Rating Rationale
October 03, 2024 | Mumbai
Control Print Limited
Ratings reaffirmed at 'CRISIL A/Stable/CRISIL A1'
 
Rating Action
Total Bank Loan Facilities RatedRs.80 Crore
Long Term RatingCRISIL A/Stable (Reaffirmed)
Short Term RatingCRISIL A1 (Reaffirmed)
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

CRISIL Ratings has reaffirmed its ratings on the bank loan facilities of Control Print Limited (CPL; part of the Control Print group) at ‘CRISIL A/Stable/CRISIL A1’.

 

In fiscal 2024, on consolidated level topline increased 18.1% year-on-year to Rs 359 crore, driven by increase in sales from consumables. During FY 24 contribution from printers to the overall sales was lower as compared to FY 23 but realization per printer was improved. Consequently, earnings before interest, tax, depreciation, and amortization (EBITDA) increased 13% year-on-year to Rs 87 crore in fiscal 2024 and but EBITDA margin was moderated to 24.23% by 101 basis point mainly on account of expenses incurred towards acquisition of assets. During fiscal 2025, group is expected to register revenue growth with better operating margins.

 

The financial risk profile is supported by healthy net cash accrual of Rs 54 crore in fiscal 2024. This along with reduction in debt resulted in net cash accrual to adjusted debt ratio remained at 36.59 times as on March 31, 2024. Healthy cash accrual resulted in adjusted networth increasing from Rs 271 crore as on March 31, 2023 to Rs 309 crore as on March 31, 2024. As a result, gearing decreased from 0.01 times to “Nil” times for the same period. The company has cash and cash equivalents of Rs 22 crore as on 31st March 2024 adding to the financial flexibility.

 

The ratings continue to reflect the extensive experience of the promoter in the industrial printer industry, CPL’s established market position, healthy profitability and robust financial risk profile. These strengths are partially offset by large working capital requirement and moderate scale of operations.

Analytical Approach

For arriving at the ratings, CRISIL Ratings has combined the business and financial risk profiles of CPL and its subsidiaries, Liberty Chemicals Pvt Ltd (LCPL), Innovative Codes (I) Private Limited (ICPL), Control Print B.V. (CPBV) and Mark Print B.V. (MPBV),CP Italy SRL., Carton Handling Solutions Ltd , Codeology Group Ltd (UK)and Control Print packaging Pvt Ltd . This is because the promoters are same and there are financial linkages between the group companies.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

  • Well Established market position backed by extensive experience of the promoter: The group’s brand, Control Print, has a strong recall in the domestic industrial printer market as the promoter has over 32 years’ experience in the segment. It also has established relationships with reputed clientele such as Hindustan Unilever Ltd, Britannia Industries Ltd, Tata Steel Ltd, ITC, United Brewries, Aristo Pharma etc. Compony is one of the largest players in India in Coding and Marking industry with market share of more than 18%.

 

  • Sound operating efficiencies: Company has healthy operating efficiencies marked by healthy return on capital employed of ~21-25% in the past three fiscals through fiscal 2024. The company has been able to register operating margins in the range of 19-26% over the past five fiscals through fiscal 2024, with continuous improvement in technologies and improved scale of operations. Company is expected to maintain healthy RoCE over medium term, backed by healthy profitability.

 

  • Strong financial risk profile: Networth and total outside liabilities to adjusted networth ratio are healthy at Rs 309 crore and 0.3 time, respectively, as on March 31, 2024. Debt protection metrices were robust on account of strong operating profitability and low utilization of debt. Financial risk profile is expected to remain strong with healthy accretion of reserves, with no debt funded capex expected over medium term.

 

Weaknesses:

  • Moderate but improving scale of operations: CPL has moderate scale of operations as indicated by turnover of Rs 256-359 crore in the past three fiscals through fiscal 2024. The Indian industrial printer market is dominated by Videojet India Pvt Ltd, Domino Printech India Pvt Ltd, Markem-Imaje India Pvt Ltd and CPL. Multinational companies (MNCs) have carved a market for themselves being in the industry for a longer period and have established their position in the organised market Furthermore, being global players, MNCs have larger installed base to garner higher revenues. However, CPL is continuously improving its product mix and is expected to improve its market share with higher installed printer base over medium term. However, CRISIL Ratings believes that the moderate scale of operations and intense competition from MNCs will continue to constrain the business risk profile of CPL over the medium term.

 

  • Working capital intensive operations: CPL’s operations are working capital intensive as indicated by high gross current assets of 232 days as of March 2024. This is primarily on account of high inventory level of around 123 days, maintained to ensure timely supply of consumable and spare parts to clientele. Operations are expected to remain working capital intensive over the medium term, and may continue to be funded by internal accrual, minimising bank limit utilisation.

Liquidity: Strong

Bank limit utilisation is low at around 23 percent for the past twelve months ended August 2024. Cash accrual are expected to be over Rs 55 crore.

 

Liquid investments of around Rs.22 crore in shares, debentures, and mutual funds as on March 31, 2024. Low gearing and moderate net worth support its financial flexibility, and provides the financial cushion available in case of any adverse conditions or downturn in the business

Outlook: Stable

CRISIL Ratings believes CPL's business and financial risk profile will benefit from its established market position, already established printer base and new product launches.

Rating sensitivity factors

Upward factors:

  • Significant gain in market share and improvement in revenue above 30% and profitability with operating margins remaining above 25%.
  • Improvement in working capital cycle with sustained financial risk profile

 

Downward factors:

  • Sustained decline in revenue and subdued profitability weakening net cash accruals to below Rs 25 crore
  • Stretch in working capital cycle or large debt funded capex or sustained material decline ROCE weakens the financial risk profile

About the Group

Set up 1991 in Mumbai by Mr Basant Kabra, CPL manufactures industrial printers and consumables such as ink and spares, and also provides maintenance services. The company is listed on the Bombay Stock Exchange and National Stock Exchange. While sale of printers contributes 20-25% of total revenue, income from consumables and servicing account for the remaining 75-80%.

Key Financial Indicators

As on / for the period ended March 31

Unit

2024

2023

Operating income

Rs crore

359.28

304.33

Reported profit after tax

Rs crore

55.84

54.19

PAT margins

%

15.54

17.81

Adjusted Debt/Adjusted Net worth

Times

0.00

0.01

Interest coverage

Times

49.53

54.25

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

CRISIL Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the CRISIL Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name of the instrument Date of
Allotment		 Coupon
Rate (%)		 Maturity
Date		 Issue size
(Rs. Crore)		 Complexity
Level		 Rating assigned
with outlook
NA  Cash Credit  NA  NA  NA  47 NA  CRISIL A/Stable 
NA  Letter of Credit  NA  NA  NA  3 NA  CRISIL A1 
NA  Proposed Long Term Bank Loan Facility  NA  NA  NA  30 NA  CRISIL A/Stable 

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Control Print Limited

Full consolidation

Parent company, in the same line of business with operational synergies, and have a common management.

Liberty Chemicals Private Limited

Full consolidation

LCPL is a wholly owned subsidiary of CPL and there are financial linkages between the two companies.

Innovative Codes (I) Private Limited (ICPL)

Full consolidation

Innovative Codes( I) Private Limited is a subsidiary of CPL and there are financial linkages between the two companies.

Control Print B.V. (CPBV)

Full consolidation

Control Print B.V. (CPBV) subsidiary of CPL and there are financial linkages between the two companies

Mark Print B.V. (MPBV),

Full consolidation

Mark Print B.V. (MPBV) Control Print B.V. (CPBV)and there are financial linkages between the two companies

CP Italy SRL

Full consolidation

CP Italy SRL subsidiary of Control Print B.V. (CPBV)and there are financial linkages between the two companies

Carton Handling Solutions Ltd

Full consolidation

Carton Handling Solutions Ltd subsidiary Codeology Group Ltd (UK)

Codeology Group Ltd (UK)

Full consolidation

Codeology Ltd subsidiary of Control Print B.V. (CPBV)and there are financial linkages between the two companies

Control Print packaging Pvt Ltd

Full consolidation

Control Print packaging Pvt Ltd subsidiary of CPL and there are financial linkages between the two companies
Annexure - Rating History for last 3 Years
  Current 2024 (History) 2023  2022  2021  Start of 2021
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 77.0 CRISIL A/Stable   -- 06-07-23 CRISIL A/Stable 15-11-22 CRISIL A-/Positive 17-08-21 CRISIL A-/Stable CRISIL A-/Stable
Non-Fund Based Facilities ST 3.0 CRISIL A1   -- 06-07-23 CRISIL A1 15-11-22 CRISIL A2+ 17-08-21 CRISIL A2+ CRISIL A2+
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 20 HDFC Bank Limited CRISIL A/Stable
Cash Credit 27 ICICI Bank Limited CRISIL A/Stable
Letter of Credit 3 ICICI Bank Limited CRISIL A1
Proposed Long Term Bank Loan Facility 30 Not Applicable CRISIL A/Stable
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
CRISILs Criteria for rating short term debt
CRISILs Criteria for Consolidation

Media Relations
Analytical Contacts
Customer Service Helpdesk

Prakruti Jani
Media Relations
CRISIL Limited
M: +91 98678 68976
B: +91 22 3342 3000
PRAKRUTI.JANI@crisil.com

Rutuja Gaikwad 
Media Relations
CRISIL Limited
B: +91 22 3342 3000
Rutuja.Gaikwad@ext-crisil.com


Himank Sharma
Director
CRISIL Ratings Limited
D:+91 124 672 2152
himank.sharma@crisil.com

Rushabh Pramod Borkar
Associate Director
CRISIL Ratings Limited
D:+91 22 3342 3390
rushabh.borkar@crisil.com

Sachin Bhikaji Bandagale
Manager
CRISIL Ratings Limited
B:+91 22 3342 3000
Sachin.Bandagale@crisil.com		Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
CRISILratingdesk@crisil.com
 
For Analytical queries:
ratingsinvestordesk@crisil.com

 

Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL Ratings. However, CRISIL Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.


About CRISIL Ratings Limited (A subsidiary of CRISIL Limited, an S&P Global Company)

CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).

CRISIL Ratings Limited ('CRISIL Ratings') is a wholly-owned subsidiary of CRISIL Limited ('CRISIL'). CRISIL Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").

For more information, visit www.crisilratings.com 

 



About CRISIL Limited

CRISIL is a leading, agile and innovative global analytics company driven by its mission of making markets function better. 

It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint.

It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the US, the UK, Argentina, Poland, China, Hong Kong and Singapore.

It is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

CRISIL PRIVACY NOTICE
 
CRISIL respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from CRISIL. For further information on CRISIL's privacy policy please visit www.crisil.com.



DISCLAIMER

This disclaimer is part of and applies to each credit rating report and/or credit rating rationale ('report') provided by CRISIL Ratings Limited ('CRISIL Ratings'). For the avoidance of doubt, the term 'report' includes the information, ratings and other content forming part of the report. The report is intended for use only within the jurisdiction of India. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as CRISIL Ratings provision or intention to provide any services in jurisdictions where CRISIL Ratings does not have the necessary licenses and/or registration to carry out its business activities. Access or use of this report does not create a client relationship between CRISIL Ratings and the user.

The report is a statement of opinion as on the date it is expressed, and it is not intended to and does not constitute investment advice within meaning of any laws or regulations (including US laws and regulations). The report is not an offer to sell or an offer to purchase or subscribe to any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way.

CRISIL Ratings and its associates do not act as a fiduciary. The report is based on the information believed to be reliable as of the date it is published, CRISIL Ratings does not perform an audit or undertake due diligence or independent verification of any information it receives and/or relies on for preparation of the report. THE REPORT IS PROVIDED ON “AS IS” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, CRISIL RATINGS DISCLAIMS WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHER WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, ACCURACY, COMPLETENESS, ERROR-FREE, NON-INFRINGEMENT, NON-INTERRUPTION, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USAGE. In no event shall CRISIL Ratings, its associates, third-party providers, as well as their directors, officers, shareholders, employees or agents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

The report is confidential information of CRISIL Ratings and CRISIL Ratings reserves all rights, titles and interest in the rating report. The report shall not be altered, disseminated, distributed, redistributed, licensed, sub-licensed, sold, assigned or published any content thereof or offer access to any third party without prior written consent of CRISIL Ratings.

CRISIL Ratings or its associates may have other commercial transactions with the entity to which the report pertains or its associates. Ratings are subject to revision or withdrawal at any time by CRISIL Ratings. CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

CRISIL Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For more detail, please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html. Public ratings and analysis by CRISIL Ratings, as are required to be disclosed under the Securities and Exchange Board of India regulations (and other applicable regulations, if any), are made available on its websites, www.crisilratings.com and https://www.ratingsanalytica.com (free of charge). CRISIL Ratings shall not have the obligation to update the information in the CRISIL Ratings report following its publication although CRISIL Ratings may disseminate its opinion and/or analysis. Reports with more detail and additional information may be available for subscription at a fee.  Rating criteria by CRISIL Ratings are available on the CRISIL Ratings website, www.crisilratings.com. For the latest rating information on any company rated by CRISIL Ratings, you may contact the CRISIL Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 1301.

CRISIL Ratings uses the prefix 'PP-MLD' for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on CRISIL Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisilratings.com/en/home/our-business/ratings/credit-ratings-scale.html