Control Print: A Monopoly in India

 



In October of 2021, I was looking at different monopoly/duopoly stocks. Among them were certain common names like IRCTC, IEX, CDSL, BSE, CAMS, etc. which everyone would have heard about and would be investing in them. But I found a new name “Control Print Ltd.”

Control Print Ltd is involved in development, research, manufacturing, and marketing of printing machines, spare parts, consumables (fluids) and associated services. The sector they are present in is Coding and Marking Solutions. Their product portfolio involves Continuous InkJet, Thermal Inkjet, High Resolution, Large Character, Thermal Transfer, Laser Printer, Hot Roll Coder & their Consumables. The company is the only ‘Make in India’ company & is in the top four players in India commanding nearly 19% market share of the 1800-2000 cr. coding and marking solutions Indian market. Market share increased from 18.5% to 19% in 6 months. This will help in increasing consumables sales. Market share breakdown: 65% industrial, 35% packaging.

Company continues to witness improvement / market leadership in Building Products segment such as plywood, cement, laminates, pipes, cables, etc. Dairy, Chemical and Pharmaceutical industries are witnessing strong traction.

The price in Nov, 2021 for the stock was around Rs. 300 with a P/E of only 15. The valuation seemed reasonable given the company’s status and sector. It is a leader in the sector. I started investing in the stock around the same price. I was convinced with the sector as well as the business model.

Mainly, their revenue generation was from selling the printers and their consumables like ink. The more the printer base, the more they would be able to sell the consumables. In October, 2021 they had an installed base of 13000+ printers which increased to 18000+ in October, 2023. In FY23, Printers generated 13% of the revenue, Consumables and Spares generated 69% of the revenue and Services generated 14% of the revenue. They have very strong distribution network as well with strong field staff for sales. They are planning on increasing the field staff to cover more cities in India.

Today the price of the stock is around Rs. 950 with a P/E of 26.7. This valuation still seems reasonable for a high growth company. The company has given 20-25% revenue growth every year since 2021 and 30-35% PAT growth. The promoters have also recently bought stake from 51.78% in June, 2023 to 52.68% in September, 2023.

I still think that this company has the ability & potential to grow further and gain more market share in the long term which will eventually be factored in to the price of the stock. At current prices, I wouldn’t recommend buying the stock as markets are at All-Time-High but it is definitely a great stock to keep in the portfolio.

Let me know what you think of the stock in the comments!!!!!

Happy Investing!!!!

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