Firstcall recommend Control Print as Indian coding & marking market matures

1. CMP 287.00
Target Price 330.00
ISIN: INE663B01015
JULY 8th
2015
CONTROL PRINT LTD
Result Update (PARENT BASIS): Q4 FY15
BUYBUYBUYBUY
Index Details
Stock Data
Sector Containers & Packaging
BSE Code 522295
Face Value 10.00
52wk. High / Low (Rs.) 306.40/103.20
Volume (2wk. Avg.) 32000
Market Cap (Rs. in mn.) 2826.38
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 1129.23 1298.61 1467.43
EBITDA 285.75 325.24 357.83
Net Profit 191.52 203.09 226.84
EPS 19.45 20.62 23.03
P/E 14.76 13.92 12.46
Shareholding Pattern (%)
1 Year Comparative Graph
CONTROL PRINT LTD S&P BSE SENSEX
SYNOPSIS
Control Print Ltd was founded in 1991 and is
headquartered in Mumbai, India, provides coding
and marking solutions in India.
During Q4 FY15, net profit jumps to Rs. 38.29 mn
against Rs. 28.89 mn in the corresponding quarter
ending of previous year, an increase of 32.55%.
The company achieved a turnover of Rs. 304.94 mn
registering an increase of 24.22% for the 4th quarter
of the financial year 2014-15 as against Rs. 245.49
mn in the corresponding quarter of the previous
year.
During Q4 FY15, EBIDTA is Rs. 92.73 mn as against
Rs. 51.45 mn in the corresponding period of the
previous year.
During Q4 FY15, PBT was up by 62.41% to Rs. 76.25
mn from Rs. 46.95 mn in Q4 FY14.
EPS of the company stood at Rs. 3.89 a share during
the quarter as against Rs. 3.18 over previous year
period.
Control Print Ltd has recommended Final Dividend
of Rs. 2/- per Equity Share for the Financial Year
ended March 31, 2015.
During 2014-15, revenue increased by 24% to Rs.
1129.23 mn from Rs. 910.58 mn in the same period
of previous year.
During FY15, PAT rose by 36% to Rs. 191.52 mn
from Rs. 141.12 mn in FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 16% and 17% over 2014 to
2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Control Print Ltd 287.00 2826.38 19.45 14.76 2.80 40.00
Time Technoplast Ltd 54.30 11409.40 3.33 16.31 1.36 50.00
Essel Propack Ltd 131.90 20721.70 3.60 36.64 4.33 80.00
Uflex Ltd 122.10 8817.00 19.66 6.21 0.52 27.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q4 FY15,
Months Mar-15 Mar-14 % Change
Net Sales 304.94 245.49 24.22
PAT 38.29 28.89 32.55
EPS 3.89 3.18 22.12
EBITDA 92.73 51.45 80.24
The company’s net profit jumps to Rs. 38.29 million against Rs. 28.89 million in the corresponding quarter
ending of previous year, an increase of 32.55%. The company achieved a turnover of Rs. 304.94 million
registering an increase of 24.22% for the 4th quarter of the financial year 2014-15 as against Rs. 245.49 millions
in the corresponding quarter of the previous year. Reported earnings per share of the company stood at Rs. 3.89
a share during the quarter as against Rs. 3.18 over previous year period. Profit before interest, depreciation and
tax is Rs. 92.73 million as against Rs. 51.45 million in the corresponding period of the previous year.
Break up of Expenditure
Particulars (Rs. mn) Q4 FY15 Q4 FY14
%
Change
Cost of Materials
Consumed
77.51 70.71 10%
Purchase of Stock-in-
Trade
42.72 34.94 22%
Employee Benefit
Expenses
53.28 50.60 5%
Depreciation &
Amortization Expenses
4.69 3.09 52%
Royalty Expense 17.53 12.35 42%
Other Expenses 52.86 34.60 53%

3. Latest Updates
Control Print Ltd has recommended Final Dividend of Rs. 2/- per Equity Share for the Financial Year ended
March 31, 2015.
Control Print Ltd has announced that the commercial production and operations at the Company's new plant
located at Palasbari, Guwahati, Assam has commenced from May 26, 2015. This plant is built on an area of 6
Bigha and shall focus on manufacturing the entire range of consumables for the comprehensive Coding and
Marking Solutions product range. The facility will be manufacturing Continuous Inkjet Printer Consumables,
Large Character Printer Consumables, Hot Quick Coder and Hot Roll Coder Ink Rolls and Filters.
COMPANY PROFILE
Control Print Limited provides coding and marking solutions in India. Control Print Limited was founded in 1991
and is headquartered in Mumbai, India.
The company has modern production facilities located at Vasai and Nalagarh, while the manufacturing unit at
Guwahati. The Company sells printers for printing variable information and thereafter their consumables,
preventive & breakdown services, filters, spare parts, etc. The Company's product portfolio includes Continuous
Inkjet Printers (CIJ), Drop-on-Demand Valvejet Printers (LCP), Thermal Transfer Overprinters (TTO), Laser
Coders, Thermal Ink Coders, Piezo High Resolution Drop-on-Demand Inkjet Printers (HR), and related
consumables and spares. Control Print Limited has manufacturing infrastructure and highly motivated skilled
workforce to provide the best engineered and most cost effective products and solutions for the entire range of
manufacturing industries which include Automotive, Agro-Chemicals, Metals, FMCG, Pharmaceutical, Food &
Beverage, Wire, Cable, & Pipe, Construction Materials, and Commercial Printing.

4. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
FY14A FY15A FY16E FY17E
EQUITY AND LIABILITIES:
Shareholders’ Funds:
Share Capital 90.73 98.48 98.48 98.48
Reserves and Surplus 737.67 911.97 1115.05 1326.91
Money received against Share Warrants 18.33 7.99 8.38 8.80
A) Net worth 846.73 1018.43 1221.92 1434.20
Non-Current Liabilities:
Long-term borrowings 0.30 0.03 0.02 0.02
Deferred Tax Liabilities [Net] 26.92 24.77 26.01 27.05
Long Term Provisions 7.83 12.82 15.12 17.54
B) Sub Total - Non-Current Liabilities 35.05 37.61 41.15 44.61
Current Liabilities:
Short-term borrowings 52.18 81.63 97.96 109.71
Trade Payables 86.58 76.11 80.67 84.71
Other Current Liabilities 82.84 102.11 116.40 128.04
Short Term Provisions 45.90 60.99 71.97 80.60
C) Sub Total - Current Liabilities 267.50 320.84 367.00 403.07
Total Liabilities (A+B+C) 1149.28 1376.88 1630.07 1881.87
ASSETS:
Non-Current Assets:
a) Fixed Assets 225.78 339.33 420.76 496.50
b) Non Current Investments 185.22 157.50 179.55 201.10
c) Long Term Loans and Advances 12.26 20.82 25.19 29.22
d) Other non-current assets 14.05 0.00 0.00 0.00
D) Sub Total - Non-Current Assets 437.31 517.64 625.50 726.82
Current Assets:
Current Investments 0.30 0.30 0.35 0.39
Inventories 461.52 560.87 667.10 780.25
Trade Receivables 234.96 269.07 304.05 337.49
Cash and Bank Balances 7.59 10.02 11.62 13.13
Short-terms loans & advances 7.46 14.91 16.70 18.37
Other Current Assets 0.14 4.07 4.76 5.42
E) Sub Total - Current Assets 711.97 859.24 1004.57 1155.05
Total Assets (D+E) 1149.28 1376.88 1630.07 1881.87

5. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs. mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 910.58 1129.23 1298.61 1467.43
Other Income 9.00 12.91 10.97 11.52
Total Income 919.58 1142.14 1309.59 1478.95
Expenditure -706.60 -856.39 -984.35 -1121.12
Operating Profit 212.98 285.75 325.24 357.83
Interest -7.46 -10.47 -9.11 -9.66
Gross profit 205.52 275.28 316.13 348.18
Depreciation -11.82 -19.18 -21.10 -22.99
Exceptional Items 0.81 23.39 0.00 0.00
Profit Before Tax 194.51 279.49 295.03 325.19
Tax -52.51 -77.88 -84.38 -90.40
Profit After Tax 142.00 201.61 210.65 234.78
Extraordinary Items -0.88 -10.09 -7.57 -7.95
Net Profit 141.12 191.52 203.09 226.84
Equity capital 90.73 98.48 98.48 98.48
Reserves 737.67 911.97 1115.05 1326.91
Face value 10.00 10.00 10.00 10.00
EPS 15.55 19.45 20.62 23.03
Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th June, 2015E
Value(Rs. mn) 30-Sep-14 31-Dec-14 31-Mar-15 31-Jun-15E
Description 3m 3m 3m 3m
Net sales 285.73 271.05 304.94 329.33
Other income 5.24 -0.11 7.27 0.55
Total Income 290.97 270.94 312.21 329.88
Expenditure -220.14 -213.61 -219.48 -249.96
Operating profit 70.83 57.33 92.73 79.92
Interest -3.86 -2.73 -2.25 -1.89
Gross profit 66.97 54.60 90.48 78.03
Depreciation -4.67 -4.71 -4.69 -5.07
Exceptional Items 6.99 18.95 -9.54 0.00
Profit Before Tax 69.29 68.84 76.25 72.96
Tax -17.34 -16.84 -28.13 -21.01
Profit After Tax 51.95 52.00 48.12 51.95
Extraordinary Items -0.10 -0.06 -9.83 -0.11
Net Profit 51.85 51.94 38.29 51.84
Equity capital 94.48 98.48 98.48 98.48
Face value 10.00 10.00 10.00 10.00
EPS 5.49 5.27 3.89 5.26

6. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 15.55 19.45 20.62 23.03
EBITDA Margin (%) 23.39% 25.30% 25.04% 24.39%
PBT Margin (%) 21.36% 24.75% 22.72% 22.16%
PAT Margin (%) 15.59% 17.85% 16.22% 16.00%
P/E Ratio (x) 18.45 14.76 13.92 12.46
ROE (%) 17.14% 19.95% 17.36% 16.47%
ROCE (%) 25.52% 27.92% 26.41% 24.81%
Debt Equity Ratio 0.06 0.08 0.08 0.08
EV/EBITDA (x) 12.44 10.14 8.95 8.17
Book Value (Rs.) 91.30 102.60 123.23 144.74
P/BV 3.14 2.80 2.33 1.98
Charts

7. OUTLOOK AND CONCLUSION
At the current market price of Rs. 287.00, the stock P/E ratio is at 13.92 x FY16E and 12.46 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.20.62 and
Rs.23.03 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 17% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 8.95 x for FY16E and 8.17 x for FY17E.
Price to Book Value of the stock is expected to be at 2.33 x and 1.98 x for FY16E and FY17E respectively.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.330.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
The industry of Coding and Marking is driven by:
• legal requirements to provide product information to customers, printing specifications, ISI logo and
Company logo;
• inventory control by reduction in wastage of packaging material and printing on the production line;
• traceability of products by date of manufacture, batch numbers, shift numbers, and real time-date and
ensuring quality control, counterfeit prevention, marketing promotion by printing variable information and
logos.
Overall the industry growth is closely co-related to packaging industry growth and the manufacturing sector
growth as a whole. The Indian Coding & Marking industry has reached a level of maturity and acceptance across
applications and is dominated value-wise by 4 players with the Control Print Ltd being amongst them.
Control Print Ltd is a pre-eminent Company in the Coding & Marking Industry in India with a strong management
team, significant financial resources and investments, unsurpassed infrastructure, a rock-solid reputation,
comprehensive reach and huge network of skilled and experienced manpower.
Being a manufacturer of majority of the Items required for Coding and Marking industry and having a leadership
edge in technological terms, the Company has an advantage over other players in the industry and can increase

8. market share and installed base. The primary threat is the greater installed base of a few key competitors
enabling them to get a higher number of repeat and reference sales.
As the Indian Packaging Industry has developed and also with the further maturation of various Coding
Technologies worldwide there is a consistent growth in overall market size. However, the growth is spread
across all the various Coding technologies rather than around Continuous Inkjet Technology as was the case in
the past. This is both an opportunity and a threat depending upon how successful the Company is in establishing
market share in these other Coding Technologies. Control Print Ltd is working on providing a variety of strong
products coupled with marketing & distribution muscle behind these products to be successful across the Entire
Coding Technology Spectrum.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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