Ladies and gentlemen, good day and Welcome to Control Print Limited 4Q FY 2024 investor conference call 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, projections, etc., 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, 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 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, and over to you, sir. Thanks, Zico. Ladies and gentlemen, good afternoon, and Welcome all to the Control Print Limited fourth quarter and FY 2024 earnings conference call hosted by Asian Market Securities. From the management side, we have Mr. Shiva Kabra, Joint Managing Director, Mr. Jaideep Barve, CFO. Now I would hand over the call to Jaideep, sir, for his opening remarks. Post that, we shall open the floor for Q&A. Thanks, and over to you, Jaideep. Good evening, everybody. I am Jaideep Barve, the Chief Financial Officer of Control Print Limited. Welcome everyone to the earnings conference call for the fourth quarter of the financial year 2023/2024 of Control Print Limited. We appreciate that you have taken out the time from your busy schedule to attend this call. Mr. Shiva Kabra, the Joint Managing Director of Control Print Limited, also joins me on this call. 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. Let me provide you some highlights of the performance of Control Print Limited for the fourth quarter and also for the complete financial year of 2024 on a standalone basis. First, let me speak about the revenues from operations. On a standalone basis, the revenue for the fourth quarter is approximately INR 98 crore, which is very good growth compared to the Q3 of the last year as well actually, Q4 of the last year as well as Q3 of the current year, which is approximately about INR 84 crore. On a standalone basis, the full year revenue from operations is INR 344 crore. The corresponding figures for FY 2022/2023 were INR 291 crore. Pipes, food, cement, FMCG, and beverages are our top five earning sectors. Our performance in the Q4 has been the highest amongst all quarters so far. On the expenses side, the cost of goods sold has remained more or less consistent between 40%-41% of the sales in the fourth quarter. This is almost in line with the previous periods. However, we definitely look for improvement in reducing this with optimized buying strategies. Employee costs, depreciation, manufacturing costs, and other expenses are incurred in line with the business operations. On the profitability levels, the EBITDA, PBT, PAT, and EPS, excluding the exceptional items, have grown up by 23.6%, 23.4%, -9.3%, and -7.4% on a YoY basis. There exists a considerable scope of improvement due to higher revenues, obviously triggering economies of scale. We believe we have got a strong way forward. Our focused marketing plans will obviously result in increased sales. We've got diversified sales teams focusing on results. Installed base is being increased, focusing on increased market share. There has been good traction in the track and trace and mask and safety products business, and Markprint technology will be used in Indian operations in the next year. With this, I am leaving the floor now open for questions. Me and Shiva Kabra will answer them. 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 the touch-tone 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, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. We will wait for a moment while the question queue assembles. The first question is from the line of Disha Sheth from Anvil Share and Stock Broking Private Limited. Please go ahead. Disha Sheth, may we request you to unmute your line from your side and go ahead with your question? Hello. Am I audible? Yes, ma'am. Please go ahead. Yes. Good afternoon, sir. Sir, we wanted to check that can you just give the details of what we have done from the company level to increase our sales force because that's the main thing going forward. As we have more sales force, we can get more business. And in terms of margin, where is the most scope for improvement? And thirdly, our target for around INR 400 crore sales by FY 2025, are we on a line to achieve that? So just three questions from my side. Hello? Yes, Shiva. You want to take this answer? Sure. So just going back, the first question was on the sales force. So we have an adequate sales force as of right now. There are a few additions that we are doing for some new business lines that we've added through acquisitions both here and internationally. But largely, we've got enough salespeople, and it's about more efficient management and running a smoother business as of right now. That's my own view. And we can increase sales quite significantly even with our existing base. We have, in my past phone call, I don't know if anyone has been available, but we have sort of over-invested in our sales and people service force, even though there has been an increase in people right at the end in anticipation of future growth. So we try to keep what we require for the next one-two years because it takes time to hire people and train them. And of course, there's also attrition at some point of time. So that's the first question on the sales force. The second question was regarding margins. So our margins have remained quite consistent over a period of time on the COGS basis, like on the gross margins. And on the net margins, of course, there's some fluctuations as a smaller company quarter to quarter because of some expenses being incurred in certain quarters versus certain other quarters. But I'd say overall, for our product lines and overall for our business as a whole, the margins are quite stable. Sometimes it might go down 1%-2%. Sometimes it might go up 1%-2%. But that 60%+ range is obviously what we target overall. Yeah, I mean, obviously, we do have some ideas on projects to reduce cost, but let's get that actually done and make sure it works before I see anything on that front. Then the third question was, "Can you repeat that again?" I think that was the first question. The INR 400 crore, are we on track to achieve? Yes. I don't know what we did standalone this year. Jaideep, I think it was like INR 343. 43. Okay. So yeah, we could. I can't see anything. Obviously, that was a forward-looking statement. Like I said, we don't make any predictions. That was a target mandated by the board on a standalone basis. We might do it. We might not. I can't see anything. So again, that's a prediction for the future. But we are just focusing on running day by day, month by month. Gotcha. Yeah. And sir, just on that, since for having the target in the mind, we must have sold the printers. So it's all about the consumer business so that we can predict that because three years, we have the if we sell a printer, seven-eight years, we have the fixed consumer business. So that way, I was asking. Yes. Of course, what we sold till last year, we can say that it was good till last year. Till last year, we were on target. And this year, of course, we can see what happens this year. So till last year, we were satisfied with the growth rate and the selling consumables at a rate which can afford us to continue going at least on a standalone basis. And that was on target last year, so to say. Sure. This year, we'll only be able to see, I mean, 11 months down the line or something. We'll find out. Yeah. Okay. Sure. Sir, and going forward, if we see coming four years, if we want to grow 20%, what are the ingredients we need, like gaining market share and other things? If you can specify what will help the company to grow if we and do we target to grow at 20% because industries that we are serving are pretty much growing, and there is now rural demand picking up, which will help the light industries. So what is your view on that if we see a little longer term of four-five years? Yeah. So I think that our industry growth rate is normally about one and a half times GDP growth or manufacturing industrial growth approximately. So I don't know. That will be like 11%, sub-11%, something like that is where the industry growth rate is. So there are a bunch of ways we can go faster. One is by going faster than increasing our market share. One is by adding some more products and seeing if we can do better than that. And one is by looking at some newer geographies where we can expand our sales of products to those places and to some subsidiaries. So we're working on those three, four different business areas. The first, obviously, is to maximize our sales in India itself because in the short to medium term, that is absolutely the most profitable extra rupee in sales for us. Yeah, and then we're also working on some other things to grow faster. But there's no target growth rate. We have to see what comes to us and make sure that it's in line with our business. And it's something that we feel in the long term, we can be profitable around it. We can maintain our margins. We can do the type of products that are sort of compatible with what we do right now because we have certain lines of business, and then we have certain technology or service-type modes around our business. So if we find things that are interesting to us and then maintain that, then it makes sense. And we don't want to get into certain other areas which might give us the growth rates, but might be much more cyclical or commoditized in that aspect of competitive. Sure. Okay. And sir, if you can give us a state of consumer sales this quarter and this year? Shiva, I can take this question. Please. Yeah. Hi. The breakup is for Q4, I'm talking first. It is 16% for the printer business. Consumables comprised 59%, spares 9%, and service 17%. What is spares? Spares is 9%, and service is about 17%. But if you want to consider the entire 12 months of 2024, it would be about 16% for printers, 61% for the consumables, 8% for spares, and 15% for the service. Okay. Sir, you mentioned that our target is to keep our EBITDA margin in this range of around 25%-26%. Am I right? I just missed that point. No, I didn't mention anything like that. I said our gross margin range should be consistent at 60% or higher. And then the net margins depend on, really, it can fluctuate a bit quarter to quarter depending on some things. That is okay. Yearly, what do we see? What do we? Obviously, to maintain the current margins, we'll go there because the SG&A should not increase as fast as the overall revenues. But that's something we're still working on because, like I said, in terms of cost, both the gross margins and the net margins, we have to what happens every time we add a new line of business increases our expense. And we need to so on a standalone basis, you might get a better idea. On a consolidated basis, it might drop because those are still nascent businesses which need to hit a certain economic scale to actually contribute to the bottom line and results. Sir, just. Yes, I interrupt, ma'am. May I request that you return to the question queue? All right. I I will come back and let you. Yes. Thank you. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Naysar Parikh from Native Capital. Please go ahead. Yeah. Hi. Hi, Shiva and Jaideep. Thanks for taking the question. The first one is on the investments that we've made in this quarter in Europe, in the Control Print B.V. Netherlands. Can you just talk a bit about that? What's the thinking? And are we looking at Europe as a market? And what's the strategy around it? Just if you can talk a bit. So if I just get that question because there are two different investments here. One is Control Print B.V., which is our holding company in Europe. Then there's Markprint B.V., which is the step-down subsidiary, which is an operating company. So can you just clarify this again so that Jaideep and me can answer this question? Codeology Group that we acquired, and then we set up the Italy subsidiary as well. So the question is around that. So first, I'll address the numerical part, and then the business part, Shiva, we'll address. So yes, there has been a substantial increase in investment. We got our SPV for the holding company, which is a holding company, the Control Print B.V. based in the Netherlands. Under that, we've got three operating companies. So one of them happens to be Markprint, which you are aware of that. So as per the management agreement, we've invested a further 5% into that company in this quarter. In the month of February, we've invested another about GBP 1 million in Codeology Group Limited, and we've acquired 50.49% stake in that company. And as recent as March 24, 2024, we've set up a new company called CPL Italia. And there's a small investment of over EUR 10,000 in that company. Shiva will talk about the business foresight into that. Yeah. So just getting back, of course, this is an important question from everyone's point of view. Now, just getting back to Codeology, so Markprint was an existing subsidiary of ours, and we've increased our stake out there. And that's part of our long-term expansion into the sort of coding-plus area, which is beyond the date code and batch code where people want to print up a larger amount of information on products. The second part was specifically with regards to Codeology U.K. I'll just explain that. Now, Codeology is someone we've been working with for about 15 years in the past, on and off. So we are well aware of the management team out there. And first, they make one line of printers called the print and apply. And that's something that's not there in our existing business. So of course, you might see a lot of products, especially on the outer carton where they have a label applied. We print directly onto the products. We don't use the printers which print onto a label and then apply the label onto the products. And that's one of the more specialized. There's some specialized techniques in there because of the label application and the whole integration of the print engine out there. So Codeology actually has a good market in that specific business. And so there are two purposes of this acquisition. The first is in a very specific way to try to print and apply a portfolio, a proven one, to our own product portfolio in India. The second part is that Codeology also feels that there is a market for our products in the U.K., and they are interested in expanding some of their sales and expanding that sale of our products in their geographies. And they already have a good customer base where they can cross-sell this. And of course, we already have a base out here who can cross-sell their print and apply. So that made sense, again, because of the comfort level of working with them for so many years and knowing their products quite well. So we've cooperated with them in a few different cases there also in the past. Now, the third thing, which is significantly bigger than the other two cases, is the Control Print CPL Italia S.r.l. That's a third investment we made. That's a significant investment because beyond the amount we've invested, there will be a substantial continuing investment in that. It's also a very large business opportunity now. There is a presentation that we would have released, an investor presentation. In that, there are some video links. I think that will help if someone can click on those and see what that product does, you'll get a better idea of what it is. But essentially, it's in the sort of single-dose, single-use, or single-serve space. V-Shapes is a company that has a lot of patents around this space. We already had a joint venture with them. We decided to acquire the entire company through our Italian subsidiary. So we formed a subsidiary in Italy called CPL Italia S.r.l., which is 100% step-down subsidiary of Control Print B.V., which is also 100% subsidiary of Control Print. In the end, it's 100% owned. CPL Italia S.r.l. bought all the assets of V-Shapes, including intellectual property and the trademarks and the customer base and so on. We purchased that entire set of assets as a sort of whatever basis it's called from V-Shapes S.r.l. Now it belongs to CPL Italia. Essentially, we are planning to develop this. It's a slightly different line of business to what we do. This is in the packaging machinery space. We are also in the packaging machinery space technically with our printers, but we're more on the printing side of the packaging machinery. This is more in the core packaging machinery to make single-serve, single-dose type products, which have applications in pharmaceutical, in cosmetics, especially the higher-end cosmetics, and of course, in certain raw food condiments, food, and certain types of sauces. So it can be used for any type of liquid packing. And also, there's a development for a powder packing option, which, again, is only primarily for the pharmaceutical industry. So it's a sort of adjacent space that we're getting into compared to what our existing business is. And the scope in that is quite the addressable market is quite large because there's a massive area of single-dose, single-serve. It is more expensive than cheaper areas like sachets. It can be cheaper than certain other areas like single-serve, glass bottles, or other types of things. But the space has to be created for that. So that's a sort of, yeah, a longer-term horizon in place. Got it. That's very helpful. Is it possible for each of these three can you give a sense of what was the revenue and profitability like for last year, and how do we see that going forward? And especially, what additional investments are we looking at which we need to do, which you mentioned that we might need to do in Italy? So what additional investments do we need to do in each of these three subsidiaries? If I can break the question into two parts. First, if Jaideep can address your. Yeah. I'm going to look at the phone now. Sure. Hello? Yeah, Jaideep. Yeah. The line is getting cut at parts. Hello, Mr. Shiva? We are unable to hear you. I'll just reconnect the line for Mr. Shiva, sir. One moment, please. Hello? We have the line for Mr. Shiva connected. Please go ahead. Yes. I'm back online. So actually, I got cut off for a minute there. But Jaideep was going to address the first part of the question, which was the specific revenue numbers, I think, that you guys were discussing. But approximately. Yeah. For the Codeology Group, it is about GBP 700,000. That's the revenue for them. For Markprint also, it's about EUR 750,000. And CPL Italia has just started. If you can, for CPL Italia, which we are planning to invest in, is there we acquired their assets, but what was their revenue like? Is there any sense of what is the market potential like globally or in India? So what happened was in the COVID time, we sold a bunch of machines that had sanitizers, and the revenue was something like the EUR 12 million space for those two years, EUR 12 million a year. Then it dropped to about EUR 2.5 million or EUR 3 million because all those machines sort of went off. And it is a slightly different model because although it's a packaging machinery space, the material also has to be purchased through us because it's a proprietary it's like a patented material also that has to be used. So it's a bit like Tetra Pak where you get the machine from us. The Tetra Pak normally sells, but normally, they lease the machines to you. But then you have to also buy the Tetra Pak packs from Tetra Pak. So it's a sort of different space in a way. So we also felt more comfortable with it because there was an innovation around it, it was more technology-based. And then it was a combination of a machine and an aftermarket, which is sort of where we felt we had some understanding of this area to that extent rather than just a pure capital machinery sale. So the thing is, the addressable market is very large. What I would say is the company started, honestly, in 2017 or 2018. And then they had a big burst through COVID. And then when the COVID bubble burst, they got into some and that's when we sort of tied up with them in the end of 2022. And then they got into some financial issues. And that's sort of where we got the opportunity to purchase them because, like I said, they had a big base in certain markets. But then some of those customers and industries, especially in the sanitizer market where they had a very large profitable sale, that sort of collapsed very suddenly, as you can imagine. And then the refocus was obviously much more expensive and taking a lot longer for them with a high-cost base, which then the good thing is for us is they've cut their cost base. They had 47 employees. Now, when the time we purchased them, they were like and right now, they're 14 employess. So the cost base I mean, the amount of people and the size of the company has already been right-sized in a way. So it's very easy for us to step in without getting into all these messy areas of doing other things. And we bought all the assets we want without dealing with any of the other past liabilities and things and whatever those are. But the essential thing is I think the business scope is quite large. Obviously, that's the reason we've gotten into it. So it could be significant because it's a large addressable market. In the end, the product is good. It's high quality. It's premium. It's innovative. But it's like a marketing type of a product. There's no direct comparison, right? There's no Tetra Pak created its own market, right? They're competing with glass bottles or with HDPE bottles or with pouches, right, like how we get pouches of milk. So out here also, we have to create our own market if you understand what I'm trying to say. It's very difficult for me to make predictions, but I think that the scope is significant. It is going to take one or two years for us to also get everything perfectly in place before we really see positive sort of profitability in this product. I think it's going to take two years if you ask me of an investment phase. I do want to point out that the material is quite expensive. There needs to be a major investment in improving the sales team, improving the coverage in multiple geographies. There also needs to be a major investment in reducing the material cost because the material cost is, on a per sachet basis, is quite I mean, per mono-dose basis, is quite high. That needs to decrease because, honestly, for the larger customers, the cost per dose or the cost per pack is more important than just the capital cost of the machinery. There's some positive things and some negative things. There's also one big issue that we have, which is the current mono-dose is the packaging material is non-recyclable. It's on a combination of aluminum and some other polymers. And we definitely need to come out with a recyclable option because a lot of customers, especially in pharmaceutical, it doesn't matter because they need the aluminum barrier properties. But definitely, in the food and cosmetic market, there is a lot more pressure right now towards sustainability if you look at it in a broader perspective. So definitely, customers are putting a lot of pressure on us, not only in terms of interest in the product, but they also want a recyclable option. We do have some recyclable options under development, but even that will require significant investment to take to a commercial size. I think reducing the cost of the material, developing the recyclable option, getting all the certifications for that, continuing to develop the machinery, and keeping that base alive, the technical knowledge base alive in Italy, and developing a CLC, these are all significant expenses and investments. I feel like it's going to take us, yeah, you can say 24 months, maybe. What would be the amount of investments you would target to do, combination of maybe CapEx, OpEx, or whatever, but over the next one, two years? See, I don't know offhand, but I know just the so I think over this current year in terms of the entire sales, the entire Opex budget, including R&D, which has been more than EUR 1 million, EUR 1.5 million of the R&D in that because we have to develop two, three other products in this range, including the material, would be about EUR 4 million. Including the entire Asia-Pacific sales, including Africa, will be now run from India. And we are going to keep people in different areas. Florian will run Europe from Italy. But yeah, we need to add a certain number of high-quality salespeople in both geographies. That's going to cost us a significant amount of money, more than EUR 1 million, about EUR 1 million a year, is what I'm thinking. EUR 1.5 million for R&D, about EUR 1.5 million to run the company as it is with the people, the technology base, everything else. So yeah, that's sort of where you can take it as a EUR 4 million budget to run. Secondly, we are looking at the material option. We are looking at multiple options. We're going to source from some suppliers, bulk commitment, whether to make a unit ourselves, and some other things. So we have the technology and the formulation of how to make the materials, but it was not being made. And right now, we are importing these materials from Italy. From Italy, it's being sold to multiple customers worldwide. There was also one other question, I think, that you had so that part, we're still getting much more in-depth conversations. I wouldn't like to put any numbers out there because it is still tentative. We have some approximate ideas, but till we don't get a final ballpark range, I wouldn't like to comment on that. We've not even decided if we are going to go ahead with manufacturing the material. We're going to outsource it entirely. We're going to how exactly this method is going to be because that board meeting will happen in our next board meeting. We'll probably announce something much firmer on that basis once we all have a chance to discuss it and we have a chance to put it up. Yeah, just to give you an idea, V-Shapes last year did about a EUR 2.5-EUR 3 million sale, a EUR 3 million sale or something. That was the size that they did before we purchased it as CPL Italia. So did that answer most of the questions, I think, or more clarity than anything that? That's very helpful. I just have one follow-up to that. It seems like, one, it's obviously different, like you said, Shiva, different geography, and the amount of investment seems very high, right? So what do you think was the need you felt that or you felt what was the compelling business sense to do this? Because what you're saying is that the market needs to be created, and a lot of R&D, etc., needs to happen. And it's obviously very different from our printing business. So what was the need for such a different and big diversification, which would need so much investments? What was the thinking behind it? Yeah. So the first option is that, like I said, we have our clarity quite at least for me, personally, I have a lot of clarity that there are different types of businesses which are very good in this space. There's Huhtamaki, PPL. There's Cosmo, Polyplex, and those types of guys. And they're more in the film business with relatively speaking, less innovation. So they're more relatively speaking, please don't take me in the wrong way or anything like that. But they're more in a slightly more commoditized space. And they are making a certain margin now. The way our company is structured is that we are in the printing space. We are expanding there. So the idea was that we've sort of done what we've done in coding and marking. We are, like I said, in research and development and innovation. That's sort of more where our core is. We started with something 15 years ago, and we developed a bunch of other products and initially expanding our product range on those things. So there is like I said, I agree with you that the innovation is not in the packaging machinery. There's a lot more mechanical expertise required in that space. But we are getting people who have done it. If you understand what I'm saying, neither is the thought of us to move the base from Italy to India. But yeah, I think we're comfortable being personally. I'm much more comfortable being in a space which is more around innovation, more around IT, more around marketing, and you're creating new needs for customers, frankly, rather than just being sort of closeted in a very specific space where we feel that even though there might be less risk, but there's also less reward. So we definitely back our management skills. We find out in the long term what the reality is. But we definitely believe that we've got that capability of doing it. It's worth the risk. The reward is worth the risk because the scope is large. The second thing is, specifically, I want to address that there is I think because we were working with V-Shapes for about a year and a half, we have sold a machine. We have worked with them. We have a fair idea of the interest in this product from customers in India. That's obviously where the overlap was because we are selling to the prime customers in India. We have a huge customer base in the packaging space. There is a definite interest in this product. It is meeting a certain need. Like I said, there are certain changes in terms of the cost of material, which might not actually matter. Honestly, my feedback in Europe is the cost of the material is not so critical. They seem to be willing to swallow that slightly higher cost. In India, that cost of the material is quite critical. So you can go for maybe you can go with a INR 15 sachet right now. If you get the cost of the material down, you can even target a INR 78 sachet or and try to change a INR 78 sachet to our sort of semi-rigid mono wrap type of a solution. So what's happening is that the addressable market can increase significantly, but there is an interest. And it's only after sort of feeling that or selling this in India, getting feedback from customers, understanding the market, at least the Indian market quite well, the belief is that there could be a strong demand for this product if this is done well. Of course, now, the key thing is if this is done well, and there could be. So I agree that there's a risk element to it. But in the end, if we have to do something new, there is always going to be a certain amount of risk. Even if we launch new printers in our digital printing space or whatever it is, in the end, I might unless I get some customer saying that, "Oh, I'll buy 23 of these printers at this price in advance," which doesn't happen normally if you create it. You have to still innovate in that particular area. So there is a risk versus rewards. I know I'm taking a long time for this answer, but I wanted to because this is an important move that the company has made. So I wanted to clarify this in as much depth as I can. No, that's very helpful. Thank you. And just a data point. Sorry to interrupt, sir. Have we requested you return to the question queue for follow-up questions, please? Okay. Sure. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Shreyas from Monarch Networth Capital. Please go ahead. Hi, Shiva. Thank you for the opportunity. My question is related to, are you looking for some more acquisitions this year? No, no. So right now, I think we have a handful. There is a second area that is going on, which is because we've got a good product lineup of our existing coding and marking and digital printing products. We are looking at some geographical expansions, but not acquisitions, just expansions, minor. We might look at setting up one or two outposts here and there just so that we can sell in different areas. It might also help for our V-Shapes business that we've taken over so that we have some areas where we can have a more direct service and setup center. But I think that there's no more acquisitions till we streamline V-Shapes to at least a break-even basis. Like I said, I'm sure can take 24 months. But so till that point of time, nothing major. I don't think it'll be allowed anyways, but I wouldn't ask for something like that in any case. So. Any CapEx plan? That's there. And yeah. Yes. You told there is a CapEx plan, right? No, no. I said we're still exploring it. There's a project that we're trying to report that I'm working on because I need to understand, I think, for the V-Shapes business, the cost of materials is a critical aspect. In the Tetra Pak business, one is the machine you buy from Tetra Pak, but then the cost per pack can also matter a lot in terms of the volumes. So it's the same thing in our thing. The machine cost is expensive. I wouldn't get past that. But for the larger customers, the major customers, it's not a stumbling block. But for the cost of material, it could be a stumbling block. So I'm just giving you an idea. Just on a hypothetical basis, if I was speaking to someone like say, Marico, and they were looking at a single dose of some sort of whatever, Set Wet Gel or whatever those things are. And for them, maybe they can say that we can afford INR 1 per mono dose or per mono wrap, but we can't afford INR 2. And maybe right now, we are at a INR 2 cost per mono dose, just to give a hypothetical example. So we are trying to get as close to that viewpoint so that we can get into a much more bigger addressable space. So in pharmaceutical, the material cost is not an issue. It's just the marketing needs to be improved. And that's a sector we can easily target as of today in India because the material cost is well within their budget. But if you want to get into the food and cosmetic space, like single-serve honey or jams or Nutella-type products or all those sorts of things, we have to look at the cost of the material. There are multiple options here. We can try to outsource in a large way with a large commitment, do some other things. We can look at manufacturing in-house or through a dedicated contract package. So there's two, three things that are being worked out. Like I said, till I don't get the entire details sorted, till I don't get a board approval, till we don't know what's happening, how we're going to move ahead, it's difficult for me to give any type of specific numbers beyond that. But I can say that, yes, we are exploring multiple options here. Thank you. Thank you. The next question is from the line of Deven from Marcellus Investment Managers. Please go ahead. Hi, there. Shiva, what's the profitability for V-Shapes and Markprint for the last year? No. So V-Shapes was obviously purchased by us separately. So I can only talk about what they in fact, they were profitable if you take out the interest payments and you look at their cash flows, they were cash flow positive, maybe even to the tune of EUR 1 million or something even last year. Markprint was, I think, about break-even last year, I think, if I remember right. But Jaideep, approximately, I don't know. If you can give some numbers. Last year was a bit of aberration, but they still have a good GP margin, which is about 53%, which is in line with the previous phase. What had happened is that they had about two months of some low-line business. So last year was an aberration. So it couldn't turn into green last year. Okay. Got it. For Codeology, what was the profitability? Well, for Codeology also, I mean, both these companies are based in Europe. So quite frankly, they had a dip in the business for two-three months of the year. So Codeology also, on a consolidated basis for both of entities, it's into negative right now for 2024. I can say that with Codeology, our discussions have gone on for more than a year. There were some issues with the tax structuring, and therefore, the transaction was delayed by a year because of something to do with the taxes. I can't understand exactly. Something to do with some taxation matters. And therefore, they needed to do some transfers, something or the other, and then wait for some time before going ahead with this. And I requested them specifically that assume that the transaction will happen and go ahead. So they have been investing at a higher rate than what they normally would. And that could have also been one of the reasons for their slightly lower results. So with Codeology, I wouldn't look so much at the profitability last year because we did request them to increase their size and scope of business. They did hire some additional people and some additional costs they've undertaken specifically in the last year. It was with the knowledge that this transaction will happen whenever this taxation one-year period or whatever happens gets over. Okay. Understood. And second question, Jaideep, this quarter, there was a tax adjustment of INR 32 lakh in Q4. So what was that regarding? No, actually, we have some gains from the sale of investments. So that actually was the reason. Other than that, our margins are still on the same thing. There was a similar tax expense in the previous quarter, right? That you return to the question queue, sir, follow-up questions. Sure. Thank you. Ladies and gentlemen, we will be taking one question per participant going forward. The next question is from the line of Naysar Parikh from Native Capital. Please go ahead. Yeah. Thanks for the follow-up. I just needed a couple of data points. One is. Sorry to interrupt, sir. You're not audible, sir. May I request you to use your handset? Yeah. Thanks for the follow-up. Just a few data points. One is, can you give the number of printers sold in the quarter year? Second, the tax impact was high in the fourth quarter. So what was the tax rate for the year? It It was also high. So what is the reason for that? And third is, there is an INR 5 crore loss if we compare consolidated and standalone. So consolidated is lower by INR 1.5 crore. That loss is attributable to Markprint, or is that something else? Yeah. So can you just give me the first question so I'll go question by question? Number of printers sold for the quarter and year? For the year, it was about 2,859 printers were sold. Hello? Yeah. For the quarter, it's about 868 printers? Okay. So it is a decline on a YoY basis, basically, right, on number of printers sold? Yeah. It's a number of printers. It's consolidated this year. Okay. So So is there a loss of market share, or is it just a mixed change? Yeah. Shiva. You want to take this question? Yeah. So out here, overall, if you look at the actual value of printers, revenue has actually gone up. And the printers have gone down marginally. And what we communicated in our earlier calls is that in fact, there was a question earlier about the number of salespeople and all of that. So we are focusing more and more on the top few hundred, maybe top 1,000, 2,000 customers of India. So we've been much less aggressive in pursuing smaller customers. And we are focusing more on big deals, big customers because we are successful in that. That's our core area. And those are the people who don't mind paying extra money because they want 99.5% reliability, which our Control Print gives, versus 98%, which some secondary player will then provide, maybe imported from or 95%, 98%, something imported from China or some other thing or whatever it is. So we are more in that top space with the more innovation. And we've changed our sales model. And it's taking time because these are, I can say, the pipeline looks good as of right now, but in some people even asking some predictions for the year, I can't see anything what's going to happen because nobody knows what's going to happen in the future. But the pipeline looks good overall. And it's much more lumpy now because they're much fatter cases, but they are also much longer gestation periods. So I do see sales increasing past the previous levels. But also, the value of the sale in terms of the amount of business it generates for us over the lifetime of the printer will be much higher per printer. And that's what our target is fundamentally. So it could be that there were 2,800 and whatever printers sold last year versus 3,200 the previous year, something like that. But these 2,800 printers are more profitable, and they're going to give us a significantly higher business per printer than the previous 2,200 and so on. The target this year is to increase the volume further without compromising the quality. So it's a bit of a learning experience. It's a bit of a change for us. Like I said, we've not ignored the small. We're not out of that. We're not exiting that market. The focus is we have a limited amount of salespeople on the street, and we can't afford to spend too much energy on pursuing smaller customers. The message is very clear to everyone that this is our core base, and we need to make sure that the core base is focused upon. Got it. Jaideep, the next question was on tax impact. Huh? Yeah, tell me. The tax rate for the last quarter, last two quarters is high, and even for the year is relatively higher. Yeah. See, we follow Section 115 of the Income Tax Act. So I mean, basically, what has happened is that there have been some gains to the sale of investments. So as a result of that, the provision for tax, in fact, that has gone higher this year. Thank you. Mr. Naysar, may we request that you return to the question queue for follow-up questions? The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Yeah. Namaskar, Shiva. Namaskar, Jaideep, right? I'm Saket Kapoor. Thank you for this opportunity. Sir, I missed a lot of part of the phone call today, sir, because of some discussions. So maybe I may be repetitive, sir. But just to put my question in a nutshell, with the type of investments that we have done in innovative Markprint and now the other assets, the profile of the company is very different to what Control Print has been known for to your investing community for the last two years. And we have reached that scale and margin profile which the investing community has been anticipating. So kudos to the team for delivering a steady set of numbers. And so we and also the coming forth investors also like to understand that how are these investments going to get nurtured and benefit us going ahead since it's a sizable investment? For the other financial aspect part questions, I have already sent to Jaideep, sir. Sorry if you have answered them during the call. I'm not aware. This was the sum and substance of my questions. Jaideep, could you answer those financial questions, please? First, before I answer the rest of the questions. Yeah. Saket, can you just tell me the first question? I mean, the line is a bit hazy over here. Yeah. No issue, sir. Sir, my question. The questions that Saket-ji has sent to you on email, can you answer those first, please? Yeah. So Saket-ji, I mean, you had raised about four questions. One was on the increase in the additions to fixed assets. Correct. So yes, it is true that we've done some sufficient additions to the fixed assets. Now, on a standalone basis, itself, it's about INR 20 crore. And the main reason for it is that there's been a substantial increase in the coding and marking machines on the rental basis for this year. It's about INR 13 crore, approximately. Plus, one of the assets what I mean, is now currently the V-Shapes machine, which we have purchased. So we have done a lot of trials on that. And after successful trials, then we have capitalized that asset. So that is about INR 5 crore. So roughly about INR 20 crore got expended between these two additions. And we also have the investment in. Sir, one second. Sir, out of the INR 20 crore that you have capitalized, how are we going to benefit in terms of the revenue addition and the margin addition from these two assets? See, Shiva would have already spoken about the value addition in terms of the V-Shapes packaging business. So what has happened is that we. Jaideep, can you hold on for one second? Yeah. So, Saket, the machine we put out on rental basis is when some customers end up purchasing the machines from us. We don't show up enough sales numbers, but some of the larger companies now, they prefer sort of leasing the machines on a per printer, per quote basis and paying us on a per print basis or on a per machine per year, per line basis. So normally, we enter in some companies in a multi-year contract basis. And then we put our printers in their factories, and they extend it on a month-to-month basis for, say, five years. So it's a difference between buying a car versus leasing a car for five years. And after five years, you give your old car, and you get a new car up. So now, technically, the problem is the asset is in our suppose I'm an auto manufacturer. The asset remains in my book. Now, for whatever reason, last year, there was a lot of sales on rent basis or rental lease-type basis or whatever you want to call it, lease rentals. And therefore, our book size increased by INR 13 crore+ just on that one individual basis. Then the rest were some other things, including a V-Shapes machine. But I think now, Jaideep, you can answer the rest of the questions, please. Do you understand what I meant? Just to explain this first question out of that INR 21 crore, INR 13 crore, it's on a rental basis. Of course, those same printers will consume ink. They will consume other things. We are going to charge rental or lease prices for them. So they will benefit us. You can consider them as an alternative. Instead of just buying the machine and buying the consumables separately, now they're leasing the machine, and they're buying the consumables. It's an alternative model to our existing sales process. But because of the way it is structured, the fixed asset of those machines comes into our book, and then it gets depreciated. So it becomes a fixed asset. So we'll manufacture the machine. We'll convert it to a fixed asset. Then we'll depreciate it over the life of the contract completely. And at the end of the five years, we'll take back those machines. And that customer normally signs a new contract, sometime in the third or fourth year, to take back these machines. And at the end of the fifth year, he'll replace with new machines from us. Right. Right. But how will the revenue profile and the margin addition be from this contract? And what revenue addition and thereby the margin? So obviously, there's some lease revenue, and then it depends on the consumption per printer basis. But in general, of course, we do these types of businesses with customers who are, you can see, high-profile customers because normally, we tend to prefer selling the machines. But if we're doing something out of the way, then we want to try to get something extra. So compared to our regular revenue and margins, it should be, technically speaking, extra. But of course, I cannot give you an exact number if you do it with. But it should be slightly better than our normal margins, for sure. Right. Yes, Jaideep, please continue. Yeah. So Shiva would have explained to you about the INR 20 crore for the fixed asset addition sales standalone. Plus, as late as 29th of March, we are aware that we have purchased certain business assets of V-Shapes, which are now part of the balance sheet of CPL Italia S.r.l. So out of that, it comprises land and building, plant and machinery, and the patents. Yes. Yeah, Saket-ji. So does this help you? Sir, I will take it offline. Whatever I could not understand right now. The remaining questions also for the closing balance of investment and the cash and cash equivalent, I will take offline promise. You can call me anytime, Saket-ji. But Shiva sir was answering me. He will be answering me the rationale. Now, going ahead, the profile of the company would be very different than what the coding and marking work we have done because now our acquisition are in foreign land. We are exploring new things, and we have invested substantially in those assets. So the investing community would be needing more understanding on the investments, sir, which you have made. I congratulate you, firstly, on the presentation part also, Vinayak and the team, also on elaborating on giving us some hints on how the current structure is. But more details and more understanding are needed to get an understanding how will we map the visibility of the earning profile of the company and how are these assets going to create value to us. That is the sum and substance of my questions. So, Saket-ji., as you must be knowing because you have caught me on calls for a long time, you've been an investor, and we appreciate it greatly. Like I said, Control Print is a coding and marking player, as you know. Over time, we have developed more of our own technologies. From being mainly a CIJ-only player, we have also developed some other products. We're doing well in those other products. We've grown our non-CIJ business. Therefore, in the past few years, we've been able to grow slightly faster than the market, as you are aware. We have gained some market share over the last three-four years. We believe our product portfolio is strong, and we can continue to maintain that. Of course, nobody has seen the future, as you know. The second part, as you are aware, is that in the end, the entire coding and marking business last year in India was about between INR 2,000 crore and INR 2,100 crore if you add everyone. We were INR 345 crore or something of this or INR 340 crore, INR 345 crore, whatever it was. So we are already at about approximately 17%, take it as 0.2%, 0.3%, depending on what your expectation on the market those are, is crore, is whatever. By size. So there is a limit in this market size because in coding and marking for date code, batch code, whatever, the amount we charge per print is literally a paisa or something. It's quite low, if you understand what I mean. So there is a limit to how fast we can grow because it depends on how fast the volume of our customers grow. So basically, what we did is we did for three different types of expansions that we've gone for, two which were extremely planned. One was to get more in the digital printing or coding plus business where a lot of people want to print a lot more information online. So maybe they want to print the ingredients, the barcodes, other types of other things online, not just date code, batch code, MRP, or whatever the normal thing is. Get into higher resolution printing. So if you see things like wooden stuff like that where people are printing big logos, people are even going to do two-color logos now. We are even offering multi-color things. So we're offering those types of things with our QR code, other types of solutions out there. The second part is that we entered with the track and trace business with our software division, which we've also invested in the last two years. And now, I feel, in fact, it's finally turning around. We're getting a positive set of feedback. We're getting a positive series of orders in the last few months. And now, I would say at least it's a break even. It's not contributing positively in the last two-three months. So that was a well-defined second step, which was part of our business, which was not only do people want to print information, but they also want to create the entire supply chain. We are going far more deeper into the software side and the automation side out there. The third part, which we also discussed with everyone, was that we are looking at some geographies. We all agree that Sri Lanka failed because there, by the time the business was growing somewhere, the COVID crisis happened. After the COVID crisis, the economic crisis happened. We agree that things were a failure. But then that doesn't mean Sri Lanka is the end of the world. After some persuasion of our board members and other types of people, we feel that we are confident that we can adopt a light strategy, which is focused on some areas where we have a competitive advantage, and try to, again, look at some other countries in Asia, Pacific, Middle East, and Africa where we can at least focus on some specific products where we've got a good advantage and look at whether we can increase some sales in these areas. These were three defined areas which we had explained to you and to other investors that we are looking at, and we are working on it. Of course, it's taking some time because it's a time and investment, whether in developing a sales, a market plan, a sales strategy, and so on, to be able to address these areas. The idea was that although we are growing at a luckily, at a fair rate because you've got a good competitive market positioning, you've got a good team in the Indian market. But in the end, the market is only so big. It's INR 2,000 crore or INR 2,100 crore. It's growing at about 12% a year. The GDP is growing at about 7% a year. Of course, if the GDP grows faster, this will grow faster. But we felt we could do this and do some other activities also. And we wanted to take these avenues to explore for the growth. So that was the thing that's happened. And this is where something like Codeology has been added because they have a print and apply system, which is of high quality. So we wanted to add that product line to our own portfolio of products. This question was raised earlier. So the print and apply is a core coding product. We have not been in that area because there's a certain amount of mechanical expertise that is required, which is different from just inkjet expertise. Normally, these are run on thermal transfer printers. So again, more of a secondary product for us than a primary sales-focused product. But it is part of our lineup, and it is adding to our product range because we already are selling these products to our customers. Our existing customers do have some demands of these printers or these label print and apply applicators. So we're working on that. That was one of the key rationales of investing in Codeology. With Markprint, it was a key rationale in building with the coding and marking plus towards the digital printing side in that in-between space. We have developed some products on that. The Markprint products work quite expensive for the Indian market. Now, we do have some products which we have developed off the support or the expertise from Markprint, which can be leveraged in the Indian market. We also have a better idea where Markprint products can be sold directly, which is frankly more in commercial printing, which is not more in our packaging space area. We have to see how we can explore that area. That's less price-sensitive than the packaging space or the coding online space. So we hope to see more results on that space in this coming year, in this financial year itself, both on the track and trace and on the coding plus things. With Codeology, like I also said, adding their product line will take some time to integrate because there's a certain amount of technical expertise that's there. It's not currently the mechanical level of expertise is not there in our company to that same level. So we are understanding, obviously, with their support. But we've just started this process. And maybe towards the end of this calendar year or financial year, we'll probably get a better idea of how exactly it can be utilized for some of the cases that we have or some of the customers that we have to address their issues on irregular printing objects and even some regular objects where they want the label. They don't want to print directly on the product. And at the same time, Codeology also is interested in selling our coding and marking products, our product range in the U.K. market. And so there is a synergy there also. So that's the justification for that investment. But yeah, it was like a more simple product acquisition and for them, also for other territory opportunity where they have a good existing base in the food market out there. And maybe this could be a product sold to their customers. And then the V-Shapes business is a large market opportunity. It's a different business than what we do. There are a lot of challenges and investments ahead, but the potential reward is big. I have covered it earlier in some depth. There were a few questions on this topic, and I have tried to address that. So I think the easiest thing would be to just see that transcript whenever Jaideep publishes it and read through that. There is a large scope out there. It's a different market, so there's no definition of what it is. But in general, the single-serve, single-dose market is a large market. And with our own experience of selling V-Shapes products in India, we have a reasonably high level of confidence that this is a strong product, and there is demand for this product if done properly. And yeah, there are definitely the team needs to be strengthened. The sales team needs to be strengthened. The material costs are too high. A recyclable material needs to be developed. So there are many challenges in this business. I don't want to hide away from this. It's going to take us at least two years or not at least two years, but probably two years to put this into a no-profit, no-loss business. But even though it's an investment, I think the potential reward in this business, the potential addressable market is quite large. In my own evaluation, the risk was definitely worth the potential reward. I hope I covered all those issues. Some of the deeper issues, especially regarding V-Shapes, if you read the transcript that Jaideep will provide shortly, then definitely, you'll get the full, yeah, some of the answer on that for you. Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. From my side, first, I want to thank everyone for participating. I know it's a very busy period, and I appreciate people taking their time and some very thoughtful questions coming. I think that there were some more talks on the acquisitions, and I think it's a very interesting point and definitely something that we are very conscious of. This is not a headbrain strategy where we've just gone and bought some stuff. Like I've explained, there are some markets we need to address. I think that I want to be honest. Everything seems easier on paper, but it takes slightly more time to integrate and stuff. But we are seeing those benefits in V-Shapes, in the track and trace team already, and we're expecting both of them, not in Markprint and in the track and trace, and we're expecting both of them to contribute quite positively in this coming year. So just looking at that, I think it's going to take at least two years with V-Shapes because of the nature of the businesses and the challenges are bigger and small. But we do believe that there is it's a substantially positive opportunity for us. And we think that we can execute on this. We can justify we can fulfill this product's opportunity. Yeah. Thank you. Yeah. Thank you, everybody, for being part of this call. Look forward to your continued support in this year as well. Thanks a lot. 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. Thank you, everyone. Thank you for.