Control Print

Control Print reported a consolidated revenue of INR 484 crores for FY26, marking a 12.3% increase from INR 431 crores in FY25. The consolidated operating revenue stood at INR 482 crores, up from INR 425 crores in the prior year. Standalone revenue for Q4 FY26 demonstrated strong growth, reaching INR 138 crores, a 21% increase compared to INR 114 crores in Q4 FY25. For the full year FY26, standalone revenue was INR 446 crores, up from INR 385 crores in FY25. The cost of goods sold on a consolidated basis improved to 40% of operating revenue from 42% last year, while employee costs increased to 23% from 21%.

The company is pursuing a conscious strategy to move beyond its traditional coding and marking business by investing in IP-differentiated solutions. This involves developing proprietary technology for digital printing, Track and Trace, and packaging. Management believes this approach, though requiring a longer investment cycle, is essential for the long-term health and growth of the company, aiming to build platforms with highly differentiated intellectual property. This strategic pivot is intended to create new avenues for growth and reduce reliance on licensing external technologies.

The packaging division abroad, primarily V-Shapes (CP Italy), continues to be the main contributor to consolidated losses. For FY27, a loss of approximately EUR 1.5 million is projected, an improvement from EUR 2-2.5 million in the previous year. Challenges include delays in stabilizing machines and material development, as well as issues with shipping existing inventory due to design changes and stringent quality control requirements. Management is committed to ensuring the product meets internal standards before release, aiming for V-Shapes to reach breakeven this year.

Control Print is a relatively late entrant into the Track and Trace market, which is estimated to be around INR 500-600 crores. The company is focusing on offering a highly differentiated solution, with pilot projects currently underway with two of India's largest pharmaceutical companies. Successful completion of these pilots is expected to lead to a significant rollout and broader market adoption. Management anticipates the Track and Trace business to become breakeven or profitable this year (FY27), contributing to overall company performance.

A new UNNATI factory is being established in Guwahati with the primary goal of significantly reducing the cost of packaging materials, by approximately 40%. This cost reduction is expected to make the company's packaging solutions highly competitive, potentially lowering per-pack costs from INR 2.5 to INR 1.5, or from INR 1 to INR 0.25-0.30. The plant benefits from government incentives, including a INR 7.5 crore return on a INR 15 crore plant & machinery investment, a 5% interest subsidy on term loans for six years, and a GST refund of INR 5 crore annually for 10 years on a INR 50 crore investment.

The acquired businesses of CODEOLOGY and MARKPRINT are performing well, with management expecting a growth rate of 15-20%. CODEOLOGY's print and apply technology has been integrated into Control Print's offerings, and MARKPRINT has enhanced the company's digital printing capabilities. These acquisitions are seen as contributing positively to the company's portfolio, with both entities either profitable or at breakeven. The focus for CODEOLOGY includes scaling up core business and select coding/marking products, while MARKPRINT continues to leverage existing contracts for strong growth.

Employee benefit expenses saw an increase, attributed by management to the implementation of the new wage code, which necessitated recasting liabilities for leave encashment and gratuity. Additionally, provisions for sales and service people incentives and loyalty bonuses for key management contributed to the rise. The company also noted that supply chain disruptions, particularly due to the Iran conflict, have led to cost increases in chemical chains and rupee depreciation, prompting the introduction of a surcharge to mitigate these impacts.