As a showcase of perseverance and progress, the global economy achieved
a growth rate of 3.4% in CY 2022, propelled by economic rebound even amid headwinds. There
were challenges in the form of geopolitical tensions in Europe, rising fuel and input
costs, interest rates, and supply-side shocks, globally. Therefore, measures were
undertaken by major central banks across the world to tackle this global headline
inflation. The prices of fuel and non-fuel commodities then subsequently declined. During
the year 2022, the inflation rate stood at 8.7%, and it is forecasted to decline slowly to
7.0% in 2023.
Reference
https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023
outlook
Global conditions have improved as inflation pressures started to
abate. On the road back to a full recovery with sustainable growth, prices somewhat
stabilised. Additionally, the
COVID-19 pandemic which affected Chinas economy, and the
countrys prompt reopening led to a faster-than-anticipated recovery, which is
contributing to a slightly more optimistic outlook for the global economy.
Further, challenges such as high inflation, increased interest rates,
and ongoing conflict between Russia and Ukraine, the world demonstrated a remarkable
resilience. This serves as a base for IMFs expectation for the world economy to grow
2.9% in CY 2023 and then rising to 3.1% in CY 2024.
inDian econoMy
India marked its position as one of the fastest-growing economies
globally, and is expected to continue its growth trajectory in 2023. With the ongoing
implementation of structural reforms and policies aimed at increasing investment and
productivity, coupled with the countrys young and expanding workforce, India is capable
of becoming one of the worlds leading economies in the coming years. The Governments
focus on boosting entrepreneurship and innovation, coupled with the countrys thriving
startup ecosystem and burgeoning digital economy, are further driving growth and creating
new opportunities for business entities. Although the economy was recovering from the
setbacks during the COVID period, the Russia-Ukraine conflict brought additional
challenges. Inflation remained above the upper range of the RBI at 6.5% throughout the
financial year 2022-23, primarily due to a sharp rise in commodity, food, and fuel prices.
Moreover, the
RBI after increasing key benchmark policy rate for six consecutive
times, finally paused in April 2023, effectively bringing the interest rate to 6.5% as the
benchmark. This helped the country stabilise the inflation. challenges, the economy grew
by 7% in CY 2023, making it the fastest-growing economy globally.
The manufacturing activity, as measured by
Purchasing Managers Index (PMI) reflects that Indian
manufacturing industry ended 2022 on a positive note, with business conditions improving
to the greatest extent in over two years. Demand resilience boosted sales growth, with the
rate of increase picking up to the quickest since February 2021. Manufacturers scaled up
production at the end of 2022 mainly on the back of rising international and domestic
demand for Indian manufactured products. The trend of rising output continued into the
first quarter of 2023, indicating a sustained improvement in the business environment.
This growth is further supported by increasing private consumption as a percentage of GDP,
and a rise in exports - critical indicators of a robust economy.
Furthermore, the Government can leverage the rising tax collections to
fund capital expenditure and subsidies, strengthening the economy.
The Governments unwavering commitment to developing infrastructure
through capital expenditure will provide a boost to the economy. Government programmes
such as Product Linked Incentives (PLI), the National Monetisation Plan (NMP), and PM Gati
Shakti National Master Plan, are also expected to accelerate the countrys economic
growth.these
Reference
https://www.dw.com/en/india-economy-growing-fast-amid-financial-gloom/a-64774118
https://ec.europa.eu/eurostat/documents/2995521/16056034/2-
14022023-AP-EN.pdf/d88030b3-8cb0-770a-0ab4-306f108bce76#:~:text=In%20the%20third%20quarter%20of,by%20
3.6%25%20in%20the%20EU.
outlook
While the Indian economy remains poised to achieve even better growth
in FY 2023-24, the Governments focus on reducing regulatory burdens and increasing ease
of doing business is likely to create a favourable business environment. This will also
raise foreign investments into the nations industrial growth. The countrys large
and youthful population, coupled with ongoing efforts to improve education and skills
training, is expected to fuel a surge in consumption and investment, particularly in key
sectors such as infrastructure, manufacturing, and technology. Despite global headwinds,
the Indian economy is projected to grow at a rate of approximately 6.5% in the FY 2023-24.
Capital expenditure is expected to remain a key focus for both the private sector and the
Government throughout the year. Additionally, inflation is expected to cool down to 5.3%
in FY 2023-
24 and further drop to around 4% in the following financial year. This
decrease in inflation is anticipated to stimulate industrial activity by boosting demand,
while lower interest rates will enable companies to expand their capacity and meet rising
demand both domestically and internationally.
The GDP per capita of India is anticipated to reach US$ 2,053.00 by the
end of 2023, with further projections indicating that it will trend around US$ 2,193.00 in
2024 and US$ 2,340.00 in 2025, reflecting a positive growth trajectory.
inDustry overview
Coding and marking systems play a crucial role in the manufacturing and
supply chains of both industrial and consumer goods. These systems are utilised to print
vital product information, including lot size, manufacturing date, batch number, MRP
(Maximum Retail Price), expiration date, and other pertinent details, onto the product
packaging. It is aimed at ensuring that consumers receive accurate and authentic
information, as well as to track the product from factory to retail outlets.
oPPortunities
India holds the potential to emerge as a leading manufacturing hub on a
global scale, offering ample growth prospects for industry players to grow and expand. The
significance of packaging has grown substantially as brands strive to convey vital
information regarding sanitation, safety, and product quality in an efficient manner.
Indias coding and marking integration software market is projected to
grow rapidly following the rising need for traceability and authentication of products,
particularly in the pharmaceutical industry, plagued by counterfeiting.
The strict Governmental regulations mandating clear product information
on the packaging necessitates effective coding and marking technologies.
Increasing living standards are driving the need for coding and marking
systems due to the growing demand for packaged food and beverages. Moreover, the
Governments requirement for appropriate labelling of food and beverage products,
including ingredient lists, manufacturing and expiration dates, and nutrient information,
is also contributing to the surge in demand for coding and marking.
outlook
The coding and marking industry in India are expected to witness
substantial CAGR of 9.85%. Herein, it may reach 34,025.07 Million by 2027, up from
19,361.28 Million in 2021. This growth may be primarily driven by the Make in India
initiative, which has made the country a favourable destination for foreign direct
investment in manufacturing. According to the World Bank, India ranked 63rd in
2022 in ease of doing business across the world among 190 countries, improving its rank
from 142 in 2014. Indias business-friendly environment has further enhanced its appeal to
investors. This is expected to fuel demand for coding and marking solutions, with
end-users across various industries expanding their operations in India. Global giants
such as Apple, Samsung and Foxconn have already established manufacturing facilities in
the country and many more global giants are anticipated to set their shops in India.
Meanwhile, growth in investments across diverse manufacturing industries shall spur demand
for coding and marking equipment.
The food and beverage, healthcare, electronics, chemicals and
construction, and automobiles industries are among the major growth drivers of the coding
and marking market in India. As these industries continue to expand, there will be a
corresponding increase in the demand for coding and marking equipment.
Source
Coding &Marking Market Report, Arizton
https://www.investindia.gov.in/team-india-blogs/budget-2023-easing-ease-doing-business-india
governMent initiatives
The Pradhan Mantri Awas Yojana Urban (PMAY-U) has sanctioned a total of
1.20 Crores houses, with over 72.56 Lakhs houses completed as of March 2023, with a
central assistance of 1.42 Lakhs Crores. The Government recently increased the PMAY
budget by 66% to over 79,000 Crores, exhibiting its commitment to accomplishing the
initiatives primary goal of constructing over 2.95 Crores pucca houses by 31 March 2024.
The schemes primary goal is affordable housing for all. Its success will drive up demand
for construction materials such as cables, wires, cement, plywood, pipes, and extruded
plastics.
Consequently, the coding and marking industry is also likely to
experience increased demand.
The Government plans to set up the Urban Infrastructure Development
Fund (UIDF) with an annual budget of 10,000 Crores to facilitate the development of
infrastructure in Tier 2 and Tier 3 cities. Development in urban infrastructure will
attract the people to increase their standard of living that will boost up the demand for
FMCG, food, electronics, automotive and construction materials, benefiting the coding and
marking industry as well.
The use of packaging for product safety, the rise of blister packaging,
and increased focus on printing drug information on packaging have led to a surge in
demand for these systems among pharmaceutical businesses.
GDP per capita in India is anticipated to increase to
US$ 2053.00 by the end of 2023. In the coming years,
Indias GDP per capita is estimated to gradually rise to around US$
2193.00 in 2024 and US$ 2340.00 in 2025, based on the econometric models. This indicates
growing economic prosperity. As personal incomes rise, the demand for consumer goods,
including products requiring coding and marking, is likely to increase. This upward trend
in GDP per capita will contribute to the growth and expansion of the coding and marking
industry in India.
The Government has pledged incentives worth US$ 10 Billion to
semiconductor companies that would help set up production units in the country.
This initiative is expected to promote growth in the manufacturing
sector, which in turn will increase the demand for coding and marking solutions to ensure
accurate and efficient labelling and identification of products.
Capital outlay of 2.40 Lakhs Crores has been provided for the
Railways, which is the highest-ever outlay and about nine times the outlay made in
FY 2013-14. This expansion will drive an increased demand for steel and
metals. Consequently, the coding and marking industry will experience a boost as these
materials are used in the manufacturing and labelling of railway equipment, components,
and related products.
Investment of 75,000 Crores, including 15,000 Crores from private
sources, for 100 critical transport infrastructure projects, for last and first mile
connectivity for ports, coal, steel, fertiliser, and food grains sectors. An improved
transport infrastructure would facilitate in ease of business connectivity that would
attract more business to India. This increased economic activity would, in turn, boost the
coding and marking industry, as businesses would require efficient and reliable coding and
marking solutions for their products.
Rebate limit of Personal Income Tax to be increased to 7 Lakhs from
the current 5 Lakhs in the new tax regime. Thus, those under the new tax regime, with
income up to 7 Lakhs need not pay any tax.
This will increase the disposable income that will stimulate higher
purchasing power, driving increased expenditure on products. Thus increasing the demand
for coding and markings.
New co-operatives that commence manufacturing activities till 31 March
2024 will get the benefit of a lower tax rate of 15%, as presently available to new
manufacturing companies. This favourable tax rate will attract new investments and
encourage the growth of the manufacturing sector, including the coding and marking
industry. The increased number of manufacturing activities will lead to a higher demand
for coding and marking solutions, driving the growth of the industry.
coMPany overview
Founded in 1991, Control Print Limited (also referred as ‘Control
Print or ‘The Company) is a pioneer in the coding and marking solutions
industry in India. It offers a wide range of products, including Continuous Ink Jet
Printers, Drop on Demand Printers, Hot Roll Coders, Thermal Inkjet Printers, Thermal
Transfer Over Printers, Lasers, and Consumables. Control Print is the only Indian
integrated manufacturer that produces coding equipment and consumables to compete with
global technology. The Company has over 300 sales and service field workers across nine
branch offices in India and one branch in Sri Lanka, and operates on a highly integrated
ERP system for exceptional operational excellence. With over three decades of experience,
Control Print has evolved to understand the changing needs of the evolving country and its
manufacturers.
strengths
Control Print recognises the significance of a smooth production
process, and the Company has successfully achieved this by establishing itself as a
reliable partner. It employs cutting-edge continuous inkjet printing machines that are
built and engineered to suit the specific working conditions in India, utilising advanced
German technology. Additionally, through partnerships with various R&D firms and
in-house development initiatives, the Company has gained ownership of crucial technologies
such as Thermal Inkjet, Drop-on-Demand Valvejet, and Piezo Dropon-Demand Inkjet
technologies. The Company conducts thorough training programme to ensure that the
employees are proficient in operating and maintaining the machines. The pricing for each
batch coding machine is set to maintain both quality and affordability. Moreover, the
Company has a robust support network to ensure high uptime and offer after-sales service,
which eliminates customer concerns.
oPerational overview
Control Print provides a comprehensive array of coding and marking
solutions. The Company is also enhancing its in-house software development team to create
holistic solutions that can meet the specific requirements of its customers in conjunction
with their printers.
By expanding the sales staff for telecommunication and lead generation,
it has increased the conversion strike rate, resulting in strong cash flows. Additionally,
new Government regulations pertaining to marking and coding in agrochemicals, healthcare
and plastic bags are expected to have a positive impact on the Companys growth.
Control Print offers a complete range of coding and marking solutions.
It has now established an independent in-house software development team focussed on track
& trace solution. With growing demands of manufacturers to avoid counterfeiting of
their products & also for their promotional schemes, track & trace along with the
Companys printers is meeting their requirement comprehensively. Continuous
monitoring of activities at all levels, including the Companys field force has
strategically given Control
Print an upper hand in improving customer delight & thereby market
share. The Company continues to generate strong cash flows.
The two major verticals of the Company -- Small Character
Printer (SCP) Division & Large Character Printer (LCP) Division recorded significant
growth in their respective business streams. SCP Division continues to increase its
installation base in all major industry verticals like Dairy, Pipes, Wire & Cable,
Steel, FMCG, Food & Heathcare. Similary LCP Division has also grown significantly in
non-Cement & Metal, Building Material. The business pipeline for both the verticals
looks promising & thus the Company expects good growth in years to come.
The following are the highlights for the key products of Control Print:
ciJ Division- Every year CIJ Division contributes significantly
to the bottom to aggressive but selective approach, Control Print is one of the strong
contenders in marking & coding business with respect to its CIJ product.
tiJ, tto, laser and hires Division – The Company offers all
types of printing technologies & as a result it also provides the right solution for
different applications to variety of customers. The non-CIJ business for the Company has
grown exponentially over last few years and with more & more new applications being
tapped with its TIJ & HiRes printers, the Company is getting good leads for
replacement of other market printers.
Full emphasis continues to be there in Dairy,
Beverages, Bakery (Biscuits), Frozen Food, Ready to
Eat, Pharma, Packaging, Plywood, Lubricants etc. The laser business at
Control Print continues to expand with the improvement of product technology, especially
the Companys marking & coding market by storm resulting in being one of the most
preferred product amongst existing users of laser printers. service business -
Control Print acknowledges that for smooth operations of any industrial product strong
service network is a must. The Company has a sizeable team of more than 300 service team
members well spread out across the country. The likePlywood, Steel Companys service
revenue has grown steadily, and is thereby contributing to profitability of the
Company.
| Financial overview |
|
|
|
|
|
Fy 2022-23 |
Fy 2021-22 |
yoy chAnge (In%) |
|
| revenue from operation (Rs in Lakhs) |
29,140.61 |
25,426.25 |
14.60 |
|
| eBItdA (Rs in Lakhs) |
7,842.65 |
6,268.92 |
25.10 |
|
| PAt (Rs in Lakhs) |
5,193.38 |
4,123.94 |
25.92 |
|
| ePs |
31.80 |
25.25 |
25.94 |
|
| key Ratios |
|
|
|
|
|
FY 2022-23 |
FY 2021-22 |
Change (%) |
Reason FoR vaRianCe above 25% |
| Debtors Turnover (no. of Times) |
4.27 |
4.26 |
0.23 |
- |
| i nventory Turnover (no. of Times) |
1.84 |
1.65 |
11.52 |
- |
| i nterest Coverage Ratio (no. of Times) |
13.80 |
11.23 |
22.89 |
- |
| Current Ratio (no. of Times) |
4.29 |
4.46 |
(3.81) |
- |
| Debt equity Ratio (no. of Times) |
Not Applicable |
Not Applicable |
- |
- |
| operating Profit Margin (in %) |
56.92 |
57.16 |
(0.40) |
- |
| net Profit Margin (in %) |
17.82 |
16.22 |
9.86 |
- |
| Return on net Worth (in %) |
18.62 |
16.60 |
12.17 |
- |
Risk & Mitigations
Effective risk management is a critical aspect of any business, as it
helps to identify and mitigate potential hazards that could negatively impact a companys
operations and reputation. To ensure that the risk management plan of the Company is
properly implemented and monitored, the Board of Directors has established a dedicated
Risk Management Committee. The establishment of a Risk Management Committee underscores
the importance that the Company places on managing risks and its commitment to ensuring
that the business operates in a safe and sustainable manner.
Competition: Although our industry has very few players and is
highly competitive, the Company remains competitive due to its robust research and
development capabilities. This allows the Company to gain a deep understanding of market
demand and align its strategies accordingly.
Foreign exchange risks: Control Print operates in several
countries, exposing it to foreign exchange risks caused by fluctuations in currency
values. To mitigate the risk of forex, the Company is expanding its global presence,
pursuing strategic partnerships and acquisitions that provide it with convenient access
and streamlined financial transactions.
inteRnal ContRol
The Company places great emphasis on conducting periodic internal
audits at its factories, branches, and other functional areas, utilising an Internal
Control System tailored to the size, complexity, and nature of its operations. The Audit
Committee, in conjunction with management, evaluates the audit findings and takes
appropriate corrective action as necessary. Furthermore, the Company has implemented the
SAP system, which contributes to reducing human error and addressing gaps. Effective
internal controls are also established to safeguard and protect all assets against
unauthorised use or disposition and ensure that transactions are duly authorised,
recorded, and reported.
The Company has a comprehensive and efficient internal audit system
that encompasses all operations and services across all locations, businesses, and
functions on an ongoing basis. The Audit Committee conducts regular reviews of the
Internal Audit System and implements required improvements to the Internal Control System.
huMan resource
The Company currently employs 767 people and consistently monitors
their performance, while organising training programmes to keep them up-to-date with the
latest technologies. It strongly believes in prioritising the well-being of its employees
and has implemented strict policies, employee initiatives, and competitive remuneration to
cater to their needs. The Company acknowledges that the success of any business heavily
relies on its workforce and therefore, strives to offer competitive remuneration,
attractive benefits, and a positive work environment to its employees. Additionally, the
Company highly regards the contributions of its employees towards its success.
The Company has implemented work practices that prioritise effective
leadership and employee management, aimed at maximising the potential of its human capital
while fostering its retention and development. The Companys strategic approach
involves aligning its business goals, organisational culture, and values with its Vision
and Mission, with the ultimate aim of promoting employee growth and enhancing their
performance.
disclaimer
Certain statements in the MDA section concerning future prospects may
be forward-looking statements which involve a number of underlying
identified/non-identified risks and uncertainties that could cause actual results to
differ materially. In addition to the foregoing changes in the macro-environment, a global
pandemic like COVID-19 may pose an unforeseen, unprecedented, unascertainable and
constantly evolving risk(s), inter-alia, to the Company and the environment in which it
operates. The results of these assumptions made, relying on available internal and
external information, are the basis for determining certain facts and figures stated in
the Report. Since the factors underlying these assumptions are subject to change over
time, the estimates on which they are based are also subject to change accordingly. These
forward-looking statements represent only the Companys current intentions, beliefs
or expectations, and any forward-looking statement speaks only as of the date on which it
was made. The Company assumes no obligation to revise or update any forward-looking
statements, whether as a result of new information, future events, or otherwise.
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