Control Print stock can reach Rs 550

Control Print stock can reach Rs 550

By Rajiv Kapoor | 21 October, 2017

India continues to remain a popular investment destination for foreign portfolio investors and is an overweight in most global fund portfolios. During the last Samvat 2073, the Indian equity markets and the economy had two major unprecedented events, namely, demonetisation and the introduction of Goods and Services Tax, or GST. After the initial correction during the period of demonetisation, the benchmark index Nifty, which was hovering around the 8,000 levels, witnessed an almost secular positive uptrend, touching a new lifetime high and giving an absolute return of over 15% during the last one year. Most fund managers seem to be bullish on the Indian growth numbers from long term perspective, but wary of markets in the next two-three quarters. It looks all set to climb higher from the present levels over the long term. The only worry in the geopolitical space is the US-North Korea tension, causing disruption to almost stable stock market indices.

Control Print Ltd is India’s leading coding and marking solutions provider for printing variable information such as batch numbers, manufacturing and expiry date, MRP, serial number, special markings, logos, brand names and bar codes. It has two state of the art manufacturing facilities in Nalagarh in Himachal Pradesh and Guwahati in Assam, with necessary support tools, services and amenities to ensure the highest quality of product and services. The company is catering to an entire range of manufacturing industries, including personal care, food and beverages, pharmaceutical, construction material, wire and fabrics, metals, agrochemical, petrochemical, automotive and electronic sectors. Control Print derives its revenue such as sale of printers, consumables like ink jet fluids, ribbons and ink rolls and providing annual maintenance services. The company has reported stellar set of Q1FY18 performance with net sales coming in at Rs 48 crore, up 28% y-o-y, while EBIDA was counted at Rs 13.4 crore. The profit after tax was seen at Rs 8.6 crore vis-a-vis Rs 5 crore against the same quarter of last financial year. The company management expects a substantial positive change in the growth numbers over the next few years. This is due to lower overhead costs and increasing market share. Also, with the commissioning of a new printer manufacturing facility in Assam, there is a good possibility to double revenues from the existing level during the next few years. Incorporating the robust Q1FY18 performance and the future outlook, the Control Print stock is well poised to climb higher from the present level of Rs 385. It can achieve a potential market price of Rs 550 in a 12-15 months’ time frame.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

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