Ladies and gentlemen, I welcome you all to the Q1 FY 2026 post earnings conference call of Control Print Ltd. Today on the call from the management we have with us Mr. Shiva Kabra, Joint Managing Director, and Mr. Jaideep Barve, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements which may involve risk and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the period ended June 2025, their plans and vision for the coming year. Post which we will open the floor for Q&A. Over to you, sir. Good afternoon everybody. My name is Jaideep Barve and I am the Chief Financial Officer of Control Print Ltd. Welcome all of you for the earnings conference call for the first quarter of financial year 2025-2026. We appreciate that you've taken out time from a busy schedule to attend this call. Thanks for being in this call. This is Shiva Kabra, the Joint Managing Director of Control Print, also joins me on this call for the first time. Joiners on this call, more information about our company can be obtained by visiting our website for information. The detailed presentation has already been put up on the website as well as in the investor presentation notification on the exchanges for this call. Now let me provide you some highlights of the performance of CPL for the first quarter. On a standalone basis, the total revenue for Q1 is approximately INR 109 crore, which is a good growth from approximately INR 89 crore in Q1 of last year. For information, the total revenue of FY 2024, FY 2025, FY 2023 FY 2024, and FY 2022 FY 2023 is INR 395 crore, INR 347 crore, and INR 295 crore respectively. Regarding the operating revenue, the Q1 revenue is INR 100 crore, which was INR 88 crore in Q1 of the last year. We. Had an exceptional income of INR 3.99 crores. This pertained to the capital subsidy related to the masks and safety products, which is about 30% of the investment in plant and machinery. The cost of goods sold is around 43% of the operating income. Manufacturing costs remain approximately at 3%. Employee costs are 18% of the operating revenue. Depreciation is about 4% of the Q1 and other expenses are 13% of the operating revenue. All the costs are in line with the business needs and in comparison to the earlier periods. On a consolidated basis, the Q1 operating revenue is INR 111 crores. This was net INR 8 crores. As for the June 2024 figures, the way forward, we will consolidate the coding and marking business, will increase the install base, and will provide robust solutions. We'll capitalize opportunities in the track and trace segment by more focused marketing, and the sales strategies will increase revenue in the packaging sector both in India and overseas through either of machine sales, co-packing, and the laminate business. Overseas subsidiaries will continue to be monitored with focus group targets. We have already provided the business plans and they will ensure that they'll be mandated for execution. Now we leave the floor open for questions. [Anish]. are available to answer all your queries and questions. Thank you. B will request the participants who wish to ask the questions to please use the option of raise hand. I also request the participants to limit their questions to two per participant so that everybody has the opportunity to ask. We'll take the first question from [Jay Chauhan]. Please go ahead. Thank you for the opportunity. My first question is, you have. Been very clear that scaling the cost effective fully recyclable packaging materials is a key bottleneck for V-Shapes business, especially for the. Food and hospitality sectors, could you provide some specific, you know, quantifiable milestones for this financial run. For instance, like what volume of fully recyclable packaging materials do you aim to produce, and at what target cost per package do you. You believe the solution becomes viable. A mass market cosmetic consumer or be it any customer? Can you please guide me on that, sir? Jay, this is Shiva Kabra. It's a fair question. Right now our cost per piece for a standard, you know, 6 mL-8 mL type of a sash mono dose is about INR 2. In general, we are targeting to get down to INR 1. As of right now, we're not manufacturing any material, we're importing. Can I lost your voice? Yeah, yeah, we can hear you. I said as of right now we're not manufacturing anything ourselves. We are working on a fully recyclable package. It's still not complete. There is a speed limitation in that, so we're trying to work on overcoming that. Right now it's costing INR 2 per piece. We're trying to target to get it down to INR 1 by the time we manufacture it ourselves. A regular sachet is in the region of INR 0.35, just so your comparison is there. A thermoform would be in the same region. A thermoform with barrier would actually probably be more expensive. It will be similar, like about INR 1.5 to INR 2 a piece, because the amount of material being utilized is quite a lot, a lot of material. We're still working on the recyclable part and we still have to start the manufacturing of the material. We are working mainly on the development of the fully recyclable stack, and once we do that, then we intend to manufacture that itself rather than the current structure, which is actually not recyclable. Thank you. That's from my side. Thank you. Thank you, Jay. We'll take the next question from [Roshikesh Bise]. Please go ahead. Thank you for taking my question. My question is essentially on the lines of the competitive pressure. How are you seeing the competition impacting the V-Shapes and the mono packaging business right now? I'll also put out my second question. Like we saw the drop in the. Margins and the drop in the EBITDA at the consolidated level, the reason that was mentioned in the presentation was that it is because of the higher printer sales that the gross margin has reduced. I would like to have an explanation on that also, please. Thank you. As far as the gross margins dropping, I don't think it was so much because of higher credit or sales. I think it was more because of higher expenses that we incurred in the packaging business. We're still making a loss in that business, a significant loss. That's why there's a loss abroad in CP Italy, which is where we are doing our packaging business. There's also some sort of a large set of expenses that we're incurring in India as we develop the business in Asia Pacific directly from Control Print in India. I think those two things are contributing to a variation in the results as far as our coding and marking business grows. I think the track and trace business is doing better and what I would say is this year should be break-even if not profitable. That's growing and as the volumes are scaling up, we're seeing, obviously, because there's a fixed cost that's there and as the volumes scale up and we get more repeat revenue in terms of contracts, AMCs and stuff like that, the profitability of that business is increasing. That addresses somewhat the gross margin question. The reality is that in our coding and marking business we can increase the margins. We've not been taking up some price increases and we've undertaken a price increase which we announced about a month or two ago. That's with effect from the 1st of August. Practically speaking, it'll take one to two months to roll it out because customers are good at negotiating and all that other type of stuff. What we should do is start seeing an effect from Q3 in terms of the coding and marking business margins increasing. We're also making sure that there's a little bit more tightness in the way we are running things overall. That's where I'd say where the margins have dropped. It's just more because of some expenses that have increased. In terms of that, like I said, even on the material side in the packaging thing, as of right now, everything is still being imported. It's not like there's much of a margin in India or elsewhere because we're buying it from high-cost suppliers in Europe. Honestly, it's not really much profitable on the material side. Till we don't manufacture the material or we don't do something to sharply reduce the cost, it's not going to come down drastically. That's something we're still working on. The second part of your question was on the packaging business. If you can just repeat that again for my benefit, please. No, my question was essentially about the competitive pressure that you are seeing in the monodose packaging business and V-Shapes. There is no competitive pressure because as a patented technology, we are competing against different technologies. Some people might use sachets, which would probably be the biggest use of single use packaging. Thermoform is another thing. When you get your jams and those things or your Amul butter in that little cup and you peel off the top, that's like a thermoform. Of course, sometimes people use single use glass bottles or tubes for expensive types of packaging. I'd say, and of course in the pharmaceutical sector there's a more specialty type packaging also which is single use. There are no apples to apples comparisons out here. There are apples to orange comparisons. What I'll say is this much: 95% of the market doesn't know that this packaging is there. Our biggest in India, where Control Print is present, if I look at the world, I think like 99.6% of the world doesn't even know there's a packaging like this available. Our first target is to improve our marketing, to improve our reach. At the same time, we've not been over aggressive because, like I said, we need to develop some things still. At the same time, we also want to make sure that everything is in us, all processes are smooth before we try to really increase operations beyond the point because there were certain development projects going on which are coming to an end and certain new developments to continuously increase the scope of what we're doing right now. That's continuing. We are trying to make the customer aware about the existence of such kinds of products and basically convince them that this provides a better packaging than what they are using right now. You have an entirely new product is what you're trying to say. Absolutely. It's a different type of packaging, so you can't compare it. It's like comparing a Tetra Pak to a, you know, HDPE bottle, you know, for packing milk. Tetra Pak is a different type of package. It's not a pouch, it's not an HDPE bottle, it's something new. We've made a different type of product than what is, you know, so there's no indirect analog in the market. Of course, we're all competing for the same business, which is the single dose packaging business or, you know, single serve. That's sort of where it is. Just one last follow up question. May I request you to rejoin the queue, please? Yeah, sure. Okay, we'll take the next question from [Madhurati]. Please go ahead. Hi sir. Thank you for the opportunity. Sir, I wanted to understand regarding the losses that we expect, sir, we mentioned that on the overall level our track and trace should break even and there should be a INR 17 crore- INR 18 crore loss in our packaging business for FY 2026. Crore losses in the packaging business in FY 2026. Sir, in Q1, if I just consider standalone minus the consolidated, we have taken a INR 13 crore loss. Are we expecting some kind of turnaround or how should we think about the losses going forward for the whole year? There were two aspects to it. There is one thing which is some sort of a foreign exchange gain that the standalone business got and a foreign exchange loss that came in the consolidation. I think Jaideep can give you a better explanation about that. The actual loss in the packaging business abroad was in the region of INR 4 crore- INR 5 crore. We are expecting that in this year by Q3 or Q4 we'll be at a break-even maybe for that packaging business. We're targeting a loss of less than INR 10 crore over the year. Obviously we've had a certain thing, we have sold some machines for various smaller issues. A lot of those machines are not running online because the packing size has changed or something else is there. As we get more machines to start working, the material business in that vertical also increases and that will also start helping us address a lot more of the fixed costs rather than machine sales. Got it. Just a second question on the Codeology and the Markprint business. When I go through their websites, their products are obviously there's a complement to our current product. I'm trying to understand how's the competitive intensity in this business because as I understand there is a lot of Chinese competition in these products because of them being a lower value item than what a printer would be. What would be the addressable market size for these products that we are hoping to launch over the next one year? I think with Markprint and Codeology you are just selling, there's less competition. You know, Markprint is more digital printing technology in line and we're using some of their technologies already in India. That's definitely part of what we're doing in our own business and we're getting some success in our sales on that regard. Their printers would not be selling. I think the cheapest printer would be at least EUR 25,000 or something. They're definitely more expensive than anything we sell. That's why we're not importing their equipment or directly copying their design because it's too expensive for the Indian market. We've just taken elements of their design and incorporated into our own machines. Codeology is more end of line automation so it's more of a solution business. Of course they do print and apply equipment. What we're doing is we're working with building up a coding and marking business out there and also absorbing their print and apply technology in India without really affecting what their core business is and what they're doing and making money and so forth. No, no, please rejoin the queue, please. Sure. We'll take the next question from [Kumar Saurabh]. Please go ahead. Hello. I have two questions. My first question is currently what is our capacity utilization at our manufacturing premises? That is one, is there any. Need of doing CapEx soon? The second question is extension of a previous participant. Ask. year we knocked almost INR 14 crore, INR 15 crore of loss at EBITDA. It's good we are taking these. New initiatives, because that is how growth happens. the next two, three years, this minus INR 15 crore, what is your estimate? I'm not looking for an exact number or anytime soon, but two year, three year, four year, what is our timeline where all these three subsidiaries, what is the kind of contribution should come? If we are not getting desired results, let's say after waiting for two, three years, do we have a plan B on this? These are the two questions. Good question. Like I said, we had given a two-year plan when we bought V-Shapes, which is now CP Italy. We're in the second year. We bought on March 23, March 24, 2024, officially. Honestly, this is the first time we've done something like this. We purchased a company from liquidation. What happened was maybe the timing was optimistic because it just took us six, I mean frankly seven, eight months just to get everything running normally. Some of what happened was they already had an existing base of customers. To be honest, they had some working printers in the markets. We were expecting material sales from the existing customers, but because the liquidation process and the bankruptcy process dragged on for a year and a half, those customers couldn't run their machines because the material supplies were irregular and support was irregular in that entire period for that two-year period. What happened was a lot of those customers went back to their older style of packaging and they were unhappy, of course, for good reason because obviously if you bought a machine and you did all this, maybe we thought that those customers would come back to us and we'd use that, but that actually didn't happen. It was a bit of a negative, to be honest. Maybe, you know. I think, yeah, instead of, like I said, expecting by Q3 or Q4 to be at break-even in this business across India and Italy, we probably, between the track and trace and the packaging business, spent maybe INR 22 crores-INR 25 crores in terms of losses last year funding it, but it'll come down this year. Track and trace should break even this year or be profitable. I think that definitely next year the packaging business should be profitable, although it's going to take a longer time because we want to continue investing. Right now we have a stale structure in Asia Pacific and in Europe. We don't have to keep in all regions of Asia; also we're not there. We're going to keep expanding that. In terms of capacity utilization, I think that was the second question. In the coding and marking business, I think we can go from about INR 400 crores or what we're doing right now to at least INR 600 crores without adding any types of CapEx or any significant manpower. I think we have that much in what we have right now in terms of CapEx. There may be, you know, because we are working on the recyclable material for the packaging business, we may almost have more of an R&D expense. We might buy, you know, INR 10 to 15 crore of some, you know, pilot or type of equipment for, like, lab. Our lab lines, because we need to do testing. It's very slow to get it done outside. We might try to speed up that process so that the recyclable material, which is lower cost, can be produced faster. Sure. Thanks a lot and wish you all. the best, and I'll come back in the queue. I have a few more questions. Thank you, Kumar. We'll take the next question from [Hardik Bohra]. Please go ahead. Thank you for the opportunity. I just got a hypothetical question. In the standalone coding and printing business, is it possible for any one player to, you know, garner about 40%- 50% market share in the long run, and is it economically, you know, viable to vie for that additional market share? I mean, I think that everyone would love to have 40%, 50% market share. The thing is, obviously theoretically there's no reason why it's not possible. It is there in smaller countries; you'll see a lot of times just a single player who might have 50%, 60% market share and then a few smaller other competitors. In certain countries it's more of a duopoly rather than an oligopoly of four people or something. It is there and it is very much possible. Once the market shares settle, which is sort of what the situation is, it's a bit of a dog fight to keep changing that. We are gaining a little bit of market share, but we're not, obviously I would like to be faster, but you know, it's the easiest, most profitable business because we already have a base, we have an engine, everything is best for us. I mean, I don't know why the customers would want to consolidate to one supplier in a major way. I'm trying to think of it from another angle, like, as a supplier I would like it to be that person. I don't know why the customers would feel like, oh, I don't want to do business with Domino now I want to do business with Control Print and increase my wallet share with them. Not sure here about that. I don't think it's going to change that fast if you personally ask me. That is why we strategy to focus on the larger customers and maybe potentially cross sell to them something else that might be of value to them. That's the strategy it seems that we have been taking for the last couple of years. The strategy for that was slightly different in that, you know, we were finding it's difficult to now manage so many people, and there's a certain cost of people. What's happening with smaller customers in India is that the amount of business we get per printer in terms of inks and other things is significantly lower than what we get from a larger customer. At the same time, those customers are more price sensitive. The large customers are more focused on reliability, on technical performance, on uptime, on service support, and having a high level of sales in terms of technical skill and being able to consult them through the entire process so they understand what are the best technologies in the world, what are the best things for their specific lines. The smaller customers are more interested in a cheaper supplier. In the end, that's not where our USP is. We are more, more expensive. More on the high end, more expensive. Okay, thank you. Thank you, Shiva, always for the elaborate answers. Thank you. All the best. More high performance, not more expensive. More high performance. Okay, we're more high performance. Thank you. We'll take the next question from Dhruv Achrekar. Please go ahead. Good afternoon. Am I audible? Yes, Dhruv, y Yeah. My question is what have been the key growth drivers across the international subsidiaries such as Markprint Netherlands, Codeology Group from U.K., and CP Italy over the past years? I think the three very different businesses. Markprint was an acquisition for us to get into the digital printing space, and you know, for us. They're doing well, they're growing also, about EUR 2 million or whatever, and they're selling more machines. The ink business out there is growing. We valued on a multiple of the ink business margin that we're getting. That's the way we looked at it. Codeology is more of an end of line automation provider, and we wanted to get in that space because we felt that we wanted their print and apply business because you want to add that product line into what we do. Okay. My next question will be how are the recent acquisitions, including the V-Shapes, CP Italy, and Codeology, contributing to the group consolidated revenue and profitability? What profitability? What do you say? Am I audible? Yeah, yeah, please tell me. Yeah, my next question was, how are the recent acquisitions, including V-Shapes, SRL, and Codeology, contributing to the group consolidated revenues and profitability? Yeah, that's what I'm saying. Marketing is about EUR 2 million. They're profitable, you know, so is Codeology. I think they're like GBP 1.23 million. I don't know how much are they, Jaideep, GBP 1.3 million or something. They're also profitable. I think, yeah, we're making some large losses because we are investing in the packaging business. I'm not sure of the turnovers offhand, but if you just take a basic difference between the consolidated and the standalone, most of it is the international businesses. Approximately. Yeah, correct. Okay. Yeah. If you want some more specific numbers. You know, definitely Jaideep is here. She's going to just tell you right now. Hold on. Yeah, so, Dhruv, for the Codeology Group, the total group turnover was about GBP 283,000. We had a small profit, about GBP 13,000 profit. Korea, Markprint BV. The revenue for the Q1 was about EUR 413,000 and there's a profit of about 20% on the net profit level. Can you. Sorry. Can you tell me again about the marketing, please? EUR 413,000. Okay, thank you. There's a profit of 20% in marketing, and CP Italy, we've done a loss of EUR 384,000 in Q1. Okay, thank you. Thank you, Dhruv. Thank you for your answers. Yes, we'll take the next question from Keval Shah. Please go ahead. Hello? Yeah, good afternoon. Am I audible? Yes. Yeah, yeah. Thank you for the opportunity. Firstly, I wanted to understand the V-Shapes part. There are two sub businesses. One is selling machines and one is selling materials. I want to understand that in while selling machines, are we profitable in that. Along with that, on the materials side, I believe last con call you had mentioned that once you sell 60- 70 smaller machines, after that you would turn break-even in the material side. Plus, of course, you are trying to get into cheaper materials business, also the renewable side. Will you reach that kind of, you know, installed base or something? Will you break even on the material side as well by the end of this financial year or how do you say, when you break even with, on the V-Shapes, will it be on the machine side or material side or both? That is my question number one. Yeah, so we are making a profit in both. The profit is higher in the machines in this business, the profit is higher in the machines and the materials. In terms of the machines, we've got, we sold two large machines here, maybe two in Europe and about four smaller machines totally. Only a couple of them are fully active. We're struggling a little bit with all the niggling issues and the print issues and just some small stuff. Hopefully, we expected that stuff will start about three, four months ago. Because of certain niggling issues, some of the machines, our supplies are delayed. We've been, like one machine was supposed to be installed in May, it's not even reached India as yet and stuff like that. We're struggling a little bit with the whole logistics and the final installation. It's a new challenge for Control Print Ltd also because we're normally used to selling machines and getting in and out. The engineer goes, he puts a machine in, it's more standardized, we get out in two days, we're done. It's a new game for us also. The machines are more profitable than the, for us right now, the focus of the materials is to get the cost down and get the recyclable structure, which is especially important in Europe and America. Just to confirm, you said that even on the material side you are profitable with the higher cost material that you have right now. If you find a solution of a lower cost material, then the profitability for the increase on the materials business, is that correct? No. The higher cost material, when it goes to the customers costing about INR 2 a pack, the margins aren't particularly high because we're importing it from Europe, and there is a certain amount of wastage. The Italians do make money on the material because they sell it at a higher price than us. What I said is that we want to get the material cost down to INR 1, which we can do when we manufacture it in house. We are waiting because we're doing an R&D project in terms of a fully recyclable structure, which is also a demand from many customers for a full, like a Homo polymer, fully recyclable structure. We are close on that, but we're not quite there. We just want to get that structure up and running before we really focus on manufacturing it in house. Right now, we continue to purchase everything from Italian, as in Europe. Sure, my second question is on the Middle East side. We're not manufacturing. Anything, whether in secretly or in control, purging it from outside suppliers. Okay? Okay, sure. Thank you. Second question is on the Middle East part. You have set up a subsidiary there. What's your thought process on the Middle East market? How big could be the market over there and from when do you see the sales starting, etc.? Some thought color on that front also, please. Thank you. Yeah, so that's not a large subsidiary of ours. It's going to have like a total of three or four people across Asia, Middle East, and Africa. That's all we're envisaging. Focus on that. What's happening is we have a bunch of customers here and we have a bunch of verticals in which we're very strong and we're known for things like steel, cement, things like piping, and so on. We are just focusing on certain sectors where we're already working to try to take advantage of the same myself. Okay, okay. Okay, thank you. At 10:15 A.M., May I request you to rejoin the queue please? Sure, sure. Okay, thank you. We'll take the next question from Deepan Sankara. Please go ahead. Good afternoon everyone and thanks a lot for the opportunity. Firstly, on the standalone business, we have seen 500 bps kind of reduction in gross margins. What is the kind of revenue mix we have during this quarter as compared to year on year? Could you just repeat the last thing I just missed out, Deepan? Yeah. Revenue mix split in terms of printer and the consumables and stationary, these services. Sure. For the Q1 of FY 2025- FY 2026, the breakup between the printers, consumables, spares and the services is 11%, 62%, 12% and 14%. Okay. If you want to compare it to the full financial year of 2024-2025, it was 14%, 66%, 7% and 13%. How was it last year? Lower. The last year lower. In which sense? This is a cyclical thing. We cannot exactly predict. It also depends upon the momentum of our production at the customer's basis. It depends upon how much is produced, so our demand for our consumables increases or decreases. We take year on year numbers for comparison. Okay, thanks a lot. We'll take the next question from Saket Kapoor. Please go ahead. Namaskar sir, and thank you for the opportunity. Sir, am I audible? Yes, yes sir. Just putting, if we consider per slide number 22 wherein we have shown our brief financials for the consolidated part, we have seen our EBITDA declining from INR 20 crore to INR 18.5 crore. If you could just elaborate what are the key factors that has led to the same and I have a couple of points. Firstly, sir, to mention in terms for Jaideep ji, when we are mentioning about the bridge, can I ask. Answer this question, then we just take the next question. Is that fine? Yeah. Yes. Essentially the EBIT, you know that has decreased at a consolidated level. It's mainly because we had certain losses in the packaging business. I think the track and trace in fact this quarter is close to break-even. It was not that last year in Q1 because we had just purchased the company and there were certain reserves and certain other things in stock. We didn't actually lose that much money last Q1 or maybe I think comparatively it was less. Now what's happened like I said is that our coding and marking business was okay performance this quarter. To improve the gross margin of our coding and marking business, which have dropped a couple of percent, we are going for a price increase like I said, starting the first of August so it should start in a few days. Practically speaking we'll not see the difference before like first October so we'll really see the difference in Q3 and Q4. It's also like I said it's many other expenses, certain other material expenses that are increasing as a result of the packaging business scale up. Track and trace has definitely turned around because the fixed costs are now at least to that extent being almost covered by the model business we're doing. That's where the margins are changing. The gross margins of our coding and marking business have not really changed in maybe like 1% or something but not fundamentally changed. Consolidation of different businesses is making this difference. Can you give the number for track and trace contribution for the first quarter in terms of the revenue? We're not going to give it independently, but 10% of the business approximately in the standalone was packaging and track and trace. trace combined And for our consolidation. Right, let me confirm that. I think approximately is about. Yeah, approximately. You mentioned 10% on standalone basis. What would be the number and consolidated? Obviously, consolidated will be higher because then the packaging business from abroad and stuff comes into play. That would be higher than this Markprint digital printing. You know this. It's more difficult to compare. Jaideep, if you have the number, just. You can provide some sake for the CP Italy operations for the Q1. We have incurred a loss of EUR 384,000. In rupee terms, how much will it be? It will be about INR 4.5 crores, INR 4.5 crores-INR 5 crores. One small request to you, Jaideepji. Since we are all dealing in Indian rupees, gaining or losing money in Indian rupee, if we could just translate that number and provide all the sales and the revenue being translated into rupees, that would surprise a lot of questions. Also, in the presentation, if we can provide this breakup of sales for Codeology, Markprint, and CP going ahead, that answers a lot of the questions. The margin profile is also clear, which you are sharing right now during the call. If these can look. Yeah, Your point is noted for the next con call, for the earnings call. We'll definitely look into giving you information in that manner. Also, sir, the breakup of printer consumable players. This is a repeated question from. The problem is, you know that our competitors don't have to give this level of information. Obviously, it makes us unhappy. That's the main issue that's there, you know, like because Domino doesn't have to disclose how much their digital printing business is, their vehicle print, you know, so sometimes maybe they disclose less, but we'll try to give it more. It's not that I don't think it's a competitive issue for us. We would provide that, sir. The listed space, I think as investors and analysts must have an understanding of what narrative you are giving and what path we are gliding. Are they coinciding or not, and what factors will lead to the confluence of the same. Sir, the Q1 numbers somehow have not gone well with the Street. This is very well known with my enterprise value getting eroded over a period of the last two trading sessions. Investors and analysts must have the correct understanding of what the state of affairs are for the existing business and also the future business where we are investing in a continuous manner, and you have already outlined the factors to us that have led to the lower profits. That was my reason why we wanted more understanding on the same because that's going to impact your enterprise value. Sir, Domino's and others are not in the listed space, so they do not have that compulsion on their hands. The second point was that in this quarter we have seen this purchase of stock-in-trade line item also being higher, whether it is standalone or in the consolidated. What explains this nature to Jaideep, sir? Also, the employee benefit cost has also gone up for the first quarter. If you could explain this. The first point was related to the purchase of the stock-in-trade. What we have is that in India, in this standalone thing, we've got a separate division called packaging division which purchases machines from CP Italy and sends it to the local domestic customers in India. That is the reason why, in this quarter, we have sold two machines. The purchase cost was there for these two machines. Saketji, like I said, as of right now we're also purchasing all the materials that we're supplying. It's not only the machines, even the materials are purchased directly from our suppliers in Europe. Whatever the packaging business essentially is, mainly a trading business. When we start making the materials out here, then you know that there will be a change and we'll see some more changes out there. Sir, one question. May I request you to please rejoin the queue? Please give me opportunity at the end. Sure. Thank you. I will take the next question from [Manan Shah]. Please go ahead. Hi. Thank you for the opportunity. Sir, you had mentioned earlier that we were focusing on the pharma segment for our track and trace. Any major breakthrough or client addition that you've had over here in the current quarter or in the near future, if you can highlight or give some color on that, that will be very helpful. Yeah. Primarily we are focusing on two major customers right now. We are still rolling out our solution out there. We have a few different cases going on at smaller levels, but we are fully occupied with these two large customers. Of course, in stages only when they sign off, then the billing gets complete and things happen. These are the two, I would say, the two large customers, both in the top 10 easily of India, if not bigger. Once we roll out with these two, then we'll focus on other customers because. Hello, Shiva, I think we lost you. Shiva, can you hear me? You can't hear me? Yes. Yeah. Yes, yes. No, no. I don't know if you guys heard me. I said we have two of the major top 10 customers. We're doing some innovative things with them. Once we install those, we complete that entire installation and it's live and they can see what's in the market. It will then be easier for us to approach other large customers. There are a bunch of small to mid-sized projects going on, but then these two, like say, more company-wide type sales projects that we're working on, and once that's fully online, then definitely will be of a massive benefit to us. There is a lot of technical new things that we're working on, and we're trying to cross each bridge as it comes. It's a good solution, you know, and definitely I'm quite bullish on that. Understood. My next question was on the packaging side. You mentioned that we've sold two machines. I believe they're sold in the domestic market. What are the end industries where we've sold these two machines? Also, we, V-Shapes, recently participated at the CMPL Expo at Jio. Any color or any, how was the response to the expo or any sort of leads that you were able to generate over there? That'll be very helpful, thanks. Okay, so Tushar, to answer your question, we have four machines or five machines we sold in India. I think like two or three are honey, you know, and two are nutraceuticals and one is in cosmetics. Nutraceutical stuff like, you know, not exactly pharmaceutical but more like in, like cough symptom, like those types of guys. Two nutraceuticals, two in honey, and one is actually in the Middle East. It's in Gulf. Two in the Gulf. Two are not in India. One is abroad, three are, four in India. Okay. Two are in honey, one is in cosmetics, and two are in nutraceuticals. The second part you asked about the CMPLC. It was a very good response actually. Even elsewhere we've been having good response. What's happening is that one of the things we have invested in the last year or so is to set up co-packaging facility for cosmetics in Nalagarh and also a co-packaging facility for food in our Nalagarh factory. Basically, what we're doing is we're getting a lot of inquiries for 20,000, 30,000 pieces. People want to give a sample with the other materials. A couple of lags here and there. More than people purchasing the machine, they want to test the packaging out on the market. Now, the problem, if you're in the packaging industry, you'll understand that printing and making a volume which is quite low is very difficult. We've taken the strategic call recently that we will take those lower volume pieces on more as a marketing cost rather than any great revenue that we're getting for the co-packaging or any benefit. That's probably the situation. It was a positive exhibition from what my knowledge is. I didn't actually attend myself, but this is what I got feedback from the team. Sure, thanks. That was very helpful. We'll take the next question from Tushar Talwara. Please go ahead. Hi. Am I audible? Yes, Tushar, Thank you so much. My question was around actually going back to the pharma side, you know, there's been some literature which has been going around in, you know, pharma magazines and all that. You know, the anti-counterfeiting measures that were put in place by the government, they're not really working out as expected. My question was that, you know, in terms of the two customers that we are working with, are these issues that we are also, they're also looking to solve in the course of, you know, our pilots or whatever we are doing with them. You know, what is your larger perspective on this counterfeiting issue and how it'll pan out for us in the future? This is a very tricky thing for me to answer because I don't know how much, you know, like normally, you know, every customer is assumed, you know, even whether we sign an NDA specifically or not, like it is confidential till they allow us a specific disclosure. Yeah, there are some innovative aspects to it. We have about three or four patents. We have three key patents in our track and trace division and we're utilizing all three in this particular instance and we're combining that with our digital printing technologies. We're really going for a pretty comprehensive solution for the customers. Definitely, I can tell you that in general in the pharmaceutical space, counterfeiting is one of the key issues that's there. We are also working quite aggressively on ensuring that these issues or shortcomings of the current market solutions are addressed. I can't really go beyond that until I get a specific permission from the customers at hand. I can't tell you beyond this. Sure, no problem. The second question I had was regarding a comment that you had made that, you know, right now we are not sourcing the raw materials. We're not. We are just doing trading in the raw materials right now for the packaging division. You'd said that in the future we might, you know, look into doing this in house. With respect to that, I just wanted to understand that when we talk about taking it in house, are we talking about setting up, you know, polymer compounding facilities within our premises, or is it more involved, more complex CapEx than that if and when that was to happen? Right now, like I said, we are still working on, we are going to spend a certain amount of money because we need to finalize this recyclable package. We are making progress, but it's being slow. That's what our initial CapEx is. Also, we can make pilot levels of production, both of the things. We just want to finalize our exact configuration going abroad because that depends on, depending on that, that'll sort of set up what sort of line equipment we are ordering. It is more of a film and sheet extrusion, those types of processes that are there. It's not super complex, but it will require an expansion of the facility or a separate area because the amount of material that's flowing through in that type of a business would surely be higher than what we do in our inks and whatever other stuff it is. Guwahati is frankly also a little bit logistically difficult to manage the entire country from there for this type of material. Plus, we'll be re-exporting from here to all the other machines that we sold all over the world. Obviously, then it's not only we're manufacturing for it. We're manufacturing for all of Control Print s ervices machines everywhere in the world. I mean, again, it's a bit futuristic. We've not finished our development aspect and at the same time, most importantly, we have some plans in mind and obviously we are working on certain things, but as you know, like I said, we also want to make sure that the volume is at least enough to. The first target is to get the pilot stuff done, develop all this stuff and at the same time, cut down the losses and increase the sales pace so that we're not just investing and investing and investing and then not being able to even utilize the capacity at a fraction. That's obviously something that is there. Right now our focus is more on investing more on the sales network. Our margins are higher in the machine and in the short to medium term, that's actually going to drive our business more than the materials. We can always manufacture the materials and increase our margins whenever we want, whenever we are ready for that. All right, that's all from my side. Thank you so much, Tushar. We'll take the next question from Devanshu. Please go ahead. Yeah, hello, sir, good afternoon. Can you hear me? Yes, Devansh. Yeah. Two questions. Just the first question. Can you talk a bit about the people running or heading the new businesses that we have? Are the people from in house, are they external hires? Can you talk a little bit about their background? I'm specifically more interested in the larger new companies that we have taken on, so packaging and track and trace specifically. When it comes to recruitment requirements, are we done with that or are we still hiring people? When will the employee cost stabilize in that sense? Okay, so I'm just going to answer both the questions. For the track and trace business, it is actually being run by a doctor, like an M.D. type of a doctor. He is someone we recruited because he was interested in this space and they had started something. It was more of an acquisition where we actually let go of our own development and we felt their product was better. The person on the technical side is more of a blockchain specialist and of course there's the rest of the technical team in there. That's also one of the reasons why the employee costs have increased because, you know, a lot of these people, expensive people and so on, as compared to maybe more standard types of sales and service engineers that we have in the core coding and marking business. CP Italy is still run by Christian Buratini and he's a founder. He was a founder of V-Shapes and also the creator of this technology. He's an inventor himself and he's on the key patents of V-Shapes and he's also running the business overall. We're trying to supplement that with more managerial experience. The person who's running the packaging business in India is ex-head of Flex Engineering. U Flex had a sort of engineering division with the [McPacking] machine. He was a former head of sales for Flex Engineering. Markprint is being run by its founder, also been in the business, and he was working previously at Markem-Imaje for many years, maybe 15 years or something before he started Markprint. In terms of employee hires, there was some cost there. We don't need people much right now. In fact, we're trying to focus on managing the amount of people we need. There has been some staff because in the packaging there has been a scale out. We have got some people who are working abroad, various geographies and certain things like that. It's interesting we've added some more people in Italy so we might need like four or five more sales people only across the packaging and track and trace sectors. Overall, I don't see the head count increasing now. Maybe three, four people if we actually, maybe three, four people to manufacture these pilot materials that we are working on. I don't see a major increase in people for sure. I think we've put on a lot of those employees that are there. There might be some changes up and down. Obviously, the division becomes profitable. Some of these guys have, you know, performance bonuses and profit sharing things in their own division and stuff like that. That might increase, but the fixed cost should not go up long much. Just a follow-up on this. INR 100 crore employee cost annual run rate is good for now to assume. Consolidated. I don't think it's going to be that much in the first quarter, but I don't think it should remain that much. We can get back to even more details on that. There is a certain employee cost abroad, so I think it would remain the same. Jaideep. I mean, I don't know how much of it is fixed, but I think it could be it won't be more than that. Sure, sure. Devan, please request you to rejoin the queue. We'll take the next question from Disha Sheikh. Please go ahead, Disha. We'll take the follow-up question from [Kumar Saurabh]. Please go ahead. Yeah, my question is on the. consumable side, are there other companies which can provide consumables for our printers or vice versa, or how does it work? Our printers, only our consumables? How does it work? We have a protection on our printers with our RFID technology. In general, you can't really use someone else's ink on our printers, and neither do we provide our inks for use on other people's printers. Okay. One more question and more observations. I think we have a very good business and we do get a lot of free cash flows. Some of those investments are there in the equity side as direct equity or mutual fund kind of product. Do we have some kind of formal fund management team or some professional team which is handling it? I think what we discussed was it's reduced and we are liquidating most of it. I think, you know, maybe we can discuss it post the September 30 results. I think the balance sheet will be published. Sure. Thank you. Thank you, Kumar. We'll take the next question from Disha. Disha, please go ahead. Afternoon, sir. We wanted to ask that the GST benefit on a plant would be going when, and what will be the impact? Yeah, it's gone as of 26th of May. The Guwahati benefit is over. I think it was close to INR 10 million, 12 million a year, if I'm correct. Yeah. That is a thing that's there already. We could see about INR 1.5 crore of impact on Q1. That was already there. Okay, great. Thank you, sir. Maybe INR 1.5, 2 crore in Q1. Thanks. Okay. Sir, in this track and trace in our coding and marking, according to your printers, how much consistent growth can we expect for the coming three to four years? Because we have already sold a lot of printers in the last two years. Are you talking about track and trace? You're talking about coding? Coding. Coding. Coding. Yeah, I think we are continuing to grow. I think our overall target is to continue growing the coding and marking business. Whatever growth we're doing in the past, something similar, like maybe 14%, 15%. I think that's our target to keep growing at that rate for the next two, three years at least, and keep seeing what happens. The market is okay. In terms of track and trace, hello. These two projects, you know, we see what the market reaction is. I'm going to give you a better picture post that. Great. Thank you so much, sir. Thank you, Disha. We'll take the next question from Rahil. Please go ahead. ust to, you know, round it up with the last question. Like any consolidated growth guidance you'd like to give on revenue front and EBITDA margins. I didn't really get that. Can you just repeat that question, please? I would like to ask if you can provide a certain consolidated level guidance in terms of revenue and EBITDA margins for this year and next. We don't have any guidance, but like I said, overall some of the variation, like I think the coding and marking business is steady. Some of the variations are caused by investments, especially the packaging business too. Both abroad and in India, in Asia, and to some extent in previous years, the track and trace increase should be break-even or profitable this year. I think as the other businesses get in line, things would definitely improve. Right now it could be valued as two separate businesses. One is a business which is the coding and marking business in India, which is our core business. Then everything else is a growth initiative, and maybe it'll just take a few more days, a couple more, few more quarters, and you'll see as it scales up how things are running on that channel. Okay, thank you. Thank you. Rahel. Sir, we'll take the last question from Ashok Shah. Please go ahead. We'll take the last question from Keval Shah. Keval, please go ahead. Yeah. Thank you for the opportunity again. I understand you are not giving any forward guidance. Is it fair to say that worst for the margins is over as of Q1, FY 2026, that is one. The INR 1,015 crores of R&D lab expense that you're planning to do for your V-Shapes business, will it be in entirety of it in FY 2026 and it will be expensed out in this year itself? There would be an additional expense of this INR 1,015 crores that can we expect in this year. These are my two questions. Thank you. Regarding the second question, whatever R&D we do, which is more based on people, prototypes and stuff, expense it all. If there's specific equipment or tooling we purchase, then I think legally we're obliged to capitalize it and then write it off. Jaydeep, if you just want to give that idea and then in terms of the margin or the EBITDA part, like I said, we believe that obviously we've taken a certain amount of losses and the next few quarters are going to be better. Things are going to improve. If you control the losses in other businesses, then automatically things should improve. Like I said, we're also going for some price increase. We are expecting better. I'm not going to say anything, I'd rather say let's wait three quarters and everyone finds out what's going to happen. Specifically, as far as the, that's why I mentioned, because someone mentioned CapEx. It can be used for production. It is a type of CapEx, and you can do production with it at a small to mid size level. That's sort of what we're thinking. I would say it's like a combination of CapEx and R&D. We are doing it for the R&D, but it will also be used for some certain levels of production. Okay, thank you sir. Since that was the last question for this earnings call, sir, would you like to give any closing comments? Mr. Shiva. I just want to thank everyone for taking the time out. I value everyone's participation and feedback. I think that, to be honest, the Q1 results were disappointing for a lot of people and it's the same for us also. This is a continuing process and we know that this change is happening and it's going to take a certain amount of time for it to pull through. We're doing that step by step. I still feel we're on the right path. It's just, yeah, one or two things have been slightly more difficult or longer term than what we had researched, maybe when we went in for a couple of these expansions in terms of business. Thank you very much. Thank you, everybody. Thank you. Thank you. Thank you very much. This brings us to the end of this conference call. You may please log off now. Thank you.