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!!!

I avoid those sector are
1,Government company and heavy depend on government based decision .( End of the day the money not their hard earned)
2, oil and gas and mining.
3, defence also cause their valuation and their revenue mismatch with my views.
4, power proxy like transformer and tower for high voltage,cause I think their replacement are 5-10 years or above.in my area I never seen any transformer was replacing 5-6 months or in years high voltage tower are 10 years old in my areas I don’t think they have to change in next 5 years.The current fomo is on power will bubble burst soon.
5, Ev I don’t think that Ev change everything end of the day it’s depend on fossil fuels and coal .if u know that a car in 10 years age how much pollution make , for a battery manufacturer already did that much pollution before that use .other also had.

What do you think about my pf. I have only 3

Some anecdotes from Howard Marks’ memo Fewer Losers or More Winners

If we avoid the losers, the winners will take care of themselves.

bond investors improve their performance not through what they buy, but through what they exclude – not by finding winners, but by avoiding losers.

risk avoidance is likely to result in return avoidance. There’s such a thing as the risk of taking too little risk. Most people understand this intellectually, but human nature makes it hard for many to accept the idea that the willingness to live with some losses is an essential ingredient in investment success.

amateur tennis is a loser’s game: The winner is usually the person who hits the fewest losers. If you can just keep the ball in play long enough, eventually your opponent will hit it off the court or into the net

You can win by having a few winners but fewer losers or by having a lot of losers but more winners. Neither maximizing winners nor minimizing losers is necessarily enough. It’s all in the balance.

In favor of index investing:

-The performance of the equity indices is often dominated by a few stocks or groups of stocks.

-The gains of the leaders can make them seem expensive, arguing for profit-taking.

-Human nature – especially the desire to avoid regret – adds to the motivation to sell.

-By definition, if you reduce your holdings of the winners relative to their representation in the indices and these winners continue to outperform, you’ll have a tough time keeping up.

“If you look at the chart of a stock that’s been up for 25 years and say, ‘Man, I wish I’d owned that stock,’ think about all the days you would have had to talk yourself out of selling.”

If alpha is the ability to earn return without taking fully commensurate risk, investors possessing it can do so by either reducing risk while giving up less return or by increasing potential return with a less-than-commensurate increase in risk.

Source: Fewer Losers, or More Winners?

NSE has ROFR ie Right of first refusal which means that if anyone is buying it’s share from another person, they first have to take permission from the owner who if interested will offer a counter offer than your offer. So only people selected by the owner can have the stocks. So when you apply for shares of NSE, board approval is required for your purchase. This will happen in a board meeting which happens at certain intervals which takes time.