Good day and welcome to the Q3 FY23 earnings conference call of Control Print Limited, hosted by Asian Markets Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from such expectations, predictions, et cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks. As a reminder, all participant lines will be in the listen-only mode. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhatelia from Asian Markets Securities Limited. Thank you. Over to you, sir. Thanks, Michelle. Ladies and gentlemen, good evening, and welcome all to the Control Print Limited Q3 and 9 months FY 2023 earnings conference call hosted by Asian Markets Securities. From the management side, we have with us Mr. Shiva Kabra, Joint Managing Director, and Mr. Jaideep Barve, Chief Financial Officer. Now I would hand over the call to Jaideep for his opening remarks, post which we shall open the floor for Q&A. Thank you. Over to you. Hello, everybody. Good evening to you. I'm Jaideep Barve, the CFO of Control Print Limited. Welcome to the earnings conference call for the Q3 of the financial year 2022-23. Appreciate that you've taken out time from your busy schedule to attend this one. Hope you all are safe and healthy and wish you and your family a happy and prosperous new year. Mr. Shiva Kabra, the Joint Managing Director of Control Print Limited, joins me on this call. For the detailed presentation has already been put up on our website as well as in the investor presentation notification on the exchanges for this call. For those who are probably reviewing this company for the first time, we would like to mention that Control Print Limited is in the niche coding and marketing segment. This is an oligopoly with just four major players, three of whom are multinational corporations. Us, that is Control Print Limited, is the only big Indian manufacturer. We have two manufacturing facilities, one in Nalagarh in Himachal Pradesh, and the second one in Guwahati in the state of Assam. At Nalagarh, we manufacture printers. In Guwahati, we manufacture certain types of printers and the consumables required for our operations. We've got a strong sales and service team of 350+ engineers spread across the country. At the back end, we've got a robust SAP ERP system which takes care of all financial production processes and sales. We also have an integrated CRM system. Thus, we provide maximum transparency in accounting sales, after sales, as well as raw material planning and order to receive collection procedures. Our systems and processes are robust, and they give necessary confidence to the team, vendors, customers, bankers, auditors and investors. We do have a widespread customer base catering to multiple industries like pipes and cables, metal, auto metal, food and beverages, dairy, FMCG and pharma sectors. We've got a robust IB base spread across the country. At the moment, we are about 16,500+ printers across industries. Let me give a brief analysis of the standalone financial statements of Control Print Limited for the Q3 of FY23. On an overall basis, our manufacturing activities in the Q3 continued with a rising momentum as most of the industries who take the printers and consumables from us also continued the production and met their higher demands. However, we believe that it is still not at optimum level. We think there is a lot of scope of improvement, thereby, our printers as well as consumables business also is going to increase. On the revenue front, there was an increase in the printers as well as the consumables business in Q3. Both printers and consumables registered strong growth patterns. Our service in portion of revenue continues to be stable, so as is the sales portion of the revenue. The revenue for the quarter witnessed a year-on-year growth at 20%. We continue to penetrate competitor accounts in key sectors like pipes, food, FMCG, dairy, cement and pharma. Our overall industry performance in the nine months is still largely dominated by the pipe sector, followed by the food, FMCG, dairy and cement. In the plywood sector, we have achieved good control, and probably we are top, the most dominant player in the sector. In the sugar industry, we've consolidated our position as one of the key market leaders. In the consumption side, we can only say that the gross margin for the quarter two, quarter three has dropped as compared to the previous quarter. This is mainly because of raw material purchases at high rates in the spot market. The management is working at a strategic level to optimize inventories so as to sustain any probability for shortages for a period of further three months. Employee costs as a percentage of sales have come down marginally, but overall these are the same levels in absolute numbers as compared to the Q2. Acquisition and other expenses are steady as in compared to the earlier quarters. With reference to the profitability levels on a year-on-year basis, the EBITDA, the PBT, PAT and EPS have grown by approximately 30%, 45%, 42% and 42% respectively. Company maintains healthy margins. The EBITDA has been stable at 26%-27% for the last six, seven quarters. We feel that still exists a considerable scope for improvement in EBITDA because higher revenues will come and obviously there will be economies of scale attached to it. For us, the way forward is we look forward to higher consumable sales which improve industrial production. We've launched a new product in the LCP treatment. Our earlier product range has almost stabilized in the market now. In marketing, we are focusing on the key accounts. Our install base will increase the future, thereby we will increase our market share. As you all know, we have established a holding company, Rayvens, which has acquired another company called Markprint. We expect some good traction with them. Obviously last but not least, new technologies are being explored. With this brief background, I leave the floor open for any questions. We shall be open the floor for the Q&A session. Yeah. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question can please press star one on their touch tone phone. If you wish to remove yourself from the question queue, you may press star 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. You may press star 1 to ask a question. We have the first question from the line of Deepan Shankar from Firstline PMS. Please go ahead. Good evening, everyone. Thanks a lot for the opportunity and congratulations for a good set of numbers. Firstly, Jaideep, can you please provide the breakup between printer, consumable and other bit of revenue? See, printer revenue would be about 20% of our revenue. Consumables for this quarter would be about 57%. Services would be about 13%. Spares will be roughly about 8%. Okay. Okay. Okay. We have seen consumables growing at a better rate than even printers. The product mix profile has been favorable for us. Still, gross margins has been lower here. Any specific reason for that? Well, the gross margin as compared to the sales, basically because, you know, like, we are a company which is depending on semiconductors and chips as well as electronic boards. Right now, not just us, but you know, the other players in other markets as well as the other players in the other sectors. You know, everybody's facing shortages of such components. As a result of that, I mean, as a strategy, what we are doing is that in order to make sure that we have the required materials for the production, we are buying it at a spot market. We also have got contracts with our regular customers, regular suppliers. You know, the lead times with them are quite high. Just to not fall out of stock and not to have a situation where, you know, we have orders, we cannot, you know, execute them, we are, you know, like, buying at higher prices and making sure at least we are having a risk conscious attitude in our work. Shiva, you might wish to add anything on this? Yeah, I think it's put well. I think that there is basically some cost increases that have happened. you know, we've not maybe acted proactively to, you know, increase our prices to our customers. we're sort of looking at that. We're working on that. It's a slow process because of course everyone is resistant to that. you know, hopefully we'll get enough of a price increase to cover the, you know, the cost increase that have come our way. I think, I will say that, you know, some of the cost increases look a bit more permanent in nature now. One set of cost increases because we bought things from the spot market to fulfill our shortages. One set is also that I think some suppliers want to raise the price. You know, so that is the way it is. We'll have to respond by, either, you know, re-engineering things or looking alternative suppliers or, you know, convincing our customers to pay more and working on all three fronts. Okay. Okay. Okay. If I understand correctly, so the gross margin from the printer business has gone down substantially, but consumables remaining at the same level. But if we can pass on the prices to customers, so our margins can improve from here on as such, right? A little bit of all. I think the consumables, like, of course, like I said, the gross margins were very high. It might have gone down by 1% or 2%. You know, the price increase has been across the board 1% or 2% on an overall basis. You won't feel it that way. Some items which are short have gone up drastically. They have gone up 100%, 200%, you know, certain chips or other things. Yeah, definitely see more on the printers because the printers are, you know, sold on a, like, almost no profit basis. Yeah. cost increases are being definitely affect us a lot harder. you know, I mean, there was a shortage, so we had only two choices, either you pay or Sorry for the last, you know, couple of years now. Okay. What happened is that, you know, I guess, yeah. It is, there is some higher cost inventory because there some spot market prices which will at least moderate for sure, when the rest is exposed. Okay. Okay. Okay. Lastly from my side, with food and pharma being a dominant sector for these MNC players in our sector, how is our market share improving there? Are we getting good reference points from our existing customers to expand into these space to improve our market share? You're talking about the pharmaceutical market? Yeah. Food and pharma specifically. Yeah. Yeah. We've been increasing our percentage of sales there. What happens is that I think, overall in this quarter, you know, there's been a bit more production normalization. You know, even in some sectors like pipes or other segments of ours, there has been a bit of fluctuation because, you know, we've had some increases in resin prices or, you know, decreases. I'm not sure actually what happened, but there's been some fluctuations. Even their production has been affected. You know, basically the construction material segment, you know, has been affected more up and down on some of the more industrial segments. Because they sort of come back to normal, the growth that we should have, you know, gotten in the last one or two years by selling the printers, we didn't get so much. This time, it's just that they're buying, you know, fluids at a more normal rate. That's where we've got a result. I think, you know, obviously our overall percentage of food and pharmaceutical, dairy, food and beverage and so on is increasing as a percentage of our overall revenue. Ours is still industrial, you know, a little bit more industrial dominated. But, you know, it's improving. It's becoming more balanced. It will go towards 50/50 if it's completely steadily. Our market share in specific segments is also improving. Okay. Okay. Good to know. Thank you, and I'll come back in the queue. Thank you. A reminder to all the participants, anyone who wishes to ask a question may please press star and one now. We have the next question from the line of Nirav Parekh from Medit Capital. Please go ahead. Yeah. Hi, good evening, Shiva and Jaideep. Thanks for taking the time. My question is on the, you know, Markprint acquisition. Can you talk about the performance of the company? What was the revenue, you know, in 2022? Secondly, you know, we had plans to kind of bring some of those technologies into India, and, you know, modify it with our printers, et cetera. Where are we on that, journey? I can take your second question, but Jaideep will answer first question. I think I'll just be honest with you. We've been consolidating them from July 4th or something in sometime earlier this year, I don't know if we're allowed to talk of the prior period before that. You know, that also is something which we need to work around. Yeah. Nirav, just for your benefit, as rightly said by Shiva, I mean, the acquisition happened on the 4th of July. From 5th of July onwards, we are consolidating. I mean, the period ended December. It looks good. We've got half a million euros as the revenue and one tenth of it or 11% of it goes as a net profit for the company. Yeah, Nirav? You are there? Yes. Yes. I got that. My second question was on the, on the technology bit from Markprint. Yes. We're a bit behind on that. We expected to, you know, maybe have some things starting by the end of this year. Maybe we'll only see that towards like practically March of this year. You know, what happens is that their mentality and their year ends December 31st. They also had some orders that they need to execute. They were really quite busy with that, you know. You know, there was no time to work jointly on development or other types of projects because they had their own business that they had to execute, which was their priority for the last two, three months. That's the situation. We've got some stuff lined up, I think, a much more consolidated strategy in the coming year. I think in 3-6 months, we should actually see, you know, some things come out. My experience is that we'll have to revise some of those things because, you know, improve them and, you know, modify them for the, for the market that we are in. You know, also to eliminate all the bugs and the issues that actually happen. Some optimization will happen. Then we have the products which are, you know, very solid for the market probably in, like, 12-15 months, because we have to wait 18 months sometimes. Understandable. Got it. Got it. Thank you. Yeah. My second question is on the track and trace technology. You know, on that again, are we seeing any progress with customers? Is it current on you and, you know, what would be our plan on that one going forward? Actually we're working quite aggressively on that right now. There is, you know, some different requirements that are there. I can't talk about specific customers or other things, but in general, in the pharmaceutical industry to continue requiring the same domestic requirement, I think the government is not gonna go back on, you know, some requirements that they've asked. You know, it, that should be interesting also. Yeah. The thing is, I think these are much more difficult executions because, like I said, We have sort of come from behind in this market. We didn't have the solution earlier. What's happened was, as a result, you know, customers also give us the more difficult projects where you're not able to get solutions easily. you know, it's like a bit of Catch-22, you know. What's happening in our experience also needs to improve. It's a bit of everything, you know. Definitely, it is going on reasonably well, is what I'd say. Got it. Financial results are not there, we're making progress. Like there is some financial results. It's not enough to make any difference to our top line and bottom line. You know, we're making progress on them. Yeah. Understood. Understood. Of course. I think that will take a couple of, you know, that'll take a few quarters. Just from a product perspective, Would you say that we have a product in place and now, you know, it's just about more getting customers and installing it, or are we still in the product testing and getting the product right phase as well? A bit of both. We do have a product and we are optimizing it as we go. What happens is, you know, different customers have different lines, different requirements. You know, a lot of times different handling systems come in, you know, different types of printers and vision systems or scanners come in. You need to keep improving. Like, what will happen is you'll develop a standard product. The customer will have some, you know, various requirements that you'll say, "I want to print on a injectable or vial or something." You have to develop a solution for that. Someone will not have space on his thing, you know. Someone will need to print with the invisible ink and then scan it with a specific type of scanner. Some people want an OCR or a, you know, like, not just a Katunji scan. The different sorts of requirements that come up, you need to cater to all of them because. Yeah, so what you do is you sort of have a standard, just like making a standard car, and then you have like an automatic version and a four-wheel drive version and this. You know, you made the standard car and you gotta keep doing all those things because that's what specific customers want for their specific, you know, for the specific line's demand, and we need to cater to that. Right. Understood. Last question. I hope that answered with the explanation. Yes. Yes. No, that is very helpful. One last question then I'll come back in the queue. Based on your sales and service team, you know, how big is that team today and how has it grown in the last maybe six, nine months? And, you know, are there in terms of coverage of clients or getting new clients, like are those any particular metrics that you track and you can share, you know, from sales and service perspectives? How many people exactly do we have approximately in the? Chief of engineers, spread between sales and service. 350. Okay. How has that grown and do we plan to, like, expand that again, you know, further in the coming quarters significantly or something? As of right now, we have enough to cover what the market is. We might need about 20 to 30 more salespeople. Maybe a few specialized service people. Because what's happening is, like I said, you know, things like track and trace come up or, you know, like Markprint type solutions. Honestly, these are not like product sales, which is what we do. These are like projects. Yeah. You know? People have to study the line, you know, integrate with their parent line, you know, get data from their SAP, integrate it, send it back, you know, put it to the cloud and click an SMS authentication. All sorts of things that happen. It's a different type of, you know, also it requires a skilled person, but also you know, these people who've got a sort of cross-functional mentality. They understand not only the electronics, but also definitely a lot more software expertise, you know. Also a bit of mechanical skills because the actual handling of the products and, you know, that part is quite important. Yeah. I don't, I don't think we make large numbers of people. We need, like, you know, people who, it's like, you know, that type. Got it. The INR 350 is comparable to competition in the sense size adjusted, like are we at par in terms of coverage or would competition have more or less for the same size of revenue? I think we could probably have a similar team compared to Videojet and Domino. I think Markem-Imaje might be a bit smaller from what I recall. Similar teams. Maybe in fact, our team might be a bit bigger than Videojet and Domino on the service side. Maybe not on the sales side, but on the service side, yeah. Could be. We've always emphasized like a high quality of service. I think... I'm quite sure we have, you know, at least, you know, 30%, 40%, 50% more service engineers than them. Got it. Thank you so much. This is very helpful, and all the best. Thank you. Thank you. Participants who want to ask a question may please press star and one now. We have the next question from the line of Karan Bhatelia from Asian Markets Securities. Please go ahead. Thank you for your opportunity. As far I recollect, we had one order which was, you know, yet to be executed completely, 70 TIJ printers for the brewery company and a couple of laser printers on the export. How are we standing as of now? I think we must have executed all outstanding orders. There's always some at the end of every quarter. There's nothing like major that's outstanding. You know, Normally, in fact, we don't talk about specific customers or some of supply. I actually didn't know we had ever disclosed anything like that. Yeah, there's nothing specific that's major that, you know, warrant a public announcement, I think. Yeah. Because I'm referring from the, Q2, so. yeah. Jaideep sir, what could be the- Yeah. Those would have been executed. Those would have been executed. Okay. We've had some, like, supply chain issues throughout. You know, even now we have some, but we are, you know, trying our best to work through it. Yeah, there have been times when, you know, there have been some backlogs and then they get reordered, and the new backlogs and things like that. Yes. Right. Right. That was it. Jaideep Sir, volume printers this quarter and volume printers on for the Q2 as well. I would imagine we sold 800 plus printers in Q3 and about 675 + printers in Q2. Thank you. Thank you. That's it from my side. Follow up later. Thank you. Before the next question, a reminder to all the participants, anyone who wishes to ask a question may please press star and one now. We have the next follow-up question from the line of Nirav Parekh from Medit Capital. Please go ahead. Yeah, hi. Thanks for the chance again. My question was on the mix between CIJ, non-CIJ, for this quarter, and also if you could talk a bit about, you know, where do we stand in the non-CIJ category now in terms of, say, market share with some of the other players? Yeah, Shiva. As far as market share goes, I can only say this, that, you know, it's not possible for us to disclose because we only have an idea of how other people are doing, right? We do get their numbers at the end of every year from the Registrar of Companies, but there's no breakup of anything from their side, right? I mean, it's a very broad level of, you know, sort of a breakdown. Right? It's just a revenue number and, you know, expenses and profits and so on. You know, it's really difficult for us to know what their mix is. It's, it's just an idea. I do believe in the thermal inkjet and the TTO, you know, the high res space, we have, we have, you know, two good products and we're doing well there. In the thermal transfer space and the laser space, we are more competitive than what we were before, for sure. Especially in the laser marking space, we have picked up to some extent. Yeah, the CIJ market is still the main market, but as a percentage of our revenue, I think non-CIJ has definitely increased. Some of our growth has also been, what I feel like, you know, the non-CIJ would have also contributed to growth, you know, significantly, not just the CIJ. Jaideep might give you, like, a better overall number on this. Yeah. Jaideep, do you have the numbers? Well, I have the numbers, but, I mean, these are strictly confidential numbers, the breakup. I mean, we wouldn't give out this payer side. Okay. Okay. Understood. Fine. Got it. My final question is, I think you'd mentioned around INR 400 crores, you know, is what you are looking for, you know, as a year two target. I think maybe 2024, 2025. Just want to understand, you know, in that journey, you know, where do you think, we are and, you know, what are the two, three things we need to do to, you know, get there and by when we can get there? Yeah. I mean, actually, I think that target was sort of put out by our board, you know, and they sort of put that as something that we should aspire to at least. I think we're doing fine on the path out there, and we should get there, you know, approximately in the, that those dates if things go well, you know, of course. You know, it'll also just depend overall on the broad economy because in the end, you know, we are not supplying something direct to consumer. We're supplying, you know, some products which are then resupplied to consumers or businesses elsewhere. Obviously we saw with the COVID and then of course, you know, with some variations that happened with the Russian, Ukraine situation, they can have, like, weird effects on the, you know, on various markets. Yeah, you've seen some fluctuations on our own side in the last two-three years now. You know, assuming things are, like, okay, I think we should get there. There are other opportunities you have to tap, like you said, if the trends and rates like the market. I don't think everything has to go well, but we have to have enough of things going well to get that extra boost to get there. That should happen, I think. Got it. If I heard you right, you're saying INR 400 crores should be like the FY 25 target? Yeah, absolutely. That's what the target that has been set for us. You know, we are obviously trying to meet that expectation. Got it. Understood. No, that makes sense. Thanks a lot for taking my questions. All the best. Thank you. Thank you. We have the next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Namaskar, sir. Thank you for this opportunity. Sir, sorry if maybe my questions will be repetitive. I was pretty late to join the call. As we have seen the nature of our business, quarter four is traditionally in terms of revenue, the best quarter. Of course, taking into account what has historically, is there a very good likelihood that we will be having Q4 also traditionally the way it has been over the last few years? I mean, it's not possible for us to predict because right now we're only, I don't know, 18, 20 days into the quarter. We'll obviously, you know, be able to know, like, you know, maybe in two months, two and a half months. The market seems okay. Like, I don't think it seems bad or good or anything. Like, as of right now, it seems stable. You know, that's all I would say. Because- It all depends on how we perform. You know, I wouldn't say if the market is overly booming, I wouldn't say the market is overly bad. Obviously, compared to the ups and downs of the last two and a half years, it's a better situation. You know, it's for us to perform, I think to get that continued level of performance and that's our situation. Yes. I can get your point, but what I was looking was is on a sequential basis, we have seen growth in our revenues, top line, bottom line. Seasonality factor or the year-ending part or whatever the floods that we get in advance from our customers also give us some un-understanding. You are very correct that we are only even not even 10 to 15, 18 days into the quarter if we take, exclude the holiday. A fair point that we won't be able to comment on the same. We are taking into account how the business environment has shaped up over the past nine months. There is a very likelihood for us to keep this trajectory. This could be a good understanding. Sir, if I look at now- You don't project. No, I'm not projecting. Yeah. Correct. For everyone's assumption, you know... Assumptions. Yeah. Yeah. Correct. I think as of right now, I don't see anything unstable in the market. Like I said, I can only say that the market doesn't seem overly positive. It doesn't seem only overly negative. It just seems like a normal situation, which for us, like I said, even after these ups and downs or, you know, even with the supply chain situation stabilizing to some extent, you know, it's good because it just means, you know, things are, you know, with less external factors controlling everything. I can't. Like I said, we can't predict. I don't do any project, you know, as far as for any other time goes. Yeah, I mean, hopefully we'll have a good quarter. We'll see, you know. At the end of three months, I'm probably 24, 20 or whatever the days and, you know, I'm sure we will make it. We'll have the numbers on the table that day. We should have patience. When the board looked at this number of INR 400 crores top line, the projection for FY 2024, 2025, how likely would be the mix from the consumable segment and the printer segment? What are we factoring in when we are looking at a INR 400 crore top line? In terms of the consumable percentage at board, yeah. I don't see the mix changing too much. We are already at a good mix. Can you comment on what the mix has been for the quarter? Very sorry to interrupt you. What was the mix for the consumable? Could you please repeat? I'll repeat it. This is Saket. It is for the Q3, about 20% of the revenue came from printer, 57% came from the consumable, about 14% odd from the service and the space contribution 8%. Roughly 100%. Yeah. Correct, sir. Sir, how is the performance of our investments we have made in the two companies, Innovative and the Netherlands one? What are our programs? What are we envisaging going ahead for the next two years? How are these companies going to contribute to Control Print, these two investments? I think we just answered this question about Markem, but if you could repeat these again, just give me one. Yeah. I'll first talk about Markprint. See, we acquired Markprint on the 4th of July, and then we're consolidating only from the 5th of July onwards. As of now, we are roughly about approximately EUR 500,000. In the top line revenues from operations. The overall income is about the net profit, what you say is about 11% of the sales for Markprint. When we talk about Innovative Codes, which was our acquisition earlier on. For the nine months, like we are about INR 5.67 crores of revenue, and we've just now broken even and it is a marginal profit towards the end of the day. I mean, we are in positive in net profit now. Right. What is the likelihood of their contribution? I mean, is the growth which we can, these companies can project going ahead? What steps are we taking to improve the profitability? First of all, their reach is a revenue profile, and thereby the profitability also. What are the steps that are in the annual? Are any further investments we are contemplating, sir? I can say actually, so regarding ICIPL, you know, the fact is that, you know, we had some supply chain issues. Now they are sort of like more of an economy type of a brand or whatever you wanna call it, right, of ours. You know, not economy type, but like the subsidy we slightly focus on the slightly more cost-conscious part of the market, as compared to the gold pin. Now, what happened was, you know, we had a shortage of printers. Actually what, you know, some of the components we use now come from the printers we supply to them. Actually our own supplies, situation with them over the last 12 to 18 months has actually been very poor. If asked, we've had issues and, you know, I even did mention on the previous call that in fact we've actually lost some orders in the last 12 odd months because we've not been had the supplies. We've had to sacrifice some of the, you know, the C and D category type customers, you know, in some cases. The situation has been a bit worse with them because we've not been able to supply them properly. Now that our supply chain is coming back to normal, hopefully we get a better result out of them in the coming year because our supply to them will also improve. You know, it's also slightly, they have taken some more time to understand the printer. Anyway it's because our people have been working on this printer for generations. Even when it changes from one generation to the next, you know, we have issues and we have to do a lot of training, but at least there's a base of familiarity. For them, it's totally new. You know, that could have also been a contributing factor. The supply chain was the biggest issue in the performance of ICIPL, or I really do believe they would have done, you know, significantly more business. I hope that now if there are no supply chain issues from our side, we will see a better performance from them going forward. Regarding Markprint, of course, we might want to invest some more money in them. That's partly also because we want them to be able to handle some more things for keeping able to support us. At the same time, you know, I need them to grow also. You know, the money we've invested, we expect them to provide a return on that also besides what we expect to benefit in terms of our own synergies. What's happened is, if you didn't hear earlier, we've been busy executing their orders because they have to build before December 31st because their customers require that. Some of the expected projects we were working on together ended up going slow, and hopefully by March we'll actually see some of the initial results of those projects. You know, another 12- 15 months, we'll actually like make those products. We fine-tune those products, so they're extremely reliable and you know, they are market competitive, if not market leading. Then they can at that point of time start getting significant revenue for us. A small point in continuation to it. When we invested in the company, was it through new equity issuance or did we acquire the stake from the existing promoter? I mean, how much money was invested in the company to grow the business and how much was paid to the promoter, the existing promoter there? Yeah. I think in the disclosure it was, it was clear that we spent EUR 1.5 million to buy out one non-working partner and a part of the working partner. We bought 75% of the company that has been as a buyout of the existing shareholders. 25% of the company is with the current managing director of the company. None of that payment has gone to grow the business. It has been towards to the promoters to acquire the controlling stake. Yes. Okay. As you mentioned now, sir, you mentioned that you would be growing the business with the money you have paid to them. I could not understand this or I mean, I could not understand this or I could not understand what you are trying to convey there, sir? I said that we obviously invested with the reason to acquire the technology and use it for our own markets. At the same time, we believe that they also can go and capture their own markets and grow. Both companies can grow. We can benefit because we can help supply some products or we can use it for certain parts of the top end of our market premium segment. They can also grow because obviously they are growing and that's why we invested in them. They have, you know, they have their own requirements in Europe also. The situation was that because, as you said, we have invested the majority of the money or the entire set of money to buy some existing stake, we do feel that there is a need to look at investing some minor amount of money in the business. This is also, like I said, partly because we want that our own development to not slow down so that we have extra capacity so that we can support our own European requirements, but also we can support Control Print for its requirements for India. We don't take things from them as is. We want some changes to the products, otherwise we feel that it'll be too expensive for us. We're starting, yes, on the expensive side, but that's a very small market. We need to make some changes and work together to optimize those products. Even the performance and the ruggedness for India needs to be at a different... There are some changes need from them, which cost money and takes development effort, resources and time. Because we want it for ourselves, for Control Print, you know, we are looking at, you know, increasing a little bit of money, but it's to the company, not to buy out any promoters or anyone else, to expand the resources of marketing. Going ahead, when will we see the product in production of this acquisition called Netherlands? When can we look? What is our plan so that we will be introducing their product at the right price to the customers in India? What are we looking at? Some products, like I said, by March of this year, they will not be optimized to that level that we want, but they will work. You know, it's a continuous process always with us. You know, it's never a one-time thing. You get the product, you have to put in the market. There are customers who will complain about many things. You will go back and you will change, and you will get closer to what the customers want, you know, and you will change. At the same time you'll also work on, suppose we make a higher volume of this product, how do we get that cost down, you know, so that we can enter the market further and, you know, sort of create a cycle of, economies of scale. This is something that I personally believe normally takes, you know, 12-15 months after the first product is launched at a minimum. I expect that if the product launch is successful, you know, or if the product is, you know, has a market, it will take us another 12-15 months from March, up to 18 months maybe before... Right, sir. A small point, which industry are we first will be introducing the product, getting to which industry? It is one maybe pharmaceutical. Mainly pharmaceutical and also some industrial customer of ours who require it for, some, branding purposes. Right, sir. Wh at have been our utilization levels for the consumables and inks currently? I have no idea, but we can definitely... There's no stress. You know, we can make more. Didn't get you, sir. Come again? The issue has been more right now, you know, supply-related issues. Uh. regarding consumables production. Where, you know, we had some shortages of certain resins and dyes and stuff. We couldn't make production there. I think that things streamline. There's no shortage of capacity. I think we can always work like, you know, more hours if we have to. I think it should be okay right now. You are explaining that. CapEx required at least. Sorry, sir, I interrupted you. Last line to what you said. No, I said just no CapEx required, if that's what you meant. Okay, sir. You are trying to explain that whatever the headwinds we were facing earlier because of the supply chain issues, those are now back to normal. as and when the demand in the normal course of business when the demand picks up, we would be in a position to easily capture the market without any worries. Is this the better understanding? Correct understanding, sir? No. I think there are supply chain related issues. They are less than before. I never said there were no supply chain issues. Okay. Okay. Okay, Okay. Okay, sir. What steps are we taking? I said that. Like we are paying money, buying from the spot market where we have shortages or, you know, we are trying to look at alternative suppliers or, you know, who are similar, the same product in the real world. Normally we don't have exact copies of the same product, it's a problem. We have similar products and so on. In terms of the fact that yes we can increase our revenues without incurring CapEx, that's not an issue. The supply chain issue is a different issue. It's improving. I'll say the situation is improving. You know, before we had 50 parts which we brought out of 1,000, maybe now it's 15 or 20. It's shortages, you know. We did one software re-engineering to change one critical part. It was so difficult that, you know, I don't think there's any appetite to do it again. Those sort of things, I think we would pay more money. It's better for us to just pay more money. Right, sir. Just to keep up the service with the customers, that airlines are not disturbed. Yeah. What happens is if you change one thing, you have to do so much testing, development, and then you have two lines of, you know, components for the same product, and your economies of scale splits. You know, there's a lot of other issues that happen. It's not easy for us to accommodate any type of change in one generation of printer at least. You know, if you look at our printers overall, it seems like we talk 600- 800 printers, but, you know, it's still nothing. You know, if you look at real production, this is not like a real production volume. It's very small volume. Just repeat your last point, sir. Come again? I said even if we ship 600-800 printers a quarter, as I said, it's not a real production volume. It's very small. I mean, look, there are people who are making washing machines or fridges or something. The other ones have, like, real volume, you know. If you look at this is nothing, you know. It's like even if we make 3,000-4,000 printers a year, it's nothing. People are making, like, millions of TVs or phones or, you know. They are the ones with the real volume. We can afford to maybe even have, you know, two lines or re-engineer the entire software or something to accommodate some, you know, shortages and stuff. I think for us it's too difficult to do that. Too difficult. Sir, lastly, sir, returning cash to the investors has definitely applied the board preparing this interim dividend. Just that when we look at the tax incidence part of it, because of the changes brought into the frame, the tax incidence is higher and it is taxed as your investor. I request the board and through you at innovative ways or like should be deploying returning cash to us rather than looking at only the dividend as a payout. My short point was the tax incidence appears to be higher. You are the also the largest shareholder. You can, you are feeling the same pain as the investors are. Yeah. Saket, you definitely, you have raised this point earlier. In fact, maybe some other investors also have, I'm sure. I certainly spoke about it. I did say, in fact, we do have, you know, like, more than INR 50 crore in cash or any cash equivalents or something. You know, I did say that when we go above that level, we will be looking all the excess back to shareholders unless there are some acquisitions that we might make. We are looking of course at all options of growth options for the business. We are looking also at how to return excess cash, you know, if there are no available things. I can't say, you know, this was a poorly result. Obviously in April will be our, I mean, when we come back to you, that'll be our final result. In the meantime, maybe that time or the AGM, you know, time would be maybe we'll come out with a clear course of action, because, you know, we've been quite clear that our business doesn't require much CapEx as of right now. Of course, there's small things here and there, like putting a, you know, few hundred thousand euros extra into Markprint and, you know, maybe a few INR crores here and there. Nothing major. It's more of a technology-based business, and we have to bought technologies with us as of right now. Like I said, the options would be, acquisitions, you know, strategic growth areas, where we can look at beyond acquisitions also like in partnerships or other avenues that closely relate to coding, marking, digital printing, the packaging industry. We had announced of V-Shapes, joint venture. I guess you can, I think we disclose that sometime or the other. We can. Sometime maybe. Yeah. Yeah. We've of course, like, we were very clear that we will return the excess cash. You know, of course the method of the return, you know, is not my decision. You know, it's the board decision. I mean, I, yeah, you are correct that I am paying 14% something tax and you know, it's not my decision of how the excess, you know, cash would be returned to the shareholders. It will be returned, you know, the method I can't say. As of right now, you know, buybacks and dividends are if there are any other, you know, item methods, we would Yes, sir. Buyback would be at the time of coming with buyback, the tax incidence would be on the company and whoever participates won't be paying any capital gains. That would be a slightly prudent way, but the tax incidence would be then falling on the company, which is currently when we are paying dividend that is on your recipient, on your shareholders. That will change going there. That would again be a cost on the company as today the tax incidence is on your investors. If we continue to maintain, you know, I can only say this much, if we continue to maintain a cash balance well in excess of INR 50 crores, which is the case right now. If that is the case at the time of either our annual meeting or our AGM, depending on what the board decides, we will, you know, get back to the shareholders with further details on how they plan to reward shareholders or how they choose to with the excess cash which cannot be used profitably by the company. I can't say more than that. Sir, any update on the Liberty Chemicals and the Videojet part, sir? I'm sorry to interrupt, sir. I would request you to please- Yes, ma'am. I have got my subsequent. Thank you for. Thank you so much. Yeah, yeah. Thank you, ma'am. We have the next question from the line of Jayesh Gandhi. Before we move ahead, ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants on the conference. Please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We have the next question from the line of Jayesh Gandhi from Harshad Gandhi. Please go ahead. Sir, I have actually only one question. How many years are still left till we enjoy the tax advantage in Guwahati operations? Hello? Hello. I have no idea. Yeah. Another five years to go. Okay. We go straight back to 25% of tax or I mean, is it going to be a gradual or how it will be? We will get back to you on this. Oh, okay. I believe we will have available though if it doesn't lapse by. Technically we are at a 0% tax right now, right? Technically we would have a MAT credit available. I think, again, that's a fair point. We'll revert back to you if that. I think this question has been raised in the past. I believe we have a MAT credit, although we don't show it in our accounts. you know, but we do have a MAT credit available to us which we can use in the future against taxes. We can maybe maintain at the MAT rate for even post the next five years. Even post five years. Got it. Basically at least for next five years we hover around somewhere between 17%-20%. Is it? Yeah, yeah. Okay. That's all from my side, ji. Best of luck for future. Thank you. We have the next question from the line of Alisha Mahawala from Envision Capital. Please go ahead. Thank you for the understand the INR 400 crore that. Are we planning to do any more? Sorry to interrupt. Miss Mahawala, your voice is breaking. I would request you to kindly come in the network area, please. Am I audible? Yes. Please proceed. Yeah. I just wanted to know for the INR 400 crore revenue aspiration that the board has set out, are we planning to do any more inorganic acquisitions? The board has set out an INR 400 crore standalone revenue target. Definitely we would be looking also at inorganic acquisitions, but that would not hopefully, you know, be part of this. I think whatever ICIC or Mark or anyone else gone through, which is not part of this target, you know. This is we put up a standalone target amounts. Sure. Historically on standalone of this business used to a mid-to-high teen kind of growth, and it is an oligopoly market. I think gaining market share is also not really easy and up for grabs. What is inherently changing for our business? Is it some particular sectors doing well or being branched out into wide spaces that we were not addressing earlier, to aspire for growth which it's been a while since that business has seen? This specific thing is actually growth that happened maybe in the last two- three years, but didn't show up because, you know, even though people bought printers and there was a growth, people are not using the printers to the full capacity because, you know, the demand for the Our customer's customer, because like in the end, like I said, you know, our customer's customer might be lacking. A lot of our customers were not producing at that capacity. Now they're just using the machines more. That's why we got more business specifically this quarter, maybe to some extent in the first two quarters also. It's not anything extra special from the market. It's just, you know, our customers producing more. Hopefully one of the things that will help us is, which we discussed earlier, there were some cost increases, and we are hopeful that we'll be able to push through a price increase, which is facing raw materials resistance, and that will help our revenues in the, you know, coming financial year. Besides that, the non-CIJ market and the automation requirements of customers has increased. There are other things like packaging, there are things like, you know, coding on the outside cartons, warehouse management aspects. You know, people are looking at other areas also, and these are also contributing to growth. Yeah. I think there are factors which are increasing the amount of coding required. Like even right now something happened where the government made it like to print per gram or per 100 ml. I don't know what or something like that was there. Where if you have a pack of biscuits of 80 g, you have to print price per gram also. You know, for us like suddenly there was a lot of requirements we were running around because we had to, you know, do this or price per 100 ml or price per 100 g or something, not just the price. It just creates like an additional demand. You know, in a lot of cases, sometimes it can also cause a lot of operational problems because, you know, then it like it means a lot of extra work. I think, fundamentally, you know, there has been some market share gains for us. Part of the bounce back that has happened because people are just using the printers less and they're just getting back to normal usage. I wouldn't even say it's normal usage. I would say like it's still slightly less than optimal, but it's coming back there. Is there a particular sector that is really firing for us? I know you know, has the sector of client concentration skewed in a different direction which is leading to this growth? I think before we were like a single jet engine where we were very industrial oriented. Now I think the packaging sector, which would be, you know, food, which would include of course normally like food will include all the sectors like dairy and beverage and dairy and bakery and so on and so forth. Food, beverage, you know, FMCG customer segment is always a stronghold of ours and pharmaceutical. I think we're doing well in the packaging sector. We have increased our overall percentage of revenue from the packaging sector as a whole, and we continue to maintain our industrial sales and our market share there. I think I might be a little bit more broad-based in some sectors where we were quite weak, frankly. You know, like you said, given the number four in, in the packaging sector in the quarter, but we are in a significantly better position than what we were before. I think that's helped stabilize our revenue and the growth. Shiva, just one last question? You know, in the previous call also you had mentioned that there is some high cost inventory that will take some time to get removed out of the system, and we are seeing some of that. When do we think that margins will stabilize and some of these supply side issues which have hit us, will be, you know, we would have crossed it last time? Jaideep, I think maybe you should answer this. You're mentioning about the supply chain issues, right? Yes, yes. See overall, if you look at our cost of production, you know, like, we are at a steady 44 to 4%, 40% to 44% cost of production and all, which includes manufacture overheads. There is some room for improvement definitely for us. At the moment we are really cut short, because, you know, like, of this, short supply of semiconductors and chips and, the margins are really still on a marginal basis because we are buying mostly from the stock markets because our regular vendors, you know, like they are having steep lead times, about 26 weeks or 52 weeks. We are having a high level strategy to, you know, buy this so that we don't run out of stock and make sure that, you know, the place would have proper inventory to produce. Do we believe that the 60% gross margin and 25% EBITDA margin is sustainable? Yes, I believe. In fact, we can definitely improve on that. I mean, if we increase our operations, there obviously will be economies of scale attached to it. I mean, if things are settled down in let's say three- six months time, we would imagine improvement in our EBITDA levels as well. Okay, great. Thank you. Thank you. We have the next question from the line of Sunil Shah from Khambatta. Please go ahead. Yeah. Thank you, Shiv. Thank you, Jaideep. I've just one question to ask, and this is about when we say that our installed base is 16,500 printers, those are active printers which give us revenue in one form or another, like consumables, air, service. Is that the case or it has been a journey so far? How, how is it? Hello? Yes, I think if it's just 16,500 printers mentioned then these are direct printers because I think we have sold more than that. What's the life of this printer? Meaning when we say we have sold 800 printers in this quarter, how much would be like repeat customers and how much would be new customers? I just want to understand how are we expanding our market reach. Is it new customers or is it existing customers? How is it out of those 800 sold in the quarter? Yeah. No, the majority of sales are always repeat businesses, you know, because even a new customer, right? Whatever orders you give to me for 3 months, that's what comes in new. Even if you... Most customers, what they'll do is they'll buy, you know, two, three printers from us, even if it's a big company, and they'll check it, and once they're comfortable then we'll go a bit away. The turnover is repeat customers on our books. Like so obviously they are- Sir, I'm sorry to interrupt, sir. Can you please repeat your last line as we were not able to hear? Yeah. No, I'm sorry. I said we have been penetrating new segments, you know, as I mentioned. That's a better indication of probably, you know, that we are successful in creating, you know, fresh avenues of growth, you know, fresh, you know, sources of revenue within the industry for ourselves. I think the industrial segment, like I said, was always strong. I think what's changed for us as a strategy in the last two-three years is that we've added a second engine of growth in the packaging sector. Of course the packaging sector is slightly more scalable than the, you know, industrial sector. That's also been, you know, have a second source of growth, but it's also like a stabilizing influence. Sir, just to understand this better, in terms of what I was asking. Sir, 16,500 printers are installed and 800 have got sold only in this quarter. In that sense, I would believe that I'm expanding my market reach by 5% in this quarter. If 16,000 is my base, and if I'm sold 800 more, which is expanding it by 5%. However, that is not the case, because as you stated, 800 is large number of repeat customers. If the repeat customers are like, let's say 640 out of 800, which means I'm expanding my market by only 1% in the quarter. Is that the case? That's what I want to understand. I don't understand what you mean by expanding my market. We look at the number of unique customers we have, and we look at it by the number of active printers that we have. If we sold 800 printers, as you said, that would be an additional 5% of the existing base will be installed. That would increase. Of course, there will be also some of those 16,500 printers which, you know, would become like old and not be used anymore, or some of those customers might go bankrupt or might shut that specific factory's operations. Some printers also go out of the base. You know, the printer has a life between eight-12 years, and, you know, that's a fair judgment that people can take. You know, so a printer sold, can, you know, in general will be eight-12 years of life unless the factory is not in operation anymore or that line is not being used anymore or nothing untoward happens. For us, yeah, the 800 printers would be an additional 5% increase in the base. Like I said, it will also be balanced with the fact that some printers would also have become old and fall into disuse in this period. In terms of the number of unique customers that we address, yes, that's a separate question, that I don't think we've disclosed that information as yet. That we would measure our reach in terms of number of unique customers that we address compared to before. I don't know if we've disclosed that as yet, so I can't give you that specific information right now. Yeah. No. We've disclosed this information in the past. We were able to disclose the number of unique customers that we service in the past. I think we actually have it in our company profile presentation. I don't think we include it in our investor presentation anywhere. I don't know if. Huh? We can do the information. Just Shiva to add on to what you just now said, see, we do not even consider all these base printers or printers which we give it on demo basis or, you know, on a standalone testing purposes. The 814 is not 5% of that. That's what is the answer. We have. No. I think that that's what exactly I was saying. 16,500 is the active base. 800 and whatever is the additional base which would add to the 16,500. Of course, some of that 16,500 in the next three months would also not be used and that would be reduced. It's not every printer sold is gonna be used, but some printers also fall into disuse. That's how you have to calculate our active install base and our market reach. Yeah. Yeah. Just to simply put, 16,500 printers have been sold. 800 we sold in the quarter. We consider that the next quarter to be 17,300 odd printers sold from our side. Out of that we wouldn't know how many are active, et cetera. Is that right? No, no. There's one bit of correction, if you ask me. 16,500 plus is the active install base. Here we are clearly ignoring, you know, like, anything which is on demo or testing purposes. Even if we sell, let's say 17,700 more, I won't add it automatically to the 16,500 because that's a ever evolving population of printers. Some of them might be returned, some of them might be, you know, converted, some of them might be dead. As of December, we've got about 16,500 plus active install base. If I may explain to you more carefully. Anyone who doesn't do business with us in six months, any printer that has not been done business with us in six months is considered as a dead printer. It goes off our installed base. Oh, great. Great. Is that a, that an answer for you? Yeah. Yeah. That's a perfect answer. If it's not done something in 6 months, it does not mean it's part of the 16,500. Right. Sir, again, I'm just repeating. Yeah. I'm just repeating what I have understood. 16,500 installed base is giving me revenue in one form or another in a six-month basis. To that I'm adding around 800 odd printers in the quarter. That again will perhaps give me more revenue going forward. Yeah. That's what I'm getting at. It would be sensible if I understand it correctly what you said. Some of them will also not be used. I don't know in this active investor presentation if we update it every quarter, every six months. That is a thing that I will or will have to get back to you on that. Yeah. Probably every year and maybe we can update it much better. Yes. Yes. Yes. It's like an automatic thing that happens through our STP. It's calculated. Yeah. We also have a target of every customer that hasn't bought. Of course we get in touch with every customer who hasn't purchased for one month or two months, you know, depending on their cycle. All of these things are already programmed in. If someone has not purchased for six months, we can consider it as a not active printer for the case for us. Then, it would not come in this list of 15.5 certainly. Fine, sir. Thank you. Thank you so much for the time and the answer. Thanks, sir. Thank you. We have the next question from the line of Ashok Shah from LFC Securities. Please go ahead. Thanks for taking my question. Sir, as I understand, we have a property card for the Liberty Chemicals land. Still encroachment is not getting vacated or what's the problem? Can you just enlighten the situation? Ashok ji. Yeah. The thing is, from my understanding, there's no basic change in the Liberty Chemicals Chandivali situation, you know. You know, Mr. Kavra is directly handling that matter, so you will have to speak to him directly on this call. My knowledge is that there is no major change in any direction. The encroachment is vacated or still not clear? Matter is not clear. The incursion is not clear. If it was clear, we would have sold the land by now. You'll have to speak to Mr. Kabra ji on, you know, where the encroachment status is. Okay. regarding this project case, is there any further feedback? Actually the case is exactly where it is because since COVID happened, there's been no court hearings, you know, so just stagnant right now. Okay, sir. Sir, second question is regarding dividend. We are generally paying two dividend in a year. As I understand from the shareholding pattern, we have around I NR 3 lakh share which are in physical mode. These are going out of the scheme or out of the many of the dividend may not have been encashed. Finally this money is going to the government or IEF. Is it better or it's better to take one buyback every year, a small buyback, due to that, this money doesn't go to the government and the money is distributed to directly to shareholder who are actually a shareholder and not part of the IEF fund. Ashok ji, we discussed the buyback and shareholder and dividend issue, you know. In fact, [Raghunandan] earlier had raised this question. I think I have covered that. I said that, you know, maybe if there is more than INR 50 crores in cash still in three months from now or when the AGM is happening, the board will, you know, take a decision. That is- I don't know what the board will decide. The board has said that they will return any cash more than INR 50 crores if there is no acquisition or nothing happens to the shareholders. You know, I don't know whether they'll take that decision in the next quarter or the quarter after that. You know, the board can only decide whether it's a buyback, whether it's a dividend, whether we have some other policy that we do. You know, this is not in my scope to answer you. That is okay. Can you just guide me, out of the INR 3 lakh share, which are, in a physical format, how many dividend is encashed for the share or some dividend is not getting encashed? No, I don't know. I know that good money goes into IEF every year. You know, a very quick money reward please. What's the quantity of the shares, which are not getting encashed dividend? No, I think I'll revert back to you on this. Every year we do deposit back into the IEF fund here, that's for sure. If you are going to stay for some time on the call, we'll get back to you with the samples. How many number of shares are vanished or shareholder are not encashing the dividend? That is my question. Yeah. Okay. Ashok ji, he's asking, I want to find out. Yeah. Maybe by the end of the call we'll give him an answer. Yeah. Thank you, sir. Thank you. Thank you. We have the next question from the line of Devanshu Sampat from Yes Securities. Please go ahead. Yeah, hello, good evening, sir. I hope I'm audible. Please proceed. Yeah, Devanshu. Go ahead. Hello. Yes. Yes. Okay, two questions. One is on inventory on books. What does it stand at currently? So- I think it's about the same as the three quarter or two, half year for this. About approximately. You can also hold on. Hold on. INR 67 crores. INR 67 crores. Okay. How much of this is because of the overstocking that we may be doing to meet the client demand or this is normal? Actually, overstocking, we are going by proven method of management, sir. In order to tide out the crisis because of the shortages of semiconductors and the chips in the market, we are actually having a strategy to build up some stock so that we do not run out of the required raw materials for the production. It's not a deliberate case of, you know, overstocking, but we are actually reacting. More of a reactionary measure and being very risk averse and conscious of the fact. Got it. Got it. Sir, second question I wanted to ask, is, about, how much of revenue do you think we would have lost this quarter because of the supply chain issues? I don't know how much we've lost specifically this quarter. Yes, it has been a bit continuous. I would say like in this here at least, you know, maybe a couple of percent would have been at least more, but they won't supply at least 2%, 3% more. We could have easily crossed the INR 80 crore mark, right, basically in this quarter, had it not been for these issues. No, I'm saying over the year, over the year. This quarter we did 74 some. How much were you judging exactly there? 70. 74 I think. Yeah. 50%. I think in this quarter, they weren't too affected us less than the first two quarters. I can't tell you on a quarter-to-quarter basis. On an annual basis, I think we could have done 3%, 2%-3% more if it didn't happen. This quarter we got some, you know, some of the stuff we had previously, you know, luckily, whatever, we were able to manage. In the first two quarters it probably affected us more, even in the. Okay. No, thank you. Thank you. I'm wishing you all the very best. Thank you. Thank you. We have the next follow-up question on the line of from Kapoor & Company. Please go ahead. Yeah. Sorry, sir, I just got disconnected after. You were speaking about the VAT credit part. If you could elaborate, what were you trying to explain? We just said after that we, you know, our 0% tax for Guwahati lasts for five more years. For five more years, unless the government changes its policy, we should be under the MeitY umbrella. At the end of five years, we will have a sizable max credit, which you can offset against future taxes. We should hopefully be able to remain in the MeitY umbrella for even some period post five years. If, you know, this is not like something we have to obviously go through the auditor to give you a confirmed statement. You could just take it as a, you know, a guess, a best idea of the situation. I cannot say this with a 100% confidence till we check with the auditor. Thanks, Shiv. Jaideep, sir, do you have this advance tax number as on 15th December? What has been our tax outgo, actual cash outgo we have paid? The advance tax number, yes, we have. It should be about, the indirect tax is something separate, but, yeah, it's about INR 8 crores. INR 8 crores we have paid? Yes. As on 15th December. No, 31st December. Okay. No, sir. Advances generally are paid before 15. Yeah. I'm talking about the indirect taxes which we have. INR 8 crore is this. There's nothing as receivable and payable as of now. We've paid everything. Correct. Correct, sir. Right. Lastly, sir, on this JV part you were also explaining the last one in the month of December. How is this going to benefit the company, the latest one, this V-Shapes S.r.l. part. What are we trying through it? Yeah. V-Shapes is a company that makes some innovative unit dose packaging solutions, like around, basically like a sort of high quality type of sachet replacement. Also like, you know, especially appealing part for us is that the solution is not only innovative, but it's, you know, it's fully recyclable solution, and there's also compostable option. It was a tie-up where, you know, we felt that with our expertise and our reach in the packaging industry, we could tie up with them and take advantage of it and also combine some digital printing solutions of ours, to service certain customer needs out there. Yeah, that's all. They will be. It's still the very early days. We just try to say that, you know, we are looking at other growth avenues and options also, which are related to our industry. Definitely I do believe in fact we might be one to press releases out on that matter. If we can try to put it out in the next quarter's presentation. We can put out an additional note on that if there's a amount to that. How much we have invested, sir, as of now? We've made a provision for a INR 10 crore joint venture. Maybe past, I mean, a few towards that. Right now what's happening is we've incorporating our subsidiary and then V-Shapes will then take equity in that subsidiary because most, so yeah, you are right. I think it's better to name this exactly. Yeah. Hello. Yes, sir. Please explain. Please continue. Are you talking about the V-Shapes thing? Yes. Please explain the V-Shapes transaction, sir. Well, the V-Shapes, we've just signed the JV agreement. The company incorporation is yet to take place. Overall, we stand committed to, you know, like as of now we would be investing about INR 10 crores in the initial franchise. 90% of the shareholding would be part, would be our capital, which is a Control Print Limited capital, and then assisted by the overseas investor. As of now, it's not yet, you know, like crystallized about the exact nature and when and when we are doing it. Overall, as per the JV agreement, this is the overall thing. INR 10 crores in the initial phase and INR 5 crores later on, by virtue of our preferential capital, or by equity we will do it. It's 10 + 5. How is this INR 10 crore going to be accretive to us? What is the business plan for it? Hello? Yeah, I just took the last line, sir. Sir, how is this INR 10 crore going to be accretive for us? What is the business plan? This is a large sum of money that we are contemplating to invest. The business plan is that we are going to do a supply of their machinery in India. We are looking at that option. We also might look at the option of contract filling to be done over here. The machines are of a unique specialty. I mean, in India, they've got some sort of a foothold, but not widely. They have also expanded over here. We believe, you know, like, we'll be the first players in the Indian market for such kind of machines. Yeah. As of now, the business plan, the full blown business plan is being developed. We've just signed a JV agreement, and once it is finalized, we will, you know, like, get to the board, we'll get it approved, and then the incorporation of the company will happen. Right, sir. What Shiva sir has just explained, sir, I think so much needs to be explained rather than only the statutory disclosure that we have done for the 10 crore part. I think so Shiva sir, please look into it that the further definition of information is provided for the size of the company which we are, 10 crore INR investment for this packaging business and the potential which Jaideep sir is just articulating to, is not very well explained to the investing community. Just a two-pager submission as per the disclosure about this volume. Would request to develop, as you approached Siva sir, with a further press release or with the information of what exactly are we contemplating to do with V-Shapes going ahead. I'm sorry to interrupt, sir. Ma'am, I've concluded. We have. Yes. We are trying to connect Mr. Shiva Kabra. Okay, sorry. As his line has got disconnected. Please stay connected while I try to reconnect. CFO sir, do you want to take this question? No, I have the business potential and the type of machines where I would let Mr. Shiva Kabra handle it. Sir, kindly stay connected while I try to reconnect. I might, you know, just whatever information I know, I might try to explain that. You know, we are able to, you know, like supply V-Shapes machines into the Indian market. We can also look into, you know, like contract filling, like they have got unique machinery for, you know, like filling up food, cosmetics, some medical chemicals into sachets or pouches. That's all what I can tell you as of now. Regarding the exact business plan, we have not yet fully developed it. Once we develop it, we'll take it to our board of directors, and then we'll take the report, incorporation of the company will happen. In case, sir, if you want to know more details, then we might as well wait for Mr. Shiva Kabra to join this line, and he will be able to answer. I will wait, ma'am. Please connect. Thank you. Sir, kindly stay connected while we try to reconnect Mr. Shiva's line. Please. Give me a moment, sir. Ladies and gentlemen, the line of the management has been connected. Shiva sir, please proceed. Yeah, I'm here. We got disconnected. Sir, we have one more participant. Can we take him? Absolutely. Okay. We have the next question from the line of Harsh Bedia and Professional Investor. Please go ahead. Hello. Thanks for the opportunity. Am I audible? Yes, you are. Yeah. Yeah. perfect. I recently saw that Control Print has been participating in conventions in Africa, and that's a very good thing to see. Can you talk more about it, about the expansion plans in the African market? Harsh, right now it was just a exploratory thing. We were looking at actively about two and half, three years ago. Post the COVID part, you know, we were pretty focused on this. As I described in, you know, some previous communications, and we've had some supply chain related issues. You know, it would not make sense to take on commitments that we can't meet, you know, ready for our own markets and our own current requirements. I think it will be something we're exploring and as soon as we take some definitive steps, we will keep you posted. Perfect. Thanks for that clarification. My next question is on our margins. I think in the last quarter itself, you guys had mentioned that it takes three to four quarters to pass on price increase to our customers. And most of the price increase were just like in July, August quarter of 2023. Are we still in line with that? The broader question is whether our gross margin staying below 60%, which is after a long time. I'm thinking if this is the bottom of our gross margins. I just wanna say one thing to everyone. you know, I would request that all margins only, you know, calculate on a standalone basis, not on a consolidated basis. You know, for our subsidiaries, as of right now, there's no requirement for profitability. You know, it's growth that we want for it from them. Not, you know, there's enough scope to make margins later as the revenues expand. for our own gross margins, I think, Jaideep has addressed this question of, you know, the type of category especially, where we've seen, you know, we've got, definitely some increases that we faced because of, you know, short supplies in our markets, and we had to purchase, you know, several things from the spot market. It was not that it was not only the electronics and chemical that was very obviously saw the maximum impact. Also in certain things from chemicals, certain specialties, you know, that we use also in our fluids. Overall, we saw that there was a cost increase. Also we've seen beyond spot purchases, there has been a actual pricing increase in the price of semiconductors and electronics in general across the board. We did finally say that we are in the process of increasing the prices. We've started. Some customers accepted, some will still have to accept it, we are in that process. It's well underway. Hopefully that should at least cover all the cost increases that we have faced, you know, genuine cost increases. I would say that beyond just the cost of, you know, the export purchases, there has also been a bit of a depreciation of the rupee, I think, you know, against the dollar. That had some impact maybe in the last quarter, because a lot of the things that come from some countries is also priced in dollars or benchmarked with dollar. Yeah. Makes sense. Thanks for that clarification. Lastly, I think when your line dropped off, you were explaining about your venture investments in V-Shapes. Maybe you can comment more on it because the line dropped in the meanwhile while you were answering Saket's question. Like I said, it's a unique thing. Obviously being in the packaging industry, you know, we have a close link with the packaging machinery business and packaging materials business. Although we are not actually supplying packaging machines and materials, we are more on the painting aspect of the coating and marking business. We felt that there was something unique. Like I said, especially for us, what was interesting was not only that it was a unique format, which had value addition on a, you know, an innovative space, but also some of the solutions that are offered are recyclable and some of the solutions offered are compostable. That's something we felt was also a market demand that was there. Essentially that's... We felt that there is a scope for something innovative, you know, it's something that we should explore, and it's also an area where we could be strong. Okay. Thanks for the clarification. That's it from my side. Thank you. I just do wanna say, you know, to people, because, you know, one of the previous participants did ask more details regarding the business plan. You know, we would rather take high risk opportunities, but which are around the sort of technology core, which is defendable and it's not a commoditized business. I think I've explained this in the past, and I will repeat that again. If we invest in a business, it's gonna be something that we feel that there is some proprietary technology or there is, you know, a technology barrier, and it is gonna be at best an oligopoly or a monopoly. It's not gonna be something where anyone can enter into that market. Of course, when you go for a technology-based solution, you know, there is always a much higher risk. I, you know, I don't wanna be clear to everyone, so this is a judgment call. We are going with the business plan, but, you know, the risk is high. Thank you. A request to all the participants to limit their question to one per participant. Thank you. We have the next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yes, sir. I got the answer to this question about this V-Shapes investment which we are doing currently. Only as investors we wanted to understand the potential of what exactly V-Shapes brings on board for Control Print going ahead. Since 10 crore INR investment for a complete of our size is a sizable investment. As you articulated just to the previous question, Harshvai, that it's a high risk opportunity that we are taking. Going ahead, just a fair understanding of what are we seeing and how is Control Print going to gel with V-Shapes' going ahead? What kind of exclusivity or if even elaborate understanding or a press release would have followed post your your JV going ahead? That would have sufficed lot of intention and invested party interest. That was the only understanding. We are unable to visualize what are we trying to risk in V-Shapes going ahead. That was my broader question. I think, you know, like you said, Saket, the things what we have put out of, I think, the previous statement, I will put that. I think we've made all the statutory disclosures with regards to our joint venture with V-Shapes. Again, we're still in the process of doing some other legal proceedings to incorporate a subsidiary and a wholly owned subsidiary. We have to incorporate, get some FEMA, some sort of permission so that V-Shapes can enter and so on and so forth. There's a technical aspect to it which Eddie can answer you. You know, as a business, fundamentally as a business, you know, everyone knows we are in the coding and marking business, coding, marking, and digital printing. The packaging machinery and the packaging materials business is a much bigger business. It is serviced mainly by people like UFlex, Cosmo and so on, Polyplex. Of course on the machinery side, people like Hassia or Nichrome or Bosch, people like them. A lot of them are unique solutions. Some of them are innovative solutions. We are not interested in anything which is commoditized. If we feel that there is, you know, some opportunity where we could service the market, especially, you know, if it could be something that's environmentally friendly, sustainable, that's something that our board would also, you know, encourage us to look at. If we feel we could find the right types of innovative solutions in that space, which we believe could be a, you know, a sustainable long-term business, we can look at. India also of course we have a lot of talk with consultants about technologies and solutions, but maybe the willingness to pay actually a premium might not be that high. It's a risk always, but it's worth exploring. Of course, you know, I can only say this much. If we enter into a tie-up with any, company, it's obviously on a exclusive long-term basis. You know, obviously our lawyers and stuff are paid. I hope that they've done a good job to make sure that, you know, the business is, you know, clearly demarcated and, you know, which will be beneficial for both sides. Yeah. Like I said, we're not afraid of investing. If it's something aligned to our business, if it's something that we feel we can go to the same sets of customers, and we feel that the risk reward opportunity is positive. Like I said, you know, it is going to be risky. There's always gonna be risk in any type of new venture. Only short point was that when we are zeroing the INR 10 crore investment, we have definitely looked at the business opportunity, the size which we are going to cater going ahead. What I could Google out is V-Shapes is an Italy-based organization in the single dose packaging product type. We must have worked before committing an investment of INR 10 crore, we must have worked out the business opportunity. As you mentioned that the disclosure which we have done to the exchanges only speak of a small speak of a number and our contribution to in the stake which we are going to earn. Nothing more than that what the investment is toward. That was my reason why I'm asking again and again of just understanding where are we going to spend this money and how, what kind of business opportunity of a company of a top line of INR 200, INR 250 or INR 300 crores going to garner going ahead from the segment. That was all my point was that. Part of that money is to invest in working capital because we're selling this machinery. The materials that go in this machinery are proprietary. You have to buy some of the materials from us that go into this machinery. We need to have those materials and those machineries accessible in India, so we can actually demonstrate those same to the customer. I would say the bulk of the investments would go to working capital. Which will part-time may be in inventory, so that we can show the same. We're also setting up a contract filling facility in another factory, which would be used for specific customer requirements, especially in the initial phase where the product needs to be proved in the market. What we're expecting is, are we getting the feedback that a lot of customers want to print, initial kinds of quantities or rather fill-With us? you know, it's a try before you buy type of situation as of right now. This business will be housed at Nalagarh. I mean, the air business will be routed through the Indian domestic operations only. They will be bringing the technology domestically for us. Yes. We already have some existing customers in India, and they'll be merging that customer base into our JV once we start. Everything will be routed in through Nalagarh, at least for the machinery business. The materials is something that, of course, we don't manufacture ourselves, so we'll be sourcing it. It's a proprietary material, though, and we will have, you know, customers have to purchase that proprietary material from us, at least for the Indian market. Which customer, which segment are we catering to initially, sir? Where we are already merging the customer? Which, to which category we will showcase this D-shape products? The easiest market is the pharmaceutical market because the willingness to pay is the highest, and that's the highest price of the, of end product at least. The other two target markets would be, you know, some expensive cosmetics. The third market would be, certain types of foods which are reasonably high value. You know, could be jams, could be chocolate. When will this conclusion happen? I I think, it will terminate when, sir? When will the money will be drawn? The process is already underway. We've already imported some machinery. We've already started working on it. But there are some legal things that are going on in the background. You know, like I said, the joint venture is being incorporated. There are some key Indian directors and certain shareholders and, you know, now all of those things have happened. Now there's an application for getting a foreign investment in, and so this is... I don't know exactly how long it will take them. Jaideep, do you want to answer this? Yeah. Yeah. Of course. The first thing would be that, you know, like, we'll gather all the information for the incorporation of the company. As you will be aware, we'll follow all the basic steps of, you know, name approval and get the MOA and AOA passed on. It will take about 1 month or so for the company to be incorporated in India and then we will, you know, go ahead with the rest of the procedure. My guess is that another two, three months of time, I mean, all the legal processes will be done. As of now, say out of the INR 10 crore, how much exact cash have you spent? A ballpark number. No, as of now, the company is not yet incorporated, no? Nothing has been spent as of now. Having a bank account then, it is going to be subscribed and then we are going to deposit the money. As of now, I think whatever investment would have been done as part of our investment. Right. Our masks part of the story, sir, where we are in the mask segment currently? In your initial comment also you have not mentioned. How is the contribution there for the mask segment? The face mask. I missed out on the last thing, sir. On the mask segment, I think you. Mask. Yeah. Yeah. I mean, as you all know, the mask business is basically a business based on, you know, how customers are fearing the COVID, and that's the primary basis of the business. So long as that fear factor remains and there are government mandates to keep the masks on in public places, then there's a steady demand. As of now, because of the latest news about the Chinese versions and, you know, like six or seven different variants which were there in the month of December, we feel that, you know, like, I mean, we... God forbid, nothing happens. There is a slight increase in the, you know, sales of masks at the moment. What was contribution for December quarter? Well, I think, we would be probably feel marginal increase in the, I mean, in business. This year we would seek about, let's say about INR 7 or 4 crore, INR 7 or 8 crore of top line. Of the entire year. Yeah, actual core. The entire asset is depreciated now. Sorry, I'm not able to get you. The entire asset has been depreciated. The depreciation benefits we have accrued completely. Yeah, it's in the process. Thank you. Thank you for all the elaborate discussions. We hope to hear more on our future investments, whether it is V-Shapes, or the Netherlands part, coming up with better, press release, with more insight would be really very helpful. Thank you, Jaideep, Shiva ji, and thanks for conducting elaborate calls. Thank you very much, for the time, and the attention given to investors. Thank you. Yeah. Thank you, Saket Ji. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Karan Bhatelia. Over to you, sir. Thanks, Shiva. Thanks, Jaideep, for a very detailed consult. Any closing remarks that you wanna make? I just think, yeah, thanks to everyone. This was a pretty long call, really happy that, you know, people have taken a lot of detailed looks at all the questions they wanna ask, especially in such a busy period for everyone. Really appreciate it. You know, if there's some things that if for whatever reason, sometimes I feel, you know, these questions come on us and we're not prepared. You know, if they feel that there are some questions that, you know, could be complicated, which are not covered in the investor presentation, you know, if people could email us, then, you know, we could actually, like, get those answers ready and, you know, publish them. We wanna make sure that if there's a question which is relevant to the broader set of investors, then it would come on that investor presentation. You know, that's just my only request, if it's not there, because sometimes, we don't have those numbers exactly in front of us, and we don't want to, you know, provide an incorrect piece of information to this type of a call, you know, because it will be circulated widely. That would not be correct. Thanks everyone for coming and, you know, look forward to seeing you again April sometime. Thank you everybody for the support you've placed in us. We look forward to meeting you in after the Q4. Thanks all. Thank you. Thanks, Karan. Thanks. Thanks. Thanks, everyone. Thank you. On behalf of Asian Markets Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.