1 FY25.

  • The packaging business (CP Italy) incurred a loss of ₹4-5 crores abroad in Q1 FY26, contributing to consolidated margin pressure.

  • Logistics and installation challenges are delaying the full activation of V-Shapes machines.

  • Expiry of Guwahati GST benefit impacted Q1 FY26 by ₹1.5-2 crores.

Key financials

  1. Standalone Total Revenue ₹109 Cr +22.5%YoY
  2. Standalone Operating Revenue ₹100 Cr +13.6%YoY
  3. Consolidated Operating Revenue ₹111 Cr +13.3%YoY
  4. Consolidated EBITDA ₹18.5 Cr -7.5%YoY
  5. Employee Costs (% of Op. Rev.) 18%
  6. Depreciation (% of Op. Rev.) 4%
  7. Other Expenses (% of Op. Rev.) 13%

What they filed

Q1 FY27: revenue up 3.8%, net profit down 54.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue102 103 122 111 112 +10%119 +15%140 +15%116 +4%
EBITDA20 17 22 19 26 +28%18 +3%26 +19%15 −18%
Net profit13 8 67 9 19 +38%5 −36%11 −83%4 −54%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Standalone Revenue Mix (Q1 FY26)
    11% Printers62% Consumables12% Spares14% Services

Capital allocation

medium confidence
  • Capex ₹10 Cr
    • Pilot equipment for recyclable material R&D ₹10 Cr
    we might buy ₹10 crores to ₹15 crores of some pilot type of equipment for like lab, our lab lines because we need to [Technical Difficulty] testing

Guidance & targets

Packaging Business Cost

  • Mono dose packaging cost per piece Packaging Business Cost · by the time we manufacture it ourselves · Medium confidence ₹1

    From ₹2 today

    our cost per piece for a standard six to eight ml type of a mono dose is about 2. In general, we are targeting to get down to ₹1.

    — Shiva Kabra

Track & Trace Profitability

  • Track & Trace business profit/loss Track & Trace Profitability · FY26 · High confidence Breakeven or profitable
    this year should be breakeven, if not profitable.

    — Shiva Kabra

Packaging Business Loss

  • Packaging business annual loss Packaging Business Loss · FY26 · High confidence Less than ₹10 crores
    we're targeting a loss of less than ₹10 crores over the year.

    — Shiva Kabra

Packaging Business Profitability

  • Packaging business profit/loss Packaging Business Profitability · FY27 · Medium confidence Profitable
    I think that definitely next year, the Packaging business should be profitable

    — Shiva Kabra

Coding & Marking Capacity

  • Coding & Marking business revenue capacity Coding & Marking Capacity · High confidence ₹600 crores

    From ₹400 crores today

    we can go from about 400 crores, what we're doing right now to at least ₹600 crores without adding any types of CapEx or any significant manpower.

    — Shiva Kabra

Coding & Marking Growth

  • Coding & Marking business growth rate Coding & Marking Growth · next two, three years at least · Medium confidence 14-15%
    our overall target is to continue growing the Coding and Marking business at, say, whatever growth we're used to doing in the past, something similar like maybe 14%, 15%.

    — Shiva Kabra

What to watch in Q2 FY26

Packaging Business Profitability

Next quarter (for progress towards Q3/Q4 breakeven) and FY27.
Current Loss of ₹4-5 crores abroad in Q1 FY26.
Target Loss less than ₹10 crores for FY26, breakeven by Q3/Q4 FY26 for India business, profitable by FY27.

Why it matters

This business is currently a drag on consolidated margins, and its turnaround is key to overall profitability improvement.

The actual loss in the packaging business abroad was in the region of ₹4 crores to about ₹5 crores. So we are expecting that in this year, by Q3, Q4, we'll be at a breakeven maybe for that packaging business, and we're targeting a loss of less than ₹10 crores over the year.

Risks & concerns

  • Packaging Business Losses

    high

    The packaging business, particularly CP Italy, is incurring significant losses (₹4-5 crores abroad in Q1, targeting <₹10 crores for FY26) and higher expenses in India, impacting consolidated margins.

    Management acknowledged

  • V-Shapes Logistics and Installation Challenges

    medium

    Issues with machine installation, logistics, and 'niggling issues' are delaying the full activation of V-Shapes machines and impacting material sales.

    Management acknowledged

  • Increased Employee Costs

    medium

    Employee costs have increased due to hiring expensive personnel for new growth areas like Track & Trace and Packaging, contributing to overall expenses.

    Management acknowledged

  • Expiry of Guwahati GST Benefit

    low

    The GST benefit from the Guwahati plant has expired, resulting in an estimated impact of ₹1.5-2 crores on Q1 FY26.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Quantifiable milestones for recyclable packaging material debottlenecking (volume, target cost per pack). Direct
our cost per piece for a standard six to eight ml type of a mono dose is about 2. In general, we are targeting to get down to ₹1... we are still working on the recyclable part, and we still have to start the manufacturing of the material.

Clarifies the current cost and future target for a key strategic product, highlighting ongoing R&D and manufacturing setup.

Asked by Jay Chauhan

Consolidated margin drop and competitive pressure on V-Shapes. Direct
gross margins dropping, I don't think it was so much because of higher printer sales. I think it was more because of higher expenses that we incurred in the packaging business that so we're still making a loss in that business, a significant loss... there is no competitive pressure because as a patented technology.

Explains the primary reason for margin compression (packaging business losses) and clarifies the competitive landscape for V-Shapes.

Asked by Rushikesh

Expected losses in packaging business and Q1 FY26 performance. Direct
The actual loss in the packaging business abroad was in the region of ₹4 crores to about ₹5 crores. So we are expecting that in this year, by Q3, Q4, we'll be at a breakeven maybe for that packaging business, and we're targeting a loss of less than ₹10 crores over the year.

Provides specific figures for packaging business losses and a clear target for reduction, addressing a key concern about profitability.

Asked by Madhur Rathi

Capacity utilization and CapEx plans. Direct
In the Coding and Marking business, I think we can go from about 400 crores, what we're doing right now to at least ₹600 crores without adding any types of CapEx or any significant manpower. So I think we have that much [Technical Difficulty] in what we have right now. In terms of CapEx... we might buy ₹10 crores to ₹15 crores of some pilot type of equipment for like lab, our lab lines.

Gives insight into existing capacity headroom in the core business and specific CapEx plans for R&D in new areas.

Asked by Kumar Saurabh

V-Shapes business profitability (machines vs materials) and breakeven timeline. Direct
The profit is higher in the machines in this business. The profit is higher in the machines than the materials... we're struggling a little bit with the whole logistics and the final installation... we want to get the material cost down to ₹1, which we can do when we manufacture it in-house.

Details the current profitability dynamics of the V-Shapes business and the challenges in scaling, linking material cost reduction to in-house manufacturing.

Asked by Keval Shah

GST benefit on plant and its impact. Direct
the Guwahati benefit is over... I think it was close to ₹10 crores, 12 crores a year... about maybe ₹1.5 crores of impact on Q1. So that was already there. ₹1.5 crores, ₹2 crores in Q1.

Quantifies the impact of a specific regulatory change on Q1 financials.

Asked by Disha

Consolidated growth and EBITDA margin guidance. Evasive
We don't have any guidance. But like I said, overall, some of the variation -- like I think the Coding and Marking business is steady. Some of the variations are caused by investments in especially the Packaging business too and both abroad and in India and Asia.

Management explicitly declines to provide consolidated guidance, indicating ongoing volatility from new investments.

Asked by Rahil

Worst for margins being over and R&D lab expense for V-Shapes. Partial
I think that we believe that, obviously, we've taken some amount of losses in the next few quarters are going to be better. So things are going to improve... I'd rather say like let's wait three quarters and everyone finds out what's going to happen... whatever R&D we do, which is more based on people, prototypes and stuff we expense it on.

Management expresses optimism for margin improvement but defers specific commitments, and clarifies R&D expenses are mostly expensed, not capitalized.

Asked by Keval Shah

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Control Print reported a standalone total revenue of ₹109 crores in Q1 FY26, marking a 22.47% growth from ₹89 crores in Q1 FY25. Standalone operating revenue also increased by 13.64% to ₹100 crores from ₹88 crores. On a consolidated basis, operating revenue grew 13.27% to ₹111 crores from ₹98 crores in the previous year's corresponding quarter. However, consolidated EBITDA experienced a 7.5% decline, settling at ₹18.5 crores compared to ₹20 crores in Q1 FY25, primarily due to higher expenses in the packaging business.

Packaging Business Challenges and Outlook

The packaging business, particularly through CP Italy (V-Shapes), is currently a drag on profitability, incurring an actual loss of ₹4-5 crores abroad in Q1 FY26. Management aims to reduce the annual loss for this segment to less than ₹10 crores for FY26 and targets overall profitability by FY27. The segment faces challenges related to logistics, machine installation, and 'niggling issues' that have prevented some machines from becoming fully active, impacting material sales.

Coding & Marking Business Strategy and Capacity

The core Coding & Marking business is projected to maintain a growth rate of 14-15% over the next two to three years. The company estimates that its current capacity can support revenue generation of up to ₹600 crores, an increase from the current ₹400 crores, without requiring significant additional CapEx or manpower. To address a slight drop in gross margins, a price increase was announced, effective August 1st, with its positive impact expected to be visible from Q3 FY26.

Track & Trace Segment Progress

The Track & Trace business is showing improved performance and is anticipated to achieve breakeven or become profitable during FY26. The company is actively working with two major customers for solution rollout, leveraging its three key patents and digital printing technologies to provide comprehensive solutions. This segment is considered a key growth initiative for Control Print.

Recyclable Packaging Material Development

Control Print is investing in the development of fully recyclable packaging materials, with a strategic goal to reduce the cost per piece for mono dose packaging from the current ₹2 to ₹1. This cost reduction is dependent on establishing in-house manufacturing capabilities for the material. The company plans an initial CapEx of ₹10-15 crores for pilot equipment and lab lines to facilitate this R&D and manufacturing setup.

International Subsidiaries Performance

The international subsidiaries contribute to the consolidated performance. Markprint, focused on digital printing, is profitable with revenues around €2 million and is growing its ink business. Codeology, an end-of-line automation provider, is also profitable, contributing approximately £1.3 million. CP Italy, which houses the V-Shapes business, is currently loss-making due to ongoing investments and integration challenges.

Cost Structure and Employee Expenses

In Q1 FY26, employee costs accounted for 18% of the operating revenue, depreciation was 4%, and other expenses stood at 13%. The increase in employee costs is attributed to hiring specialized and expensive personnel for new growth areas like Track & Trace and Packaging. Management indicated that a significant increase in overall headcount is not expected going forward, with a focus on optimizing existing staff.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Information Technology earnings calls