Concall AI

Control Print Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Control Print delivered strong standalone revenue growth in Q3 and 9M FY26, primarily driven by its robust core coding and marking business. However, consolidated profitability was challenged by ongoing losses in foreign subsidiaries, particularly the Italian packaging operations, and increased employee-related provisions. The company is actively addressing these issues, with specific breakeven targets set for its packaging segments and ongoing efforts to optimize costs and finalize strategic deals.

Highlights

9M FY26 Revenue reached INR 322 crores, a 15% increase from INR 280 crores in 9M FY25.
Q3 FY26 Operating Revenue was INR 109 crores, marking a 16% YoY growth from INR 94 crores in Q3 FY25.
The core Coding and Marking business is growing at 14%, outperforming the market's 10% growth, and reported 21% YoY EBITDA growth.
PBT, excluding exceptional items, showed a strong 35% Y-o-Y growth.
Demand for the packaging business is increasing in both India and Italy, with management reporting improved execution capabilities for orders.

Concerns

Consolidated profits were lower due to significant losses from foreign subsidiaries, particularly the Italy-based V-Shapes packaging business, which is a major loss-making entity.
Employee costs increased by approximately INR 5 crores in Q3 due to new labor code provisions (gratuity, staff incentives) and higher business promotion/travel expenses.
PAT growth was lower at 19% due to a higher tax provision in the quarter.
Execution issues and delays in shipping new packaging machines impacted revenue recognition in Q2 and Q3.

Key financials

3 periods

Headline

COGS (% of Op. Revenue)
41%
Gross Margin (Standalone)
58.1%
EBITDA Growth
21%
PBT Growth (ex-exceptional)
35%
PAT Growth
19%

Q3 FY26

Operating Revenue
₹109 Cr
YoY +16%

9M FY26

Revenue
₹322 Cr
YoY +15%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	102	103	122	111	112 +10%	119 +15%	140 +15%	116 +4%
Expenses	82	86	100	93	86	101	114	100
EBITDA	20	17	22	19	26 +28%	18 +3%	26 +19%	15 −18%
Margin	20%	17%	18%	17%	23%	15%	19%	13%
Other income	2	0	4	4	1	0	1	0
Interest	1	1	1	1	1	1	2	1
Depreciation	4	4	4	4	5	5	5	5
Profit before tax	17	12	21	18	22 +26%	13 +5%	20 −4%	10 −45%
Tax rate	22%	32%	-213%	52%	14%	59%	45%	60%
Net profit	13	8	67	9	19 +38%	5 −36%	11 −83%	4 −54%
EPS	8.62	5.17	41.67	5.21	11.62	3.29	7.00	2.45

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

Coding and Marking
92% Share of Business18% Printers Revenue Share (Q3)58% Consumables Revenue Share (Q3)7% Spares Revenue Share (Q3)15% Services Revenue Share (Q3)

Order book

medium confidence

Execution

remaining machines to be shipped in Q4 FY26 and Q1 FY27

Pipeline

deal pipeline tcv

pipeline being generated for new machines, laminates and co-packing

The company has a backlog of packaging machine orders due to execution issues but expects to ship remaining machines in Q4 FY26 and Q1 FY27.

Source: Prepared remarks

Capital allocation

high confidence

Capex Capex disclosed
- Development of homopolymer for packaging material and its manufacturing
- R&D and other projects
nothing major as planned for the core coding and marking, which Shiva has also mentioned, because we are at the moment running at about 65% to 70% of our capacity. So we don't foresee anything like a major CapEx in the coding and marking. So I don't think that fundamentally, the CapEx is required. There is some CapEx that we are doing in terms of the development of the homopolymer for the packaging material, and its manufacturing and certain other things. But we don't expect either. We don't expect for our coding and marking, digital printing, track and trace business, there's no CapEx needed. The capital investment out here is the R&D, frankly speaking, and whatever projects we do on those fronts.
M&A Codeology Group Acquisition · Integrated

Consolidated Codeology Group had a loss of about 147,000 pounds for 9M FY26.

So for Codeology, I mean, the entire consolidated Codeology Group, we are having a loss of about 147,000 pounds as of now.
M&A Markprint Acquisition · Integrated

Markprint generates profits, though not a great position, and its business scale can be improved.

And for Markprint, I mean, it's a good position, though not a great position. Markprint generates profits. So we are not overly worried about that. However, the scale of business can definitely be improved for Markprint.
M&A V-Shapes (Italy business) Acquisition · Integrated

Major loss-making entity, expected to breakeven in Q3 and Q4 FY26.

The major losses are coming from Italy. You're right, correct.
Liquidity Liquidity disclosed Cash flow is probably higher than INR 50 crores, with INR 15 crores paid annually as dividends.

The cash flow is probably higher than INR50 crores. I'm not sure what it is. Jaideep will give you a better number. But yeah, I think we continue to maintain that, I think.

Guidance & targets

Profitability

Italy Packaging Business Breakeven Profitability · Q3 and Q4 FY26 · High confidence Breakeven

in Q3 and Q4 of this coming year, I expect Italy to be breakeven.

— Shiva Kabra
India Packaging Business Profitability Profitability · Q1 FY27 · High confidence Profitable

Indian business in packaging will be breakeven at least in Q1 and Q2 and profitable by Q3 and Q4.

— Shiva Kabra
Overall Packaging Business Breakeven Profitability · FY27 · Medium confidence Breakeven

I'm hoping that next year, the packaging business as a whole will be breakeven if I combine it across India and Italy and even the UK and so on.

— Shiva Kabra

Revenue

Coding & Marking Business Growth Rate Revenue · Next year or two · Medium confidence 14-15%

we're growing at 14%, that's still quite profitable for us... maybe in the next year or two... we may be able to grow it faster than the market, like about 15% growth rate.

— Shiva Kabra

Business Development

Pharma Pilot Deals Closure Business Development · Q3 FY26 · Medium confidence Finalized

we are trying to close that hopefully in this quarter.

— Shiva Kabra

Product Development

Pilot line for recyclable material commissioning Product Development · April-May 2026 · High confidence Operational

the line itself will only be delivered in March and probably by the time it's commissioned, it's going to be like April or May.

— Shiva Kabra

Cost Management

Overheads Optimization Cost Management · Q4 FY26 · High confidence Better results

in the Q4, we'll make sure the results are better in terms of the overheads as well.

— Jaideep Barve

What to watch in Q4 FY26

Italy Packaging Business Breakeven

Q4 FY26

Current Major loss-making entity

Target Breakeven

Why it matters

Crucial for improving consolidated profitability and reducing the drag from foreign subsidiaries.

in Q3 and Q4 of this coming year, I expect Italy to be breakeven.

Risks & concerns

Continued losses in foreign subsidiaries (Italy packaging)
high

The Italy-based V-Shapes packaging business is a major loss-making entity impacting consolidated results, though breakeven is targeted for Q3/Q4 FY26.

Management acknowledged
Execution issues and delays in packaging machine shipments
medium

Technical niggling issues delayed packaging machine shipments in Q2/Q3, impacting revenue recognition, but remaining machines are expected to ship in Q4 FY26 and Q1 FY27.

Management acknowledged
Increased employee costs due to new labor code and provisions
medium

Employee costs rose in Q3 due to new labor code provisions (gratuity, staff incentives) and higher business promotion/travel expenses, with an estimated INR 5 crores impact, though management committed to optimizing costs.

Management acknowledged

Q&A highlights

7 direct

Foreign subsidiaries' performance and consolidated profits Direct

what's happened is that we had, you know, we've come up with a new model, a new machine, a new packaging machine in Italy. But -- okay, so what happened in the past, I'll explain it to you. It's a long story. The reason why -- a lot of these machines were sold in the past. And I think that the quality control and that, you know, getting from a 90% machine to 100% machine takes a little bit of more effort.

Addresses the core reason for lower consolidated profits, highlighting execution challenges and R&D costs in Italy.

Asked by Saket Kapoor

Impact of new labor code on employee costs Partial

employee costs have risen in the Q3 as compared to the Q2. And that is basically a result of adjustment of provisions. So you are aware of the new labour code, which has been mandatorily applied. So since 21st of November, now we are under the new regime of the new labour code. So as per the mandate given, we have to absorb all the past service costs also. So we had a major impact because of the gratuity provision. And also we made some kind of staff incentive provision.

Clarifies the reason for increased employee costs, a key factor in margin compression, and highlights a specific financial impact (INR 5 crores).

Asked by Rushikesh Bhise

Threat of laser printers to consumables business Direct

The first thing is they don't work on all materials... The second thing is they don't give a contrast... The third issue with, for our own purpose, in terms of the laser business, it's a different model, because there are less people, so the cost is less, because you also need less of a service thing... there's a big safety issue with lasers, specifically when you mentioned pipes, or all chlorinated compounds or halogenated compounds... it will create a chemical reaction on the surface.

Provides a comprehensive technical and business rationale for why laser printers are not seen as a major threat, reassuring investors about the core business model.

Asked by Vikram Hirawat

Market share growth in an oligopoly Direct

it's a very sticky business and we have actually grown our market share slowly over the last few years. But because it's a sticky business, it's difficult for the competitors to take our customers and for us to take our competitors' customers. So it happens, but it's a bit of a slower business. But technology-wise, I think we've got the best product stack right now, definitely.

Explains the challenges and strategies for market share gains in a mature, sticky market, emphasizing product quality and non-CIJ segments.

Asked by Shubham Jain

Status of Pharma pilot projects and deal finalization Direct

pilots are sort of over. But there's a lot of negotiation going on right now. Some contractual elements to the negotiation, it's not just a commercial negotiation, there's also legal aspects to it. So we are in the process of trying to finalize those deals. But it's one of those things that we have to go carefully because it's -- this is not a regular type of a sale of product. This is a patented technology we are giving and there are certain restrictions... we are trying to close that hopefully in this quarter.

Indicates progress on high-value, patented technology deals, which could be a significant growth driver, with a specific timeline for closure.

Asked by Shubham Jain

Packaging business performance and breakeven timelines Direct

packaging business, even in India and Asia, is loss making as of right now... in Italy and stuff like that, we have a much bigger losses... I expect Italy to be breakeven... in Q3 and Q4 of this coming year [FY26]... Indian business in packaging will be breakeven at least in Q1 and Q2 and profitable by Q3 and Q4 [FY27].

Provides clear financial targets and timelines for the turnaround of the loss-making packaging segment, which is crucial for consolidated profitability.

Asked by Vinit Thakur

Track & Trace business strategy and differentiation Direct

Our solution is quite different to what they're doing... we are focused more on meeting the compliance needs like them, but also using our printing capabilities, our software capabilities and other stuff to offer a more comprehensive solution to those pharmaceutical customers, so they can tackle other business issues of theirs.

Explains the company's strategic positioning in the track & trace market, aiming for a more comprehensive, value-added solution rather than just basic compliance.

Asked by Madhur Rathi

Scaling Codeology's print and apply solutions in India Direct

I'm in the Nalagarh factory right now, and the Codeology team is here and they've come specifically to give the training on the entire print and apply, manufacturing and setup. So it was a bit delayed, but now we expect to really go ahead and move on it... we'll be in a much better position to actually execute and start selling the solution to customers rather than being a hypothetical tool in our kit.

Shows concrete steps being taken to integrate and localize acquired capabilities, essential for realizing synergies and expanding product offerings in India.

Asked by Madhur Rathi

3 min read 7 chapters

Detailed narrative

Robust Standalone Performance and Core Business Growth

Control Print demonstrated strong standalone performance in Q3 and 9M FY26. The company reported a total revenue of INR 322 crores for 9M FY26, reflecting a 15% year-on-year growth from INR 280 crores in the previous fiscal year. Q3 FY26 operating revenue reached INR 109 crores, an increase from INR 94 crores in the corresponding period of FY25. The core coding and marking business, which constitutes 92% of the total business, continues to be a key growth driver, expanding at 14% against a market growth rate of 10%, and contributing to a 21% YoY EBITDA growth.

Challenges in Consolidated Profitability and Foreign Subsidiaries

Despite strong standalone results, consolidated profits were impacted by losses from foreign subsidiaries. The Italy-based V-Shapes packaging business was identified as the major loss-making entity, and the consolidated Codeology Group reported a loss of 147,000 pounds for 9M FY26. Management attributed these challenges to execution issues with new packaging machines and the expensing of global R&D costs (approximately EUR 800,000) entirely within the Italian entity, which distorts its reported performance.

Increased Employee Costs and Cost Optimization Efforts

Employee costs rose significantly in Q3 FY26, primarily due to adjustments for new labor code provisions, including gratuity and staff incentive provisions, which had an estimated impact of INR 5 crores. Additionally, other expenses, such as business promotion and travel, also increased. Management acknowledged these cost pressures and committed to implementing cost control measures and optimizing overheads in Q4 FY26 to improve profitability.

Packaging Business Turnaround and Execution Focus

The packaging business, currently operating at a loss in both India and Italy, is a strategic focus for turnaround. Management expects the Italy packaging business to achieve breakeven by Q3/Q4 FY26, while the Indian packaging business is targeted to become profitable by Q1 FY27. The company is actively resolving technical issues that led to delays in packaging machine shipments in Q2 and Q3, with remaining machines expected to be dispatched in Q4 FY26 and Q1 FY27 to mitigate losses.

Strategic Development in Track & Trace and Patented Technology

Control Print is making strategic advancements in its track and trace and digital printing businesses. The company is in the final stages of negotiating and closing high-value, patented technology deals with pharmaceutical companies, with an expected closure in Q3 FY26. The strategy for track and trace focuses on offering comprehensive, value-added solutions beyond basic compliance, leveraging printing and software capabilities to address broader customer business issues.

Product Innovation and Local Manufacturing Initiatives

The company is investing in product innovation, particularly in developing a single polymer recyclable material. A pilot line for this material is currently undergoing final trials and is slated for delivery in March and commissioning by April or May. This initiative aims to enable local manufacturing of cheaper, recyclable materials, which is expected to enhance margins in the packaging segment. Control Print has also filed patent extensions for various packaging materials and formats to strengthen its intellectual property.

Outlook and Capital Allocation Priorities

Control Print projects its core coding and marking business to maintain a growth rate of 14-15% over the next one to two years. While no major capital expenditure is planned for the core business due to current capacity utilization of 65-70%, some CapEx is directed towards the development and manufacturing of packaging materials. The company generates INR 50-60 crores in cash flow, with an annual dividend payout of INR 15 crores, and remains open to considering strategic acquisitions.

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

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