Ladies and gentlemen, good day and welcome to Control Print, Control Print Limited Q3 FY 2022 earnings conference call hosted by Asian Markets Securities Limited. As a reminder, all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over this conference to Mr. Karan Bhatelia from Asian Markets Securities. Thank you and over to you, sir. Thank you, Hemant. Ladies and gentlemen, good afternoon and a warm welcome all to the Control Print Limited third quarter and nine months FY 2022 earnings conference call hosted by Asian Markets Securities Limited. From the management side we have with us Mr. Shiva Kabra, Joint Managing Director, and Mr. Rahul Khatri, CFO. I would like Rahul to take the call ahead with respect to the financials, and then we can open the floor for Q&A. Thank you, Karan. Welcome everyone to the third quarter FY 2022 earnings conference call of Control Print. We appreciate your taking out time from your busy schedule to attend the call. Hope you and your loved ones are safe and healthy. Mr. Shiva Kabra, Joint Managing Director, joins me on this. Let us start with a brief on Control Print, followed by specific analysis of the financials of the current quarter and end with the Q&A session. The detailed presentation has already been put up on the website as well as the investor presentation notification on the exchanges for this call. For those who are probably reviewing Control Print for the first time, we are a niche coding and marking segment, which is an oligopolistic market with four major players, three of whom are MNC, and Control Print is the only Make in India manufacturer. This gives us an advantage to sell our products locally and compete strongly with the other multinational players. We are the only integrated player with capability to manufacture both printers as well as consumables in India, giving us an advantage to share the benefit with our customers. This also gives confidence to customers for long-term partnership with Control Print. We have our manufacturing facilities in Nalagarh, in the state of Himachal Pradesh, for the manufacturing of printers, and in Guwahati, in the state of Assam, for the manufacturing of consumables. Both the manufacturing locations are state-of-the-art facilities to produce good quality products. All our consumables are manufactured in Guwahati plant, and in addition to this, we have also started manufacturing some printers in that location. We have a strong sales and service team of 350+ engineers across our 11+ branches, which gives us the advantage to service our customers efficiently and timely, since after-sales service is very critical to ensure that the production line of our customers continue to function continuously, thereby maintaining customer satisfaction. The 11+ branch offices across North, South, East, West, and Central India gives us an advantage to be in direct contact with all our customers in a timely manner, since our products are critical to their production line. Post sale of printer, there is a continuous demand for consumable over the life of the printer, which typically lasts for five-seven years, depending on the operating conditions. We have our complete attention on our customer's requirements to ensure that production is never affected and service requests are attended immediately, thereby gaining our customers' confidence. We have an end-to-end SAP ERP system set up which ensures maximum transparency in accounting, sales and after-sales service, as well as total controls from raw material planning and ordering to receivable collection, and is integrated with our CRM systems, which gives the confidence to the team, the customers, as well as our auditors and investors. We have a widespread customer base catering to multiple industries like textile and cable, metal, automotive, food and beverages, FMCG, pharma, et cetera. We continuously endeavor to customize our products to reach out to other industries to increase our install base. We have the entire range of products in our portfolio to meet the coding and marking requirement of the industry. The details are elaborated in our company presentation. As of today, the company has an installed base of 14,000+ printers across industries, which enables the sale of consumables across the life cycle of the printer. We are very confident that we have the best-in-class products to meet the requirements of most of the substrates, which gives an additional advantage to the customer to do business with Control Print. With a strong foundation and five pillars, that is man, machine, material, technology and finance, well established to augment our business plan, we are continuously striving for greater heights. Let me give a brief analysis of the financials of Q3 FY 2021-22. The Indian economy witnessed an increase in the manufacturing activities in Q3, which was encouraging. The increase in Omicron cases in December was a damper and affected the consumption sentiment, though there was no stoppage in work, but there was a slowdown on the demand side. The repeated occurrence of COVID waves every few months is demoralizing the industry as they have to work on course corrections as well as ensure the health and safety of the employees. The gross margins were dented across industries due to increase in material prices of components, especially electronics, chemicals, solvents, et cetera. With the increased vaccination, the third wave is very mild and the government is not willing to do a lockdown, which means that the production momentum will continue and a quick bounce back is expected for higher growth. These are extraordinary situations when the strength of the company is tested, and we assure you that Control Print is geared up for any challenge. We are financially stable and robust and will continue to perform in spite of unforeseen challenges. This stability of Control Print has been reaffirmed by credit rating agency CRISIL with an A rating. After considering the short and medium term impact of the COVID pandemic, our investors can maintain their belief on the company's management for an optimistic future. This quarter's performance once again delivered all round growth in revenue and margins and also had volume growth. Revenue for the quarter was above INR 60 crore at INR 62.72 crore, which is the highest revenue in Q3. The year-on-year growth in revenue is 12.7% and the nine-month growth is 25.3%. The reason for growth in revenue was due to good traction in consumables. The year-on-year growth of 16.4% in real value terms as the industrial production increased. Though we believe it is still not at the optimum level. The production of some of the industries was lower due to raw materials shortages, so there is still scope of growth in the overall production volume. Profit before exceptional items increased 19.4% year-on-year, and increased 29.8% for nine months. Profit before tax increased 19.5% year-on-year and 54.3% for nine months. Profit before tax for nine months is almost equivalent to previous year's PBT of 12 months. EBITDA increased 14% year-on-year and 23.4% for nine months and continues to remain above 24%. Profit after tax increased 20% year-on-year and 51% for nine months. Also to mention, profit after tax for nine months is almost equivalent to previous year's profit after tax. Working capital days improved significantly by 32 days this financial year due to better inventory management and receivables recovery. The company maintains healthy margins with profit before exceptional item and tax at 17.9% and EBITDA at 24.5%, with scope of improvement due to better product mix and higher revenue triggering economies of scale. We should continue to maintain EBITDA margins north of 24% on a long term sustainable basis. Let me brief you on the performance of various divisions, products, and business segments. Printer and consumables had a positive demand despite of challenging environment, and the increased install base will drive the business in the coming quarters. The company strengthened its market share in the building materials segment and the dairy and food sector, including FMCG, witnessed increasing customer penetration. The company received the US FDA approval for surgical face mask and is only the fourth company in India to get this accreditation. The FPC division witnessed nine-month growth of 16% year-over-year as the production of customers was increasing. The growth was mainly due to improved production of some of the industries where we have a stronghold like dairy, healthcare, food, cable and wire, agrochemicals and was also encouraging to see growth in some of the upcoming sectors like pharma, paint, woods. Our TIJ, TTO and High Resolution division continue to grow exponentially with some good installations in the past few months. We have dedicated managers and teams to drive these verticals, which focus on dairy, beverages, bakery, frozen food, ready-to-eat, pharma, packaging, plywood, lubricants, carton coating. These new products continue to grow every quarter, which builds confidence on the potential of these products in the coming years. Laser business is growing steadily as product technology is being improved and a new team is driving the business. This has yielded good dividends with positive response from the customers and new opportunities expected in the coming quarters. Service revenue has shown good growth in value terms, which contributes towards profitability. Our strategy for separate vertical for key account and OEM business for focused approach is showing encouraging results and should yield good quantum of business. LCP business reported an increase in previous three quarters with some revival in cement accounts and Pan-India supplies in sugar industry. We are changing our focus to non-LCP business with some new applications, and the team is confident of generating business in the coming quarters. With new government directives regarding marking and coding in agrochemical, healthcare, plastic bags, we expect some good contribution to our business growth. Customers, especially large business organizations, are looking for coding and marking solutions so as to avoid counterfeiting of their products. We are offering complete solution, including availability of our in-house software development team to prepare tailor-made solutions or as per our customers' expectations. To intensify our reach to the customers, we have strengthened our inside sales team for telecalling the customers to generate good quality leads. This is helping the field sales force to improve their strike rate for order conversion. The company has strong cash flows, and the trend is expected to continue. While the pandemic retreats, and with the increase in the vaccination population, will result in robust growth of the economy, and we hope for similar trend of growth trajectory. Fundamentally and inherently, the company remains strong, and we are focused on our plan and strategies, and we are confident of the growth potential to deliver positive results. The floor is now open for questions. Thank you very much. We will now begin the question -and -answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Gaurav Shah with Ashok Gandhi Securities. Please go ahead. Hi, sir. Congratulations for a stable set of numbers. I have a couple of questions. Firstly, what is your game plan to win market share from our competitors and take it from, let's say, 18.5% to say around 25%-30% in longer term? Secondly, during this quarter, we have got a US FDA approval for our masks division. So what's the revenue potential here? Thanks. Thank you. Like we mentioned in the previous call, we now have the complete portfolio for the coding and marking industry. Certain industries where Control Print was not able to penetrate, like we mentioned, our new product range of TIJ, TTO and high-res printer, we are now able to generate good customer response there. These verticals are continuously increasing. We will be able to add more customers with these new printers as well as gain market share. Even our TIJ team is very strong. Like I mentioned, now we have increased our inside sales team for telecalling, which is, you know, showing good results, and we are able to reach more and more customers. The conversion rate is definitely increasing. Being a Make in India manufacturer, we are able to compete very strongly with our competitors. The trend shows that we are moving forward on the market share. Have we got any market share from our competitor during last quarter? No, see, we don't get their numbers on a quarterly basis. There are no industry reports. We have to wait for the year-end to or when they file their returns, probably towards the end of September, October of next year. Then only we will get to know the market share results. The ground feel keeps telling us that, you know, we are gaining competitor accounts, which is a positive sign. Okay. The second thing on the US FDA approval for mask division, what's the revenue potential there? It's a great thing. We are only the fourth company in India to have received this approval, and that has opened up the market wherein we can export these surgical masks to the U.S. now also. Earlier, there were restrictions because if you don't have the FDA approval, you can't supply to the U.S. market. That opens up an export opportunity for us, which the team will explore. As of now, the third wave is anyway in progress, and that has seen an increase in demand for the face mask division. Yes, we are quite this quarter, we feel that the mask division will be strong, so we should be doing about INR 2 crore-INR 2.5 crore a month on the mask division. Okay. Do you think we have any opportunity to reach, let's say, INR 10 crore or something in longer term? Very difficult to predict, yeah, because it's completely driven by, you know, on the wave, and if things settle down, then the mask thing goes down. So, difficult to predict, but yeah, as of now, it's on the up. Okay. Thanks a lot. Thank you. The next question comes from, Devanshu Sampat with YES Securities. Please go ahead. Hello, sir. Good afternoon. A few questions from my side. Can you elaborate a bit on the opportunity that arises out of, you know, the Ministry of Health and Family Welfare's latest notification of having QR codes and batch codes and, you know, batch details for all the APIs being manufactured. Does this require an entirely new set of printers to be sold, or are we gonna sell more to the existing guys? Can you put a number on how this could possibly expand the INR 1,200-INR 1,300 crore industry? Yeah. You know, specifically about the requirements to print, you know, QR codes on pharmaceutical products. Right now, the latest notification that's out is for printing on APIs. You know, active pharmaceutical ingredients don't have that type of volume. Normally they are packaged, not directly on the production line. They're packaged offline. What people tend to do is, pack them in barrels or, you know, mobile packing. What the tendency to print the label offline, and then, use a person to, basically stick it. There's a limited benefit that we will see from that. As and when, you know, it starts going down to the primary products, the actual finished formulations, which are manufactured online, then definitely we will get a benefit in that regard. You know, the pharmaceutical industry is gonna be a focus for us in terms of improving our market share and you know, so we do have a fantastic set of products for this business. Our market share is quite low because it wasn't a focus for us in the past. It's something we're taking up on and you know, definitely we expect to gain yeah in that business. Our existing printer is capable of printing QR codes. Most of the existing printers which are installed as of right now are not capable. So if the requirement comes on people's formulation line, they will require to upgrade their existing installations. You know, that depends on the government regulations and you know, each company's decision on how they wanna implement this. Is there any timeline on which when this has to be implemented? Are you aware of that? Is it first, then next year onwards, right? If I'm not mistaken. Similar regulations come out once or twice before. I mean, you know, the pharmaceutical industry has a pretty strong lobby. It has come out and has been withdrawn also. Okay. you know, I mean, I think like in general, there's always resistance to enforced rules and regulations. Of course, you know, there were some technical difficulties in actually implementing this. I would actually say like a few years ago. Now it's much easier, you know, not only as, you know, like solutions available. I think, you know, I don't know. I think this is like a, you know, very regulatory driven process and you need to wait. It's gonna come down to the government and, you know, we have wait to see this whole or idea of this whole thing. Okay. Second question, I had touched upon this in, you know, previously in a few calls earlier. Just wanted to get some sense from you on this. You know, the consumables per printer is a key number to track, right? Because the printers that you've sold is what I have termed the installation base, right? If I look at that average, you know, the last two years have been below the average. We've been selling INR 1.08 lakh worth of consumables per printer in the last two years versus the average of about INR 1.2. As I've said, you know, it peaked out at INR 1.3. Now, just wanted to ask or get some sense, have the prices been held on? Are we holding on the prices or is there a pressure on prices only or this is entirely to do with, you know, lower production, sort of utilization levels? It's more on the production side. Like I mentioned also in my opening remark, that we still believe that some of the industry there has been shortage of raw materials. So their productions are happening, but there's still a gap of about 10%-15%, where, you know, we feel that the production can be higher. So that's definitely one of the reasons why, you know, the per consumable, per printer consumable seems low. Plus there are different product mix. Like now we have different printers. It's not only the CIJ printers. So some printers have higher requirement. Different industries we are supplying to now compared to earlier. So every industry doesn't need a 24/7 production. So various reasons, Devanshu, to be honest. It's not gonna be at the same level it used to be a few years back because that was predominantly on the CIJ printers with many specific industries. Now the number of printers are different, the product mix is different, the industries are more varied. Yeah, it might be slightly lower than the earlier figures, but current figures should improve is my take on it. Sure, sure. Lastly, you know, we sold about 2,950 printers in FY 2021, which is, you know, a COVID year, and that essentially is great because if you compare it to the preceding three years, I think we were selling about 2,400 printers odd. Now, given the talks about CapEx cycle recovery and all these things, would it be, you know, what kind of numbers are you working with? Are we looking at 3,000, 3,500 printers per annum, or is that a bit conservative and can go much higher, as per you? I think we can reach close to 3,000. Even for this year we are on target, so we've done about 2,100 printers in the first three quarters. We can be close to 3,000 if Q4 is aggressive. Otherwise, we should somewhere be close to last year figures, definitely. What will be the installed capacity or what is our manufacturing capability in number of printers that we can do per annum, assuming full capacity utilization? Again, it's a mix of different printers, but you know, we are still at 75%-80%. But since it's more of an assembly operation that can be ramped up without much expense. We'll have to of course source parts more aggressively, faster, with a lower, lesser lead time and increase some workforce in the factory. I don't see that to be a bottleneck. Got it. Okay then, thank you. That's all from my side. Wishing the team all the best. Thank you. Thanks, Devanshu. Thank you. The next question is from Deepan Sankara Narayanan with TrustLine PMS. Please go ahead. Good evening, everyone. Thanks a lot for the opportunity. Firstly, wanted to get the breakdown of revenue in terms of printers, consumables, and service division. For this quarter, printers is about 18%-19%. The consumables will be about 50%-53%. Spares and service will be 20%-23%, and the rest on the mark. Okay. Secondly, also wanted to understand how is our market share dynamics in terms of our newly launched products? It's been now two to three years in terms of TTO, thermal inkjet, and even High Resolution. Are we able to successfully convert our existing customers to these new printers and new customers also, are we competitive enough in these new printers? Yeah, definitely we are competitive. That's why we are seeing that every quarter we are growing in these TIJ, TTO, and High Resolution division. These predominantly were our competitor customers because we didn't have these product in our portfolio. Over the last two-three years, we've definitely penetrated well and that is giving us a good confidence. We are competitive. That's why we are seeing these divisions grow exponentially. Okay. In terms of market share, are we, in these new products, in line with the company's overall market share or it is still way below those levels? You have to look at the market overall. Of course the CIJ is the biggest part of the market, and the non-CIJ products are growing faster. It's difficult to, you know, look at an individual product. We look at more, you know, industry-wise. What I'll say is that, of course, you know, we had a lower market share in the packaging side of business, and it's increasing. We're definitely still much less than our competitors, but we've not really lost our market share in the industrial side, but we're gaining a little bit of market share on the packaging side, and that's a bigger part of the business than the industrial side as of right now in India. You know, it's if we can gain a little bit more market share a little faster, then obviously, you know, there's a potential for us to grow faster. I think, you know, and on the packaging side, there's a more diverse mix of printers. On the industrial side, it is more CIJ focused still. Okay. From next year onwards, are we looking at in terms of revenue growth, are we able to cross 20% kind of revenue growth? Are we looking at it aggressively now? If you notice that even in this year, we are quite in line for a 20% growth if Q4 is on track. We feel that we believe that we can achieve at least 20% this year. Hopefully next year will be COVID-free, so that will give us more scope for growth. Yes, as we always mention that as a team we believe that 15%-20% is definitely achievable for growth. Okay. In terms of margins, now we are around 24%. What could be the drivers if we have to improve the margin from here on? Are we working on in that aspect as well? I think that, you know, if our business scale increases, we'll just see an increase in margins anyways. We don't have to do anything extra, you know, aggressive on that. We have had some increases in this last year because of increased costs because of COVID, you know, all around, including on the component side. We bought some things from the spot market, so there has been pressures, cost pressures on us. So I think, you know, if things just go back to normal and we get more scale, we'll see a big benefit in terms of SG&A improving as a percentage of overall sales and if, you know, as a percentage of the cost base. At the same time, we'll see an improvement in terms of, you know, the cost of materials, because right now, like I said, we have taken some cost pressures in the last couple of years, especially in the last few months, as our old stocks have, you know, been replenished and then that should help us. Okay. Lastly, in terms of this surgical mask division, so are we looking at putting up newer or higher capacity? If so, then what kind of CapEx are we looking to invest in that division? No. No CapEx or investments. Whatever current capacity we will be probably selling to US market. That's the plan currently. As the market will explore now. We just got the approval only a week ago, so it's yet to be explored. Right now, with the third wave, we are more focused on the Indian market. Okay. What is the current capacity we have in terms of masks? We'll let you know that. That's more detailed because there are different varieties of masks. Okay. More complicated. Okay. Making things. Okay. Thank you, Rahul. Thank you. Thank you. The next question comes from Swechha Jain with ANS Wealth. Please go ahead. Hi, sir. Thank you for giving this opportunity. Sir, I have a few questions. If you could help me understand the capacity utilization on the consumables side, sir. All our consumables, as I mentioned, are manufactured in the Guwahati facility, and that was operational since 2016-17. As of now, that was made with a long-term vision, and we have about 50%-55% capacity utilization. Sir, like you said, you know, you guided for a 20% growth this year and maybe a little bit higher growth over next few years. Just wanted to understand, would the growth be primarily led by our consumables business? Or you think it's going to be primarily led by the printer segment, sir? I think we'll see the same proportion as what we are now, because first we have to sell printers to sell inks, you know. Mm-hmm. Mm-hmm. Even the- So that- The previous question was asked. Printers have sold even very aggressively during COVID time, which is a good sign that, I mean, the industry still has a large demand, and they are increasing capacity. Probably more products are coming into coding and marking industry, so that is giving us- Mm-hmm. You know, the sales on the printer side. Once the printers are installed, the consumables will automatically follow, so. Right. It will be a mix of both. Yeah, I think consumables still have very much more scope considering that in the past couple of years, what we've installed hasn't really been the peak production of customers. Okay. Basically, I wanted to understand, to get this 20% growth, would we need to do some CapEx on the printer side? Because we're already at a 75%-80% kind of a utilization. Are we thinking to do any CapEx on the printer capacity? There won't be any large CapEx. It will mostly be maintenance or some debottlenecking at the factory level. We don't anticipate any large CapEx to meet this 20% growth, at least for the next couple of years. Okay. Sir, from the installed base of 14,000 printers that we currently have, could you help us understand what percentage of the printers are nearing the end of, you know, the product life cycle? Could you give me some sense around it? We don't have that data, to be honest, but that doesn't really matter because we keep upgrading our customers, the printers, even if they are not at the end of life. Okay. We know when the customer will replace. Okay. Sir, now what I understand is the printer gets upgraded, right, at the end of the life cycle. With the newer technologies coming in, the consumables required per printer, I mean, does that increase because of the technology? Or, you know, how does that ratio change as the customers move to new technology and they upgrade their printers? Normally one printer is replaced by the same type of printers, normally. You know, a CIJ- Mm-hmm. A newer generation of CIJ, you know, is replaced with a TTO. The older one is replaced with a new TTO and so on. It's not so much of a CIJ being replaced by a TIJ or a laser, you know, that sort of things. It's not so much. Mm-hmm. Mm-hmm. No major shift in consumable is what we can say. Okay. Just one last question, and then I will join the queue for the follow-up. If you could give a revenue break-up industry-wise, you know, this quarter versus last quarter, and for the nine months this year versus nine months last year. To be honest, we don't share this data on a public platform because it's not available for our competitors also, and we don't want that information to be available. Okay. No problem, sir. Not available. Do you see a shift in any particular industry that you mentioned, you know, packaging side and on the daily side? Apart from that, do you see any shift, you know, significant shift? Like Mr. Shiva Kabra mentioned that, you know, we are more focused on packaging now, maintaining our industrial market share, because the newer printers that we've launched over the last three years, they are more on the packaging side. This was not our forte, but these are helping us gain competitors' accounts. Yes, there will be some percentage which will increase on the packaging side for Control Print. Okay. Thank you, sir. I'll just join the queue for follow-ups. Thank you. Thank you. Again, if you have a question, please press star and one on your telephone keypad. Thank you. The next question comes from Saket Kapoor with Kapur Co. Please go ahead. Yeah. Namaskar, sir, and thank you for the opportunity. Sir, Rahul, sir, as earlier in our last interaction also, you did spoke about business sentiment not rising to your expected levels. Post the exit of the December quarter, how is the current business environment shaping up in terms of the demand scenario, especially for the consumer goods sector? This being the last quarter, year-ending quarter, there is always traction that we expect. What's the thought process, sir? How could the coming quarter shape up, sir, in terms of the business environment? Then my follow-up question. Namaskar, Saketji. Thank you, sir. Talk to you. Yes. Same here. As I mentioned in my opening remarks also that we believe and that the feedback that we get from our team in the field is that they still feel that the production of the customers can be up by about 10%-15% more, not in all industries, but definitely in some of them where we have a good presence. Especially like if I can just mention the pipe industry. There was a shortage of you know the raw material of granules. Many of them with the price increase and shortages had some extruders which were not running as they were previously. We feel that there is still a scope of improvement in certain industries, and that should help going forward. Q4, we are getting good response from our customers as well as the team on the field that this should be a strong quarter. Hopefully the third wave is now subsiding, so that should not be a hindrance. If Q4 is strong, like I mentioned, we should be in line for the 20% revenue growth. The loss in the margins, sir, which we have, if I take the expense side items, sir, whether it is the cost of material consumed or even the employee cost, they have not commensurate with the increase in revenue. Even, sir, if we take the quarter-on-quarter revenue, sir, we have seen a dip from INR 62.80 crore, not meaningful to INR 62.36 crore, whereas the cost of material has gone up from INR 18 crore to INR 20 crore. What explain this INR 2 crore change in the raw material? Sir, going forward, are we in a position to regain the lost part? If you could explain, sir. The last quarter, our if you see the gross margin, I don't think there is much difference in terms of percentage of a few hundred points. It's not a very large change if you're seeing the sequential quarter. If you see the Q3 of previous years, in fact, we have gained some on the gross margins, which means that our raw material is still under control. We would like this to be lower because there are certain places where we had no choice but to give price increase to our suppliers during this COVID times and even currently with the shortage of chips in the electronic market. Definitely the challenge is much more than what you're seeing in the figures. Both Mr. Shiva Kabra and myself know how much we have to struggle to get the components from our suppliers, and it's like take it or leave it in terms of delivery. Yes, it is getting tough. We have been able to manage, and I think at least for the next few months we are covered. We are not worried on a short-term basis, and we're continuously in touch with our suppliers. Sir, the point I'm trying to make is for the September quarter, September 2021. We posted revenue of INR 62.80 crore with a bottom line of INR 11.73 crore. Now for this December quarter, we did revenue of INR 62.36 crore and a bottom line of INR 10.78 crore, wherein we find the line items of employee benefit and other expenses, as well as the raw material, not commensurating with what the September quarter new numbers were. That was my understanding. What factors have impacted the margins, sir, and overall, what steps are we taking so that we can regain the same going forward? Or is it permanent, sir? Like I mentioned that definitely, and Mr. Shiva Kabra also explained that there are pressures on sourcing our components, which we are hoping that post-COVID and once things normalize, we will be able to pull back a couple of percentages on the raw material side. I would be more optimistic in comparing Q3 with Q3 because, you know, that is a more better comparison. If I do that, then from INR 54 crores of sales, we've gone up to INR 61 crores and up 12.7%. The profitability has gone from INR 9 crores-INR 11 crores, which again is an up of 19.4%. Q3, again, explaining that further is that it is traditionally a weak quarter for us, and I mentioned it in my opening call, that this INR 61.2 crore of revenue is the highest Q3 for Control Print in the past six years, or ever if I can say. Let's look at it optimistically, that Q3 has also been strong for us. Q4, like I explained, will hopefully be in the same line and we should deliver 20% growth. I'd like that. I would say that certain things will definitely improve from here, both in terms of margin and revenues if things are more in a steady state. Correct, sir. Sir, even when we look at the notes to accounts and also the auditor remarks for the company wherein we have made a small investment, not small, but Innovative Codes, their performance are also a drag on a comparative level. Sir, what steps are we taking there to improve the business and where are we, sir, in terms of getting Innovative Codes also upscaling themselves? Other points are about, sir, any update on the Liberty Chemicals real estate part and Videojet case, sir, if you have anything to share on. Innovative Codes, you know that we did our investment only in August 2021, so it's still a baby right now. That was their first year of operations. The coding and marking industry, as you know, Kabra ji, take as a gestation period, wherein first we have to install printers and gain our customers. That is the phase where you have to bear the expenses. Post the 1.5-two years of this gestation period, when the consumables and all are fully being sold in the market, that's when the profit starts rolling in. We did have a board meeting of Innovative Codes, and we have reviewed the situation and it seems to be in line with the coding and marking industry. We are hoping that post Q2, Q3 of next financial year, this thing will turn around and it will be in the profit zone again. Considering one and a half years gestation period for Innovative Codes, it's a good start. We have a strong team. We are still in getting more people on board, so you know, employees have to come in, their course have to be gone for a couple of months before they start delivering. We are not worried on Innovative Codes. Be a little patient. Control Print has enough. Control Print can carry it for a couple of years and then it will start giving its own share in our revenue as well as our profits. Definitely it will be profitable maybe in Q2, Q3 or 2022, 2023, if things are normal. Coming back to your other second part of questions, regarding Liberty, there is no change on the real estate side. Even on Videojet, most of the courts in Mumbai are still not fully operational. They did start post the second wave for a couple of months, but again, only taking the urgent cases. I believe now with the third wave, again, things have slowed down. As of now, there's no development both in Liberty as well as Videojet case. As of now, sir, for the Videojet part, we have made the sufficient provision as per the last order. That is to be- Yes. For which case we made a fixed deposit with the patent authority. Okay. What is the amount, sir? We mentioned it INR 2.6 crore. Okay, sir. Lastly, sir, on the utilization levels at our Guwahati manufacturing unit, sir. I think some capital work in progress was also due. Some renovation parts was also required at Guwahati, if I'm not wrong, and their levels were also lower, on the lower side I think on the consumables. How is the Guwahati plant operating currently at what utilization levels? mentioned it in the previous question that Guwahati is at 50%-55%, so there's definitely no bottleneck or capacity issue. I think you're mixing it up with the Nalagarh, where we were doing some expansion of our stores and production facility. That has been done and capitalized in Q3. About INR 4.5 crore-INR 5 crore we have invested there, which is the major CapEx for this financial year. I think they're not doing anything large. It could be less than INR 1 crore or some machines, I'm not sure. No large CapEx in Guwahati that I recall. Okay. On the Guwahati plant, sir, we are now harping on the increased level of performance from our user industry, then the utilization levels for the consumables will go up. That is what we are working out with. For at least the next couple of years, we are comfortable. We are comfortable, sir. Right. Yes, sir. Yeah, I'll come in the queue, sir. All the best, sir. Yes. Thank you. Hope you're happy. Yes, sir. Hope you're happy with the results. Yes, sir. We are, as per our understanding now, sir, as you have told, looking for a minimum growth of 20% on what we closed last year. That is what you are- Yes. package. Hopefully Q4, we will give you the good news. Good numbers to expect that. I will come in the queue again, sir. Thank you. Thank you again, sir. Shiva sir, and thank you, Sachin, sir. Thank you. Thank you. Thank you. The next question comes from Shalabh Agarwal with Snowball Capital. Please go ahead. Good evening, everyone. Thank you for taking my question. Congratulations for the good set of numbers, sir. Thank you. The first question is, you know, this is at the industry level. I wanted to understand how easy is it to get accounts from competition, especially the three MNC players, because they may be having global ties with some of the bigger, you know, say, FMCG players in India. For these customers, you know, given the cost of printing, there might not be much incentive to really change the vendor. Just wanted to, you know, check how do we, what are the possible levers available to us to make inroads in such accounts? You're correct that the customers in our industry are generally loyal to their vendor. Getting a competitor account is never easy. Nobody wants to reinvent the wheel and get a new vendor when things are running well for last 10 years. It's only when the vendor supplies and there's always an unhappy customer or unsatisfied customer. That's when we get some way to enter. That was the traditional way of thinking. Now, you know, we have these new products, so, you know, we are able to exhibit the complete range to our customers, which we have been harping that gives us a good entry even to competitor accounts, where we have not been able to open the doors for maybe more than five years now, in spite of, you know, giving them the best of offers and service commitment. But now with this new product, we have seen a complete fair opportunity given by our new customer. Being competitive, a made in India manufacturer has helped Control Print. We always proudly exhibit our service commitments to our customers. Service is a very essential part of our coding and marking business because, post-sales, you know, the printers have to run efficiently. Though our competitors are multinational, they are strong players, we still are able to break some accounts and over the last two years, definitely much more than we were doing previously. Sure. Makes sense. also anti-incumbency. In spite of doing everything right, you tend to lose customers. Maybe that's also in our favor. Sure, sure. Sir, one of your customers had started, I think two years or 1.5 years back, a factory in India, and it's a big factory for them. Have products started rolling out? Has that changed certain dynamics in the market or your price advantage, at least to that one competitor? Basically, again, it's more of a screwdriver technology like Mr. Shiva Kabra keeps mentioning. It's not like they manufacture the printers the way Control Print does right from the assembly level completely. They probably bring it down in knockdown condition and just putting three, four parts together to call it an assembly. We are not much. We've not seen any particular change in the industry including their supplying. Sir, any change or any difference that you can, you know, spell out in terms of, you know, the feet on street or the number of people or the accounts that you manage, because as you said, it's a highly service driven industry. In terms of where Control Print is it managed to score better than the other three MNC? Yeah, there was some background noise at our end. Could you just shorten that question and ask? It wasn't clear. I was asking, you know, is there any advantage that Control Print has in terms of, you know, people on the ground, you know, because as you said, it's a highly service-driven industry compared to the other three MNC competitors in India. I think we've got a very good service network and a faster response time than our competitors. You know, I wouldn't say necessarily we would have a big advantage in terms of number of people only. I mean, of course, we have more people because we have our factories here, and therefore we have a good amount of people in manufacturing and so on. I think in terms of our advantage, I think we've got a set of products, you know, and team overall. It's just about focusing on executing our strategy, you know, with a good set of products and, you know, strong service. I think if you're consistent over a period of time, you get results. Sure. Sir, lastly, just quickly, how much non-CIJ printers contributed for this quarter or for nine months, broadly? We don't have that split between CIJ, non-CIJ, but total, we sold, like I mentioned, about 2,100 printers. I'm asking in terms of revenue, sir. Broadly. Revenue, yeah, their share is definitely increasing. Earlier it was about 13%-15%. Now it's gone up to about 17%-18%. Okay. Thank you, sir, for taking my questions and all the very best. Yeah, thank you. Thank you. The next question comes from Swechha Jain, with ANS Wealth. Please go ahead. Hi sir. Sir, I have a few follow-up questions. One, I just wanted to clarify, you said the number of printers that we sold for this nine months is 2,100. Am I correct, sir? You're right. Sir, like you just mentioned, non-CIJ share from you know printers in revenue is increasing. It has increased from 15% to 18%. I just wanted to understand what is the advantage over you know selling non-CIJ printers more as compared to you know CIJ printers. Is it that the consumables that is used is higher in non-CIJ? I mean, how does it benefit us? No. What happens is that there are different technologies, you know, and each is, you know, best suited for certain applications. Continuous Inkjet CIJ is the most broad-based technology. Most of the other non-CIJ technologies, for example, you know, cannot work across a wide range of applications. For certain specific applications, they are superior to CIJ or specifically more than, like you said, more than being anything, what I think is that they require less service. You know, customers don't like to rely upon engineers to come in. You know, they don't wanna rely on something like that. I think that's a big part of the entire attraction of the non-CIJ products. Like I said, it is better in certain applications. Consumable-wise, it depends on the application, but in general, the consumption for printer is higher. The service is of course much lower in terms of the service cost. Yeah, maybe same amount of overall. Okay. money involved. For us, from a strategy perspective, it makes more sense to increase our share in the non-CIJ kind of printers, right? Okay. I mean, directionally, how does it work for us? Focused on that, it depends on the application. Suppose I'm, you know, printing on the pharmaceutical industry, the thermal inkjet is best suited for that. If I'm printing on, you know, biscuit lines, the thermal transfer overprinters are best suited for that. If I'm printing on a certain automotive component which I need to track in five years down the line, you know, a laser printer is best suited for that. If I want to print on a wide range of products, you know, the continuous inkjet is best suited for that. Print on cement bags, drop on demand. You know, it just depends so much on the application, you know. What I'll say is that we were not covering all the applications very well or, you know, with the best technology for that specific application. It's like saying, you know, there's a pickup truck. Pickup truck has its own, you know, use, even if it's not the biggest part of the market, but it does some things better than a MUV, and that does some things better than a passenger car or, you know. Mm-hmm. That's what it is. Okay. Just wanted to clarify, I think you mentioned that we did INR 4.5 crores-INR 5 crores of CapEx till now in this year, and that is on the printer side? I kind of missed that part actually. Yes, it's in our Nalagarh factory, so you can say it's on the printer side. Okay. Sir, in the last call, you know, we had kind of, you know, gave a broad guidance that, you know, at some point in time, we can reach kind of INR 300 crore or INR 400 crore kind of, you know, revenue as the industry expands towards INR 2,000-INR 2,500 crore, you know. Just wanted to understand, you know, if you could just, you know, broadly, you know, give some guidance as to do you think this INR 300-INR 400 crore of revenue can be achieved by us, like, say after five years from now? I think we're definitely working towards that. Like, this time if we get 20% increase, we'll be close to about INR 250. Then post that we establish INR 300, INR 350, INR 400. Yeah. Again, the market has to support. We are all geared up. We have the product range, we have the finances and the team on the ground. Things are positive, but of course we need some external support to reach that level. Right, sir. If it's possible. Okay. Great. That's all from my side, and all the best. Thank you. You're welcome. Thank you. The next question comes from Saket Kapoor with Kapur Co. Please go ahead. Yeah. Thank you again, sir. Sir, firstly, about the new launches and about our technology partner coming up with the Internet of Things, the internet-enabled printers. Where are we, sir, in on that front, sir? Basically, yes, the new printer is ready. It's just that we have to arrange the parts and the board. Hopefully in beginning of next financial year, we should launch our new printer. We are working on it as of now. Sir, those will be to a specific industry or the entire industry we are servicing, sir? No, it will be basically a CIJ printer. It will be the new launch, a newer version of the CIJ printer. Wherever, whichever industry it is going to be utilized, it will be available. Okay. What kind of price differences will it come up, sir, because of this new features? We will work out the modalities when we launch it with our marketing team. Okay, sir. Sir, we also thank the board, sir, for the interim dividend of INR 4. Sir, what is the current cash on the books, sir? What is the current size of our investment portfolio? Let's see the balance sheet for March, Saket. You know, once it is available to everybody. Oh, okay, sir. I just thought to get a ballpark number, if how much cash is there, sir, that you maybe if you can share. For that, no, we are quite debt-free, so not much on the cash side. We'll wait for March to declare all the figures. Okay, sir. Sir, we had some issues with the cement players, sir, the red ink and the blank black part also on the bag. What kind of revenues are we now getting from the cement players, sir? Any changes on that front? Like I mentioned in the opening remarks, last two, three quarters we've seen a good momentum on the LCP business. Some of the cement customers which we had lost were also coming back with contract for three years with us. Things are more on a positive note. The pricing is tight, but we are trying to revive the market on the revenue side. We are gaining some lost customers and definitely it's on the up. Last three quarters we've gained business. Okay, sir. On the new customer addition, sir, any new industry or vertical that we have added? Have we strengthened our presence more in the dairy segment? I think so earlier we did put strong push on. I think it was one big order from Gujarat government cooperatives for dairy business. It is very well for us, as well as there is good focus and traction from wood and foam industry. These are also, you know, picking up very fast. Yes, certain sectors we are seeing a good traction. Even on the FMCG side, some good customers have purchased from us, and that can go into multiple printers. We've been able to see some breakthrough in a couple of factories. If we perform well, we can probably expand to other factories. These are our competitors' accounts, so we are quite bullish over the next few quarters. FMCG you said, no, sir? I didn't. I overheard you. Yeah. Yeah, FMCG. For the FMCG segment, sir. Right, sir. Correct, sir. Thank you for all the replies, sir, and hope to hear from you going forward also, sir. Thank you. All the best to the team, sir. Thank you. Thank you. Thank you. Only lastly, sir, I just missed the depreciation part, sir. Out of the total depreciation of INR 11 crore for the nine months, how much would be attributable to the mask segment, sir? For mask, you know, like we've taken an aggressive depreciation policy so that, you know, the investments are quickly recovered. Mask would be about 60% of that. Okay. We are done with it, sir, or by this year it will be totally depreciated? Meaning the maximum portion will come out of the INR 10 crore investment, I think so 5.5, six is done till this year. Maximum has been done, but I think by about within this calendar year, we will be able to complete the mask depreciation. By 2022 calendar year? Yes. Thank you again, sir, and all the best, sir, and I hope to hear from you. Thank you. Thank you. Thank you. The next question comes from the line of Karan Bhatelia from Asian Markets Securities. Thank you. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, we've seen a strong improvement on the working capital side. Your comments would be very helpful. No, like we always, you know, there were the concerns of the investors and the analysts on the, working capital being on the higher side. We always mentioned that we do need a minimum amount of, especially on the inventory to service our printers, which are, you know, in the market. Even some of the, you know, obsolete printers, which we are, not manufacturing, but they are present in the market, need certain spare parts which need to be available in our inventory. That was the reason, we were carrying. If you will notice that the inventory is, not increasing in line with revenue. We are getting that advantage that we always knew with higher revenues we will be able to hold on to inventory. That's one of the major gains that we are seeing, and hopefully that can further improve by a good 10-15 days further improvement we can see. Great. Now, you know, talking about the launch of a new version of printer. We'll have to see how that plays out, because new parts will have to be in the inventory. We don't see a full-fledged production of the new version of printer. The old version is not completely, the stock is produced and put out in the market. Transition period, maybe there will be some overlap of parts and there might be a few INR crores of increase in inventory, but we'll see as it comes. As of now, it seems that we can push back some more 10, 15 days. Even on return, on the receivables side, we have a good team now. We're controlling it centralized from Mumbai. Earlier it was more at the branch level and so maybe now that they're running a tighter ship and we've been able to pull back some days on the receivables. I would give more credit on the increase of revenue and us holding on to our inventory and receivables. Got it. Great. Just to remind Hemant, any follow-ups from any of the participants? Uh, if you have a question, please press star and one. I don't think there are any follow-ups. Thank you, Rahul. Thank you, Shiva, for giving us the opportunity to host the conference. Any closing remarks you want to make? No, I think, thanks everyone for participating. You know, it's a very busy day today, and the way things worked out, we were initially supposed to be a little bit earlier in the week, but there were some, you know, delays and that we had this day. You know, definitely looking forward to all of you guys remaining safe and interacting with all and yeah, as soon as we've got our next meeting and the next set of results. Thanks. Thank you, everybody. Thank you. Please be safe and healthy. Yes. Thank you. Thank you. Thank you, Karan, for hosting. Right. On with this, we end on this call. Thank you, participants, for logging to the call. Thank you. On behalf of Asian Markets Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Bye.