Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Control Print Ltd (BOM:522295, Financial) reported a significant increase in revenue for Q4 FY24, reaching approximately INR98 crore, up from INR84 crore in Q3 FY24.
- The full-year revenue from operations grew to INR344 crore, compared to INR291 crore in FY23, indicating strong overall growth.
- The company has diversified its revenue streams, with top earnings sectors including pipes, food, cement, FMCG, and beverages.
- There has been good traction in the track and trace and masks and safety products business, indicating successful diversification.
- Control Print Ltd (BOM:522295) has made strategic acquisitions, such as Codeology Group Limited and Markprint BV, to expand its product portfolio and market reach.
Negative Points
- Despite revenue growth, the profitability metrics showed mixed results with EBITDA and PBT growing by 23.6% and 23.4% respectively, but PAT and EPS declined by 9.3% and 7.4% YoY.
- The cost of goods sold remained consistent at 40-41% of sales, indicating limited improvement in cost efficiency.
- The company faces challenges in integrating new acquisitions and achieving profitability, particularly with the V-Shapes business, which is expected to take at least two years to break even.
- There is a significant investment required for the newly acquired businesses, particularly in R&D and sales team expansion, which could impact short-term profitability.
- The tax rate for the year was relatively high, partly due to gains on the sale of investments, which affected the overall net profit.
Q & A Highlights
Q: Can you provide details on the company's efforts to increase the sales force and the scope for margin improvement? Are we on track to achieve the INR400 crore sales target by FY25?
A: We have an adequate sales force and are making a few additions for new business lines. Our margins have remained consistent, and we are focusing on optimizing costs. Regarding the INR400 crore sales target, while we don't make forward-looking statements, we are focusing on day-to-day operations to achieve our goals. (Shiva Kabra, Joint Managing Director)
Q: What is the strategy behind the recent investments in Europe, specifically Control Print BV Netherlands and Codeology Group?
A: Control Print BV is a holding company, and Markprint BV is an operating company. Codeology specializes in print and apply systems, which we plan to integrate into our product portfolio. Additionally, Codeology will help expand our product sales in the UK. (Shiva Kabra, Joint Managing Director; Jaideep Barve, CFO)
Q: Can you provide a breakdown of consumable sales for this quarter and the entire year?
A: For Q4, printers comprised 16%, consumables 59%, spares 9%, and service 17%. For the full year, printers were 16%, consumables 61%, spares 8%, and service 15%. (Jaideep Barve, CFO)
Q: What are the revenue and profitability figures for the recent acquisitions, and what additional investments are planned?
A: Codeology Group had revenues of GBP700,000, and Markprint had EUR750,000. V-Shapes had EUR2.5-3 million in sales last year. We plan to invest significantly in R&D, sales team expansion, and reducing material costs. (Shiva Kabra, Joint Managing Director; Jaideep Barve, CFO)
Q: Why did the company decide to diversify into new areas like V-Shapes, which require significant investment and are different from the core business?
A: We believe in innovation and expanding into adjacent markets with high potential. V-Shapes offers a large addressable market in single-dose packaging, and we have seen strong interest from customers. While it will take time and investment, the potential rewards justify the risks. (Shiva Kabra, Joint Managing Director)
Q: Are there any more acquisitions planned for this year?
A: No, we currently have our hands full with the recent acquisitions. We are focusing on geographical expansions and streamlining our existing investments. (Shiva Kabra, Joint Managing Director)
Q: What was the tax adjustment in Q4, and why was the tax rate higher for the year?
A: The higher tax rate was due to gains from the sale of investments. (Jaideep Barve, CFO)
Q: How many printers were sold this quarter and year, and is there a loss of market share?
A: We sold 868 printers in Q4 and 2,859 for the year. While the number of printers sold declined, the value of printer revenue increased. We are focusing on larger, more profitable customers. (Shiva Kabra, Joint Managing Director; Jaideep Barve, CFO)
Q: What is the rationale behind the substantial investments in innovative technologies and foreign assets?
A: We aim to expand our product portfolio and enter new markets with high growth potential. Investments in Codeology, Markprint, and V-Shapes align with our strategy to innovate and capture larger market opportunities. (Shiva Kabra, Joint Managing Director)
Q: How will the recent investments in fixed assets benefit the company in terms of revenue and margins?
A: Investments in rental machines and V-Shapes machinery will generate lease revenue and consumable sales, contributing positively to our margins. (Shiva Kabra, Joint Managing Director; Jaideep Barve, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
