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

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%

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.

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

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

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

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

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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