Hi. Good afternoon, everybody.

My name is Jaideep Barve, and I'm the Chief Financial Officer of Control Print Limited. Welcome all of you to the earnings conference call for the fourth quarter of the financial year 25-26.

We appreciate that you've taken out time from your busy schedule to attend this call. Thanks for joining this call.

Mr. Shiva Kabra, the Joint Managing Director of Control Print Limited, 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. Just for information, 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 CPL for the period ended 31st of March 2026. Revenues: On a consolidated basis, the total revenue is ₹484 crores in FY 25-26.

The figure for the corresponding previous year was ₹431 crores. Out of this, the operating revenue is ₹482 crores in 25-26, which was ₹425 crores in 24-25.

On a stand-alone basis, the total revenue in the fourth quarter is approximately ₹138 crores, which is a good growth from ₹114 crores of the Q4 of the previous year. For information, the total revenue for FY 25-26 and the previous three years is ₹460 crores, ₹395 crores, ₹347 crores, and ₹295 crores.

Regarding operating revenue on a stand-alone basis, it is ₹446 crores for the complete year of 25-26. This was ₹385 crores in last year.

Coding and marking continues to be the main and the most significant profit center of the stand-alone company. It has seen a steady growth in the business.

Pipes, food, dairy, cable and wire, FMCG, steel, and metal and wood are our top-performing business verticals. We continue to be the market leaders in cement, plywood, sugar, and dairy.

The business outlook remains good for the Track & Trace division. We've developed new solutions, and acquisition of new customers is another plus point for us.

We are getting good traction in the co-packing activities in the packaging division. A pipeline is being generated for the laminates, co-packing, and the new machines.

Management of this division is now strictly controlled, and operations are tightly measured. The mask plant has now been operating as a PPE and safety division, and along with masks, we are also engaged in the trading of hard hats, suits, helmets, gloves, jackets, and shoes.

Expenses: On a consolidated basis, the cost of goods sold is around 40% of the operating revenue, which was 42% in the last year. Employee costs remain high, which is 23% in FY 25-26, which was 21% in the previous year.

Other expenses are around 16% for the current year and previous year. On a stand-alone basis, the cost of goods sold is around 41% of the operating revenue.

This was 42% of the operating revenue for FY 24-25. Manufacturing costs continue to remain at 3% of the operating revenue.

The employee costs are 19% in FY 25-26. This was 18% in the last year.

Depreciation and other expenses are in line with the previous periods and in line with the business activities of the company. That said, management remains committed to optimize all the costs and would look closely into the economy, efficiency, and effectiveness of operations.

This, we feel, can definitely lead to reduction in the operating costs. The way forward: We would like to consolidate the coding and marking business by increasing the installed base, provide robust solutions.

Just for information, we have implemented a price increase. Reduction in the input costs and overheads also is being prioritized.

We would be developing new solutions and capitalize the available market opportunities in the Track & Trace segment. With respect to the packaging business, both in India and overseas, we are looking forward to increasing revenue in printer sales, the co-packing, and laminates.

Overseas subsidiaries will continue to be monitored with focus [due to?] targets.

Business plans have already been mandated for execution. We now leave the floor open for any questions.

We will be happy to address them.

Mr. Kabra, thank you very much for this opportunity.

I am very concerned by the losses that our international acquisitions are doing, and the losses seem to be ballooning with every passing quarter. Now we have seen this story before of Indian companies doing vanity acquisitions in saturated Western markets, and then continuously pumping money, making losses, and then ultimately just writing off the whole thing.

Is there a different story over here, or we are following the same predictable pattern that we have seen many times in the past before?

Keshav, this is Shiva. Thank you for taking part in the conference and for your question.

I think that would be a concern for many other people also. You see, the thing is, I think, this is a fundamental question for me as a manager and for the shareholders also, or investors, however you want to call it.

You see, there are two routes out here. We are in a comfortable position in our coding and marking.

When I look at the results, our profitability has increased on a stand-alone basis fueled by the coding and marking business. Even though we have made investments in both the IP sports, which actually probably was at least break-even this year, I would say, if not at a profit, but it was definitely at least break-even this year, we didn't probably spend money developing that business, but we didn't make losses in the packaging business in India.

Now the question is whether we want to be a TCS or Infosys type business. I'm not trying to say they are great companies or something, but in the end, they've been making a lot of money and running a comfortable business model for 30, 35 years.

They haven't reinvested in creating IP. There are no products that they have per se.

They're not leading in say the AI or something. They've not created any Zoho or SaaS-type products.

They've not competed with anyone or done anything like that. The question for us is that there are certain types of companies and business models which are going in a certain direction.

We've felt that our coding and marking business has a certain limit because the total business in India is still about somewhere between ₹2,000, ₹2,200 crores was our last calculation when we added fall of ours plus presumed something for all the other parts of the market. Now if that's going to grow at what, 10% then 10 to 11% something, take 10% on average, then the options for us are limited, although this is a very comfortable, highly profitable business.

We believe that we have the type of skills, we have the type of thing, and we've been investing aggressively in developing our own technology. We were licensing many things earlier, we were a distributor first, then we were manufacturing, and under license, we developed a lot of our own products and technologies in the last few years.

Just so you understand, the losses that you're talking about are almost entirely in the packaging division abroad. It's not in Markprint or Codeology, which are more allied with our current business.

The main losses that we are having are fundamentally linked to the packaging business. Now that's a business that I would say, it's something that Control Print is not really doing that directly here in terms of packaging machines and packaging materials, right?

We are supplying a different set of equipment in the packaging lines. The fundamental call out here was to invest in some technology which we feel has a differentiating factor.

The investment cycle has gone a bit longer than what we expected. That's also because it's taking more time.

Obviously, it has taken more time to stabilize the machines, as compared to what we expected in the beginning. The machine is actually stable, but in some types of material development in terms of certain other aspects that are there in those markets.

Like I said, in the end, when we've done this acquisition or we've invested in this, we feel that the scope of this business is significantly bigger than that of our coding and marking business. We need to invest and have patience.

We've gone down a certain route where we have said that we are comfortable building up our IP stack, and that's what our company wants to do. That's what we believe is necessary for the long-term health of our company, when we're talking over a decade-long period.

I understand that, as an investor, as a shareholder, and even as a manager, I've asked these questions to our board, which these questions were raised also yesterday, and it has been raised before other meetings that the rate abroad sort of it makes the results out here look very diluted, and it's not that good. The thing is, it's a conscious path we've taken.

We've got a bunch of key patents, not only like I said in our coding and marking business, which we've created over the last few years, we've done a lot of investment in R&D out there also. I'm coming from a different angle, where I've been paying license fees and royalties, and someone calculated I've been paying ₹7, ₹8, ₹9 crores a year, ₹10 crores, maybe, whatever it is.

We've been paying it for the last 10, 15, 20 years. Then we are coming from the angle that we want to lead this new thing and get into new areas where we are the ones who are owning highly differentiated IP and building platforms on that.

It's a very different type of a situation. This change has been happening for a decade.

We need to focus on our coding and marking business only, nobody questioned it earlier. Now we are also getting more, like I said, into digital printing, into Track & Trace, and in pharmaceuticals.

We're combining a lot of those technologies, and now we go to the packaging industry also on that similar platform. Like I said, if someone is asking me, right I was just at Interpack for about eight seven to eight days or something in Germany.

I think there was a lot of strong interest in our product and our platform. It's something that definitely I'm still very sure of the end-use case.

Everyone has to understand that when you're going down a certain route, we have to load a certain amount of risk and some sacrifice of certain short-term results, which we're trying to manage to the best extent possible in order to ensure that the company has multiple levers of growth, and a strong platform over, I think, the next decade or two. That's sort of where the situation is.

I don't know if this is answering your question in complete. There's no vanity here.

We're not taking on certain things. It's a very calculated decision.

Wherever we have invested, it is to take certain types of intellectual property where either we had some holes in our portfolio and we want to ramp it up in terms of Codeology, the print and apply, in terms of Markprint to the digital printing, it also fills some geographical options for us maybe in the future, and in the packaging business, again, it's an IP platform that we've bought, which we really believe we can develop to be a significantly bigger business and a more profitable business than our coding business in course of time to come.

Mr. Kabra, I appreciate your answer, and I do understand that until we attempt to do new things, the company cannot grow.

There has to be some endgame that, okay, we are trying to do this, and if we are unable to do this in a certain time period, at a certain cost, with a certain capital outlay, then we will basically write it off, and it will not be an open-ended that after three years also we are discussing the same thing. I think we are again putting ₹32 crores in the Italian subsidiary, whether through IPR purchase or equity infusion.

It's basically the same thing, that we are putting ₹32 crore additional capital. Basically, how much money did we put to acquire this packaging business?

What has been the additional investment since acquiring it? What has been the cumulative loss?

The basic point is that are we realistically going to get in the foreseeable future any return on all this investment that has been incurred till now, and by when?

Yeah. Keshav, again like I said is that this is not an open-ended type of investment.

Obviously, in the end, we've got a certain bunch of milestones, and the first thing is to have a very stable product platform, which has taken slightly longer than what we expected because what happened is since we bought the company from liquidation, there's a lot more damage to their technical and quality and many other aspects that were there than what we expected. The IP what we're doing is not a method of fund infusion.

I will actually retract on saying that we in any case have certain things that we've extended are not really in terms of the equity into what we've done. Or some part will be used to retain ourselves.

This is to formalize the fact that all the IP is now belonging to Control Print, not to Control Print Italy. We are also potentially going to be licensing this technology to other people.

Okay. One of the options we're also looking at is to whether to make it a platform and whether we want to do everything ourselves, or whether we want to make it a platform and even license it to other people.

We can do both types of things in the Tetra Pak model, right? We can also license it to other people in certain geographies, or we can make everything ourselves.

There are multiple options ahead of us. For that, we wanted this to lie with Control Print itself and not in the main Control Print or at Control Print India.

That's the situation that's there. I can assure you these questions are asked of us, obviously.

Like I said, our board is also very conscious. Mr.

Kabra is very conscious of what is happening. He has a lot of questions to ask also.

I can assure you that we are making significant progress, and it may or may not show up in the results at the time period that everyone expects, including me. I understand, and I've kind of done this to other platforms that we've done before.

Now we're doing it to three other options, like with Track & Trace. Now you can see the sort of results showing up out there.

We can see the same thing here. Again, we've gone for a highly differentiated approach.

If we go for a less differentiated approach, and don't keep building out the platform, it's going to obviously probably give us a faster return. Like I said, the idea is to get something which can really take the company to the next level.

I think that's sort of where the thought is, yeah.

Sure, sir. Thank you very much.

I appreciate your answer, and I hope the company succeeds in our endeavors. Thank you.

Thanks.

For the opportunity. Sir, I wanted to understand regarding this sharp increase in our employee benefit expenses on a stand-alone basis, because it seems that the investments in the Track & Trace had been done, what is this increase related to?

I cannot hear you clearly. Could you repeat everything, please, Madhur?

Yes, sir. Sir, I wanted to understand the increase in employee benefit expenses during the quarter from 20 20 to 21 crores to 27, 28 crores.

Why is this? From my understanding, all the investments in Track & Trace have been done, and the employee expenses were going to stabilize at those earlier levels.

What has led to this increase?

I'll take the second part of the question first. As far as Track & Trace goes, we're continuing to invest.

We have a team there. We continue to develop new products and IP, there is an ongoing commitment and an investment.

Now we're making enough revenue that it is break-even, maybe even profitable. I can't disclose those exact numbers, but from whatever we are seeing, it's either going to be at least break-even, if not profitable.

It will be a contributor, or at worst, neutral for the company. Now the second part, which is the employee expenses, Jaideep is going to ask this question.

Yeah. If you look at the numbers, you would feel that the amount has increased.

On a granular approach, what we've analyzed that, since November '25, the new wage code has come into being. As a result, we had to recast the liability on account of leave encashment and the gratuity.

Major chunk of what I say is because we've implemented the new wage code, and the hit has been there in the P&L account. Along with that, we've also done some good amount of provision for the sales and service people incentives, and also some loyalty bonuses for key management people.

The last two are basically in terms of keeping the business ahead and having right people. The first impact more or less about ₹3.5 crores was because of that leave encashment and the gratuity impactments.

Got it. Sir, our stand-alone business has done a decent growth during this quarter.

What has led to this growth? How much was the price hike that we took during the quarter, and how much is from the demand that has come up?

Sir, post GST, how is the demand for the coding and marking equipment in India? Has it picked up, or how is it, if you could help us understand?

Yeah. We can't give you percentage numbers in terms of price hikes, but we have implemented a surcharge.

I think previous year, there was a price hike, but the major growth has come from the volume. This year, what's happened is we've actually had some cost increases, some major issues happening with the whatever, Iran thing or something, some chemical supply chains because the gas and some other things are being allowed for petrol and fertilizers and all, but for some reason, they've stopped the chemicals chain.

There's some cost increases for sure on our side, and some force majeures have been declared here and there. Obviously, it's not as bad as COVID by any stretch of the imagination, but we are keeping our stocks ready.

We have had some significant cost increases. Also, the rupee depreciation has affected us, but we've not even calculated that as yet.

We have taken a surcharge from our customers to counteract at least whatever cost increases we're going to incur due to whatever this conflict and whenever it ends, God knows. It's going to take a few months for the market to normalize even if the conflict ends tomorrow, is sort of what we feel.

I think the surcharge will be in place till the end of the year. There was a couple of other questions in there, which I think Jaideep will address.

No, you addressed it fully, and he just wanted to know that how are we feeling in the coding and marking here.

Okay. Fair.

Fair. Most of the growth last year was volume.

Some small part is a cost increase. This year, there is a surcharge, but it's merely to cover the additional cost that we've already incurred or are incurring on account of the depreciation and the whatever this Iran thing.

I don't think it's going to necessarily add to our bottom line, but it will prevent it from getting affected.

Yeah.

Sir, on the demand from the FMCG segment post the GST changes?

madhur, we can't hear you properly.

Sir, the demand from the FMCG market post the GST rate reductions for the coding and marking equipment?

It's difficult for us to say. It's been quite stable last year and this year, it's difficult for us to say.

Normally, the packaging sector, just pharmaceutical, beverage, food, and personal care, home care, FMCG, whatever you call it, is stable. We see more ups and downs in the industrials, which is cable and wire, pipe, steel, wood.

Those are the ones which fluctuate more. Because a lot of them are linked to home construction and white goods, and those types of things.

The packaging side of the business is quite stable, people will consume milk, come what may, whether GST is less or more, it's 11. I think, but I'm not sure.

Got it. Okay.

Thank you so

much.

Yeah. Hi, sir.

Thank you for giving me the opportunity, sir. I had a couple of questions.

If you could give me the revenue breakup by consumable spares and

I'll take this question. For the Q4, I'll talk first.

Between printers, consumables, spares, and services, it is 12%, 62%, 9%, and 16%. If I take the complete year of 25-26, it is 14% for the printers, 61% for the consumables, 9% for the spares, and 15% for the services.

Could you just also

since already my question has been answered, I wanted to know about the Codeology and other investments, especially V-Shapes, because we've been bleeding money for it, and as you mentioned, we don't have a timeline when we will have at least a break-even point for it. Could you explain the Indian business as well?

What do you think about the Indian business as of right now? When

you mean the Indian business, you talk about the packaging side of the business, or you're talking about which part of the business?

The coding and marking business.

That's going steadily. I I think like that's steady so far.

Last quarter last year was good, but this year should be also reasonably good. Like I said, we're expecting the Track & Trace to be a major part, I like a big one of the things that we add to sales, hopefully profitability this year.

Hopefully, we

develop to some extent this year, it's stabilized, where we can then have a base on which we can grow.

Could you expand more on the Track & Trace business? What revenues or what is the highlight in next 2, 3 years?

What do you think the potential of the business could be?

That's difficult to say. There are other people in it.

We are a very late entrant to the market, relatively speaking. We're trying to offer something which is a very differentiated solution.

It's quite technical. If someone will have to take the time out to understand what our solution is and how it compares to whatever's the state of the art from other people as of today.

I can assure that any leading pharmaceutical or other similar company will find a significant order of benefit coming to us. I had mentioned that we are doing some pilots with two of the top five to 10 in size pharmaceutical companies in India.

We're coming to the end of those, and if everything goes as what we think, it's successful, then we should get a bigger rollout in these companies. That will also have a market proof to the rest of the companies, all other rest of the customers.

That's sort of where our focus is. It's not really been on rushing to try to sell to everyone.

It's more been going to depth and really working closely with two pilot customers of large scope, complex requirements, probably the most complex requirements from all companies in India, and making sure that we are giving that level of solution to them, that they feel there's a huge delta, and it's a no-brainer for them to switch from the existing solutions to us. It's more about proving that proof of concept in eight two apex customers, and we feel that it'll have its own self-explanatory effect down the line to all the other customers.

Just a last comment on V-Shapes. What do you think about when can we reach a break-even point or what scale and what factors could it lead to reaching a break-even point?

Just a general commentary on that part.

Yeah. It could be this year also.

What happened was we had predicted about a €1 million-something loss, a reduction from about €1.5 million last year to about €1.5 million this year. What's happened is that because of some difficulties, some design changes or some stuff that we've made, we've got a bunch of inventory there which still needs to go out to customers.

We've not been able to build that. I think if that happens, hopefully the losses could reduce.

The revenue may start. We have a couple of big customers in the Gulf in Middle East who are not now purchasing materials because we can't ship them the materials.

The ways in the Gulf in the Strait of Hormuz area, and we don't know how to get past this. That's affected us to some extent.

I think yeah, it could easily break even this year. To respect that, I'm quite confident that the losses will reduce this year.

From at least after FY '28, we will not be bleeding more money towards V-Shapes. Would that be a general consensus?

I don't think that we need to put more funds in after this, since we purchased the technology and shifted it to India. I think this would be the last.

Someone said part of it is to feed some loans that we have provided to get them back. That's going to be part of it.

Most of the funds are not going to be infused there. I think there's not much more funds requirement from their side if we believe as possible that the current inventory that they have is finalized, and they can ship it out because all the changes have been agreed upon.

We've made some minor changes to the product. What's happened is that the products are still somewhat stuck in their factory.

Yes.

If those machines can go out, then we can convert them into revenue and get some money in. Obviously, we already see part of it as an advance.

Part of it will come in. The inventory can convert into cash, and it will also lead the way to recurring revenue.

Some improvements that can happen in terms of the manufacturing out there. I think we're close to saying that now this is the final change.

Because, this again, I don't want to be critical of our own company, it's a new thing, cuz we are in a very different way. When you sort of buy certain machines from certain sweet Italian companies of a certain size, that each machine is slightly different than the last, you know?

Then it becomes impossible for an engineer to go there and understand which machine is what. There are no major changes, but they're minor changes from each machine to each machine.

Our take is that this can't happen. It has to be finalized.

If it goes to the customer, you should be able to install it in 1 day and give the training and get out, and it just runs. You can't be like I'm going to go there and I'm going to fiddle around with it and I'm going to make some changes here and there.

We're putting more of our own quality and customer-level standards out there. Otherwise, they would have shipped out.

That's not acceptable for us. We quite straightforward.

That again, there's nothing negative or positive about it. Maybe people are used to doing business in a certain way.

We don't accept that. They have to comply with our norms, as simple as that.

Sir, have we able to reduce the cost

Yes.

Yeah. Namaskar, Shiva sir, and Jaideep sir.

Hope I'm audible.

Yeah. Namaste.

Namaste.

Yeah. Sir, first of all, a very humble suggestion.

Please do make it into consideration that earlier, sir, post the results, the con-call and the presentation part used to be done on the same day, maybe at the fag end at 5:00 p.m. or sometime around that also.

We have now made it a next day affair. If our team can work on it, and we can host the investor call on the same day, later in the evening if the board meeting permits so, that would suffice and would be very beneficial for the investors and the analyst community.

That's a suggestion from my side if that could be looked into and deliberated on.

Saket ji, we actually preferred that, but then some people said they need time to study the presentation and the results before they can ask us questions. I don't know.

There are different investors with different So I don't

In the paucity of time, I'm not taking it discussion. You have the similar set of investors participating in the call.

The Captify can call us and get the feedback from us, what is the preferable time since we people are participating and we people are investors also in the organization.

Captify should do that on behalf of Control Print.

Please take note of

this. It's on the end of the call for us.

It's actually preferable to do it all in one day. It's much better for us.

Yeah. It is much better for us also, sir.

Okay. I think we got a different feedback, but I'm just telling you, Saket ji, that this was the feedback that we got.

That's why we have changed to give everyone a day to study the results in the presentation before asking us questions. We are more than open to going back to the old style.

I'll leave it to Vinay to get the feedback and

Right. Yes, yes, yes.

Now sir, taking into account the V-Shapes losses, the packaging business losses, can you explain to us, sir, what is the nature of these losses and as you mentioned about some machines not getting delivered because of some changes in the specification. What are the course correction that are expected going ahead if you could just dwell further on the same?

Yeah. Just so that, okay, roughly speaking, about half the V-Shapes expense is in terms of R&D, okay?

The focus has been on shifting the R&D, India's going to do the materials R&D, and V-Shapes will keep developing the machine technology and also extending our patents into other areas. Like for example, we have a part patent for taking our snap technology to powders.

We developed thing where we developed a powder machine, which is not we're far from finalizing and selling, but we've we've taken the patents out on that as a concept. That will extend say till 2044.

What happens is that we are so one part of the thing is to develop the technology to extend our IP. That's about half the cost of running V-Shapes in Italy.

Okay? The other half of the business, what they do is two things, similar to India.

They do contract packaging for customers, and this is more because a lot of customers don't want to buy the machine up front. What they do is they'll pack 100,000 pieces or 50,000 pieces and try it out in the market, and loose things like that.

Then, if everything's successful, will come back to us and then look at purchasing the machine. That's sort of where what they do is a second thing.

Then the main business, of course, is manufacturing the machines. Their sales geography now is limited to Europe, and India is taking care of Asia Pacific and Middle East and Africa, although really our real focus is, I'd say, 90% is India and to some extent the Middle East and Gulf.

It's not really Africa and the rest of Asia is theoretical as of right now. Their costs are obviously in terms of two things.

They've got a sales team out there, and some people in the packaging and manufacturing, production, operation. They've got some part of the cost in the R&D.

I would say like, if the R&D costs of something in the region of like €100,000-plus a month. What so so that's obviously we're expensing the same because, we do the same here.

That theoretically, we would have capitalized it or something. Like because this is our our financial way of doing things, we so that's a big investment that we're making there.

In a way, they've got a similar R&D expenses what Control Print has, like a little bit less than us, but because obviously they don't have the same level of revenue and profitability, they can't expense that without showing losses. That's the one of the major differences there.

The rest of the people are sales people. You've got a CEO who also looks at sales and some of the technical aspects.

You've got a few people for the manufacture some logistics and back office or whatever, and then some people It's a pretty thin team. I think it's like just 12, 13 people, 14 people there totally.

We part of the R&D cost of course not only our people, but also we have some of some consultants that we use and then, certain kits and tools that are known that they keep buying some stuff here and there to check some stuff out. That's sort of where the V-Shapes for the CP Italy costs come from.

Then what are the other questions you had out there, Saket ji?

Sir, I have couple of them. I'll just put forward them and then join the queue.

Firstly, about the new manufacturing unit at Guwahati. Kindly note it, sir, iska kya rational hai and I think so it's the packaging segment itself.

That has some correlation with the IP which we have purchased, I think so, from V-Shapes. Sir, secondly, to endorse or whether to second to the views of Keshav bhai also in the earlier part.

Sir, you have built up this organization and also the confidence in your investors in a journey that has transcended for the last 6, 8 years of consistent performance, delivering your dividends, buybacks. Somehow, it appears to the minds of your investors that we are getting derailed from the objective, and that is very well reflected in the type of P compression that we see currently with respect to our current market cap also.

Sir, although in your presentation, you have spoken about, I think so, slide number eight, it speaks about three pronged long-term growth strategies, and then we have also spoken about a long-term value drivers. We as investors only want things on ground to move in this aspect.

We would like to understand ki as we say in the Hindi terminology, Dilli kitni dur hai abhi? How far are we away from achieving these two slide number seven and slide number eight?

Your thought process of how confident you are in achieving the same. This is what the sum and substance of my question was, and I'll join the queue.

Okay. Just looking at the first question, do you want me to take these now, or take them at the end of the queue?

If anyone else wants, I'll just take them now if they're fine with everyone, or you want to take them at the end?

Keep those two questions there then, and we'll address them after.

Hello. Am I audible, sir?

Yes, Saloni.

Yeah. Sir, I joined a bit late, I don't know if my questions are repetitive.

I'll just say them out loud. First one obviously being related to the losses that we are undertaking in the subsidiary.

When can we expect these losses to subside? In the earlier call, we mentioned it's in H2 FY '27.

What is the trend we are looking at for the next two quarters? Second question is regards to the Track & Trace business.

Earlier we used to mention the market size of this business to be around ₹500 crores. Four four players are already in this.

What kind of a market share are we looking to capture from them? Basically over the next 2-3 years, what kind of revenue are we targeting from this segment alone?

Is it going to be a meaningful contributor once the pilot commercializes, or it will take longer than that? We have never talked about the margin profile that this business can do.

If you could disclose that, it would be really helpful. Sir, total investment done in the V-Shapes specifically

of

Hello?

Yeah. Just if I just can answer them because I'll forget your questions by the time I answer the first one.

I'm a 47-year-old guy with a very short memory. Okay.

Sure.

No worries, sir.

The first question that you asked, I believe, has been answered.

Right.

Right. Right.

To some extent, Saket ji has asked a similar question again. We're going to revisit this at the end of the investor con-call, I believe, because we have to finish with the two questions, and so it might be coming towards the end.

If you have a bit of patience, we'll come back towards the end. Now the second part was about our Track & Trace business, which also has been addressed to some extent.

We started this thing about five-something years ago. Again, I've been saying the same thing for the packaging business, it's been four years of investment in that business, creating IP in that, and sort of understanding where the market is, where they may be, where we want to be.

Like you said, yeah, it is a ₹500-₹700 crore business currently. The scope is there, but again, like I said, we're looking at redefining the way we are addressing that market.

It's not only a conventional Track & Trace solution, we're already at a certain level where we're break-even, if not profitable in the conventional part of the business. We've been working more on sort of a IP-differentiated solution in that business.

That everyone understands my way of thinking. We had a Track & Trace we developed.

We spent some money developing it. We found a team that had developed a blockchain-based Track & Trace with a QR.

We dumped our solution, and we went for them. We got that team.

That team became our team, and that created its own team. We invested more in developing the product around them.

We worked with them for the last three-something years, and we put a lot of money in that. We've developed our thing.

We've given all our printing and other types of R&D and other expertise on glue to them and all the expertise that we've also acquired through Markprint. It is bringing different parts of Control Print together.

Like I said, we're to a level where we are break-even, if not profitable. I can't disclose that.

We are not disclosures in that business. In general, whatever we do in terms of any business, is at a similar gross margin level to what we do in our coding and marking business, at least.

Now the point that was then raised was, what is the size of this business, and what is the scope of this business, what is the market share. For us, it's to create a product like this.

We know that we can make a product, we can sell it as Control Print, we can do another me-too business and get a share. I think someone's mic is on, and they need to switch it off, because there's some background noise coming through someone.

I think what we're trying to do is create a IP-differentiated solution, okay? We are not very content doing the same thing that we're doing.

In the coding and marking business, we've done it. We've established a proper market share.

We've still got great option and great solutions in the coding and marking business, which is enabling us to continue growing. We've got a lot of all the equity there.

In other segments, we don't want to just use the Control Print reach to make a me-too solution, which could probably be profitable and give a basic return on equity, but that's not our philosophy as a company. In terms of where we're going to be in 2, 3 years or something, I think I'd pointed out we've got two pilot projects that we are running amongst two of India's largest pharmaceutical companies.

We're coming to the end of those pilots. If we feel all of us have agreed, the customers, but also us, that we are getting the results that are giving them a significant delta over whatever they're currently employing, then I think there's a firm commitment to implement our solution and scale it up in those companies.

If that's the case, that will be obviously a significant growth driver for us in this year. It will also sort of re-establish the standard of what can be done and what should be expected in a Track & Trace solution of the level that Control Print delivers.

We believe it'll also affect the rest of the market and hopefully make it much, much easier for us. Customers would be coming to us rather than us going to them post that if this happens because the proof of concept is that the customer has done the pilot, he's done everything, he's doing the market testing, and he's finding it successful.

Again, I can't give exact numbers. We don't give predictions on all these types of things.

In terms of, like I said, margins, I think overall, Control Print should be able to maintain its margins overall. Like I said, if someone needs to understand what our solution does, first of all, I don't know how much we can disclose because most of our stuff is covered under NDA.

If we can disclose some general stuff, we will be more than willing to do that. Again, like I said, it's a very IP-based platform, which is differentiated.

For that, someone has to be willing to invest time in understanding the differential point between us and our competitors or whatever's there right now in the market. That's a second question that you asked.

Now you would ask another question, please go with that. Sorry

from my end. I'm in a public place, sir.

Third question would be, sir, you can't even give the ballpark figure regarding the V-Shapes and Track & Trace business as to how much you expect them to be a part of the overall revenue mix over the, let's say, next 3, 4 years? A ballpark figure could also give us some sense as to where the management is directionally going.

Yeah. I think there's some overlapping question where Saket has asked overarching question on this basis.

If I can just cover this, or if you can make that a point, Saket ji, of your question, I'll explicitly address that point. That would be

Okay. Sir, just one last question on my side, sir.

Basically, sir, you basically said that once the negotiations are done, you would be coming out with a presentation on Track & Trace business itself. When do you think we can expect that?

We already have one. We have a clear one.

It's for customers. What are specific differentiating IPs are.

Right now, we give it to people who've signed an NDA with us. We can put out a general purpose Track & Trace, maybe even on our website.

Someone can do it. Sure, Jaydeep.

You can just put it up a standard General

one,

we can We can just put it up on the website. We can do that.

That's not a problem.

We can do that. That will be really helpful, sir.

Sure.

If anyone needs to

get

a specific thing of what we're doing with specific customers, obviously we can't disclose what we're doing with specific customers. I'm sure a lot of you guys are analysts for some of those customers, or investors in some of those customers.

Maybe you can speak to the customers directly. They will be better at explaining, because it's better to actually get it from their point of view, right, rather than getting what I'm trying to pitch to them.

It's better to understand what they are thinking, and why they're doing this, and how they're evaluating this type of purchase. I think that's far more valuable than what we might say.

Yeah.

Makes sense, sir. Just one last question, and I'll

Please.

Please go ahead.

Market size of this product basically. We have said that it's a 300 top 300 drugs are being already mandated, and government is increasing it to a 1,000 drugs.

The execution on the government side is not been that strong. As it is a compliance cost for pharma companies, 1 to 4.

How much of a market size increase are we expecting in the pharma space for this Track & Trace?

In the top 300 medicines, we're already doing about 20 or something, 20-22. The government is going to come out with a notification in our discussion with the DCGI to make it to 946 of the top medicines of India.

Why 946, I'm not sure about, but this is what the preliminary discussions that are going on. I'm assuming these are public, so, if they're not, I take that back.

This is a discussion that's come out right now to extend to 946 medications. The fundamental issue is that there's no standard in terms of the fact that beyond a QR code which goes to the manufacturer site to validate it, whether it's working or not.

What's happened is I believe, there's been a lot of instances where people have scanned the QR code to authenticate the medicine, but the medicine was counterfeit because the entire batch was copied and released out in the market. Now what that is doing is that's given a false sense of security to the customers because you scan the medicine, it's saying it's authentic, but it's not actually authentic.

This is one of the main issues our solution is addressing at the heart of, so that everyone knows what we're doing in a differentiated manner. You get 100% 100% accuracy, even if there's a million copies out there, the one authentic will come out.

We also have some other parts since you're already doing the Track & Trace, which is acquiring warehouse, supply chain, and other types of information, some other types of management for the pharmaceutical companies, they can use all this data to manage all their logistics, supply chain, diversion issues, and other types of things. Just so you get an idea, there is the talk to make it 946 medicines.

There's no notification yet, right now. We don't know when it's going to come out to be of this thing.

There are some issues in the first 300 medicines in terms of the fact that the objective was to eliminate counterfeiting, but actually, it's in fact gone a little bit the other way. It's even the customer's a false sense of security that it is actually not genuine.

It's not really helped so far, the objectives have not been achieved. I don't know.

I know the government does want to extend it, but at the same time, there's also some more discussions of how the solution is going to be improved so that it's far more difficult for people to make counterfeit copies of these types of medicines.

Thank you for the opportunity. Shiva, just circling back on CP Italy.

I think in the last quarter call, we had also mentioned that we had some quality control issues, and to get CP Italy to have the similar quality of Control Print. Hopefully post that, the backlog would be taken care of.

I realize I guess 3 months isn't a long time, but it seems that those issues are still continuing. If you could just talk exactly where we are as far as the quality control issues are concerned, and when do we start seeing us fulfilling that order book?

Yeah. Samarth, what's happening is right now, it's not so much of a quality control issue.

What happens, say, we made a batch of 10 machines. Part of them are already sold, a significant chunk of them are sold.

Now the first machine that came was sent to a customer. Some issues were there because the testing was less thorough.

Then the engineer has to go 3 or 4 times in order to make some changes to the machine. Now it's running fine.

The second machine, we had to sell to a customer in India. It came to us.

We are having some issues with it even though we have a strong technical team here, and we can't send this to our customer. We had to send a machine that we have in our own stock for our co-packaging to the customer instead.

Now the third machine, the fourth machine, the fifth machine are ready, but what's happening is that the first, second, third, and fourth, and fifth machine are all slightly different to each other. They keep improving the machine.

My point is all 10 machines have to be the same. Whether we go and retrofit those old machines, and the next five machines, or whatever.

It has to be the same machine. It has to be tested.

It has to work. I know this sounds like whatever, Math 101 or something to everyone, it's obvious.

The reality is that sometimes look, people make things and they make a product, and then they make minor changes, and they delete the product, and make minor changes. I think Tata had the same thing with their cars.

Earlier, you used to release a Tata car, and everyone used to say the V2 is going to be good. Just wait till the V2 version comes out for all these cars, and then buy the Tata car.

Again, a lot of respect for Tata. Tata is a company, please don't take it in a wrong way.

I hope nobody's sending this to Tata. They're a top customer of ours, very big customer.

You understand, I'm saying this had this reputation a decade ago, and then they've gone through that and resolved that it's first-time right. Now what's happening is it's a very similar story that's happening out there.

For us, it's not possible to manage customers in multiple geographies, multiple time zones, multiple things, send out a product, and then make some changes to it on the fly. Our instructions is that all 10 machines have to be made, all 10 work exactly the same, all 10 have the same bill of material, the same parts, the same design, the same everything.

Just small things, like they can make a change in a part, and they don't update the BOM with that same drawing. What happens, when we make 10 new parts of that, we make it with the old drawing.

Someone has changed the drawing. We're like, we got a part, it's matching.

It's not working because they've got something with the thing. It's frankly speaking, it's very small stuff.

It's what happens, you buy an R&D outfit, frankly, which is posing as a company, and then they're not really thinking in the same way as a company, what to do. It's taking us a little bit of effort, The thing is, I'm unwilling to send anything out that doesn't meet our own internal standards.

It's a need for patience.

Yeah. Right.

You've mentioned that we are spending about I think €100,000 a month. Is that the main expense?

That comes to about ₹12 crores a year. Is that the total expense for CP Italy?

No,

that is just the R&D expense. That's not the total expense.

What would be the total expense, I'm not talking about the COGS, just the OpEx and the wages.

I can ask Jaydeep to look at that. I'm saying the R&D expense is in the region of 100-something-thousand euro a month.

Our own expenses will be higher in India, but because that is more for the coding, marking, printing business.

No, no. I'm just talking about CP Italy, what would be the total expense on the OpEx and the wages in CP Italy for the year?

Yeah. The direct wages are not very high.

I think they're €1 million or something, maybe less. It's difficult to see because we have a lot of consultants and other types of things, some people on contract because we prefer not to take people.

I

It's roughly about €750,000 a year.

In the fixed?

It's the total cost, out of which R&D

It's contractual cost, yeah, and then R&D, other things will be all in addition. Again, like I said, we do some stuff on it's not the total cost, but yeah, it's not a very huge cost.

It's maybe €3 million-something a year, 2 2 and 1/2 2 somewhere between €2 to €3 million a year to just run the show there.

Yeah.

Out of which €1 million is R&D, and I'd say a million to million and a half is all the, whatever, the power, and the sales team, and a couple of logistics and admin team, and there's a few guys for production and technicians and that type of stuff. Maybe somewhere between €2 to max €2.5 million would be the fixed operating cost, we just have the people sitting around with all the types of things.

I'd say that

Is it possible to restructure some of this cost and bring it onto the India operations, because we're paying our tax rate on the consolidated basis is close to 40% at this point?

There is some work going on on that side in terms of the machine. Like I said, first, we need to make the machine 100% to say like this is the final machine because otherwise, I'll keep making some new machine in India or some new parts for those machines in India and so on and so forth.

It's not like we're planning to reduce the size of that office because now it's really we have slimmed down and got to a lot of the additional costs that are there. We have, about 3, 4 people have been let go and some other things are there, but like can say, all the additional fat or the nonproductive people and expenses have been cut.

We're going to see some more differentiation there. It doesn't look like the costs have come down so much, but we've gotten rid of a lot of the nonproductive people.

Where the investments have been made is much more on the sales team and getting a much higher sales type of an output out there. Definitely, I'm expecting much better sales results, revenue results from them going forward.

As far as getting the cost of the machine down, for that, we have to say that this is the final final product. It's not going to change till we make a new version.

Whenever we make a new version and update the car, till I don't say that this is the Toyota Corolla 2024, and this is fixed, and Toyota doesn't sign off that you don't come to the Toyota Corolla 2027. We've got a machine.

It's theoretically been fixed, but obviously like the final things there. I think we're very close to the final final stages of this machine being fixed, this batch of 10 coming out, us absorbing that, and then the plan is that all these parts are bought from local Italian suppliers, okay, it costs us significantly more than if we could source some of these parts from our base, or manufacture them ourselves, or at least negotiate with our suppliers if they are bought out, things like specific motors and drives and things like that.

That's the idea, to get the cost down in future batches. There's already some significant amount of work going on out there.

I think because there's some minor changes, it's been a little more of a difficult process than we originally envisaged.

Thank you.

It will happen. It will happen.

It's just, yeah, it's just step by step.

Appreciate that. Thanks.

Hi. Thank you for the opportunity.

Am I audible?

Firstly, I would like to know some numbers in terms of our acquired companies. In Codeology and Markprint, and CP Italy, what was the sales numbers for the entire year FY '26, and what are the profit or loss numbers for the year '26, FY '26?

Sorry. We don't normally give it for the specific subsidiaries.

I think it might come out in the annual report. Whatever we disclose whatever's required to be disclosed.

Like I said, almost the entire losses is on account of CP Italy of the consolidated losses outside of India. If obviously, I guess that's the interesting point that everyone wants to know.

The entire loss can be ascribed to CP Italy.

Sure. The reason behind me asking about individual numbers is that from the past year, we have not been able to grow our top line as well.

Expenses and losses are one thing. What I want to really understand is what top-line growth are we envisioning for the future in terms of our subsidiaries, in terms of Markprint and Codeology specifically, because you mentioned that they are right on the basis of break-even and even profitable.

What top-line growth are we envisioning there in terms of percentages, maybe you can share, and what are we targeting? What sales figures are we targeting there?

Yeah. Again, we're expecting some growth there, similar 15, 20% growth rate.

I think that's what sort of what we would expect there in both Codeology and Markprint. In CP Italy, I think there would be some better growth if we could sell some of the machines that we have sold, but actually sell them by shipping them out.

I think it would have looked a bit better, at least optically. For Codeology, just so that everyone knows what we've done, we've taken the print and apply technology from them, we've transferred it to us.

Now we're trying to integrate our own thermal transfer in it, our print engine. What will happen is that will also lock the consumables for them and for us, so that if someone buys our print and apply whether from them or from us, the consumables business will come to us recurringly in the future.

Print and apply is also, although India's not as big a print and apply market surely as abroad, there is still, it's a growing segment in India, and Control Print was not there in the segment. Just in the recent sales managers meeting back in April, we sort of took the first training for the print and apply, and we're expecting that although a bit slow, we will get off the ground in this year and start the print and apply sales, which in the future years will be an additional product in our coding portfolio, and help us maintain our growth rate.

Like I said, for Codeology, we have done an analysis of their business, and in all honesty, we have asked them to scale down the core business because we feel that the types of margins there's not an operating leverage. If they grow from 1 to whatever, €1.5 million or whatever they were, if they become double, it's not like the profits will become three or four times.

It's a bit of a tricky situation there. They themselves believe that the V-Shapes packaging business has the maximum amount of scope in the UK and those areas.

They will be doing the sales for UK, and maybe even Scandinavia and Benelux or something like that, and the co-packaging there. They are more focused on scaling that up and scaling up a couple of our coding and marketing products in their market.

We're actually going to make it more profitable by scaling down, reducing, and rebuild, or do some restructuring there, getting rid of some of the excess costs, making the core business more profitable by making it a bit smaller, which is a bit counterintuitive. The costs should come down faster than the whatever the drop in revenue as a result, and refocusing our resources on the packaging business and a couple of select parts of our coding and marketing business.

That's the plan with Codeology. With Markprint, they've already got some good contracts.

Like I said, what happens is, these companies it's a bit tricky to say because a lot of them are lumpy businesses, but they've got a couple of good things going on right now, and hopefully that keeps going on. I think we should see some strong growth.

They had some technical issues themselves in a couple of installations last year, but those installations are multi-million-euro potentials. If that continues to roll out regularly without getting any new customers, they just continue the rollout, I think they'll strongly go at 20-25% a year.

That's fine. That doesn't mean of course we're trying to push them to get additional customers, additional things in the meantime.

I think those businesses are less of a concern. CP Italy is the main focus for us, because that's obviously where the losses are concentrated right now.

Okay. Thank you for explaining that.

The Markprint technology has been largely, I think, consolidated in Control Print. We are using that now quite extensively, and also in some of the solutions that we are providing our customers.

It has been contributing to us in the last couple of years, and now definitely I think the level at which we've integrated has increased. We are providing it at a much higher level to our customers.

Okay. In terms of printers, can you help me with the number of printers that was sold in this particular year?

For 25-26, you mean to say?

For FY '26,

yeah. It is about 3,064 printers.

Okay. 3,064 printers.

All right. I think that's it from my side.

I'll join back the queue. Okay.

Yeah. Hi.

Am I audible?

You are. Yes, Hardick.

Yeah. Hi.

Thank you. Shiva, just one point on the coding and marking business in India.

Notwithstanding your the caution that you said that you need to focus on the other businesses before significant slowdown or maturity comes to this business. Actually, the business has been doing pretty well even when you see the performance in FY '26 or profitability, printer addition.

As Jaideep mentioned, we have 3,000-plus printers sold this year. The metrics seem to be pretty encouraging there still.

Trying to tie back to your initial remark, like these large IT companies who probably took a little time to wake up to the AI threat and invest in that area. Do you feel that compared to 5 years ago, the growth opportunity of the coding, marking business has meaningfully slowed down?

That is why you're focusing on these new technologies? Or is just out of abundant precaution, the coding business is still doing well.

You're just trying to pre-empt the slowdown that might come 10, 15 years later, and hence, you're trying to seed these new technologies today. Just wanted to get a sense on how are you looking at the coding, marking business's growth potential compared to what it was, let's say, 5 years ago.

Hardick, if I can ask you some questions. What is the market cap of TCS and Infosys and Wipro and Cognizant and all these guys?

Then what is the market cap of NVIDIA and Microsoft and Apple, and even new guys like Salesforce, or Oracle, all those types of guys who own the IPs and own the products, or SAP, or all those types of guys? Where do we want to be?

I think that's a fundamental question for Control Print. We're strong in the coding and marketing business.

It's generating the cash flows. It's roti, kapda, makaan, butter chicken, dal makhani, whatever you want to call it today.

I'm not denying all those things. That doesn't mean at least for us, we still feel that we have that capable capacity in us to do much better.

I personally feel I have the juice in me to still be motivated to work and do something rather than being what, I'm getting a comfortable growth in the coding and marking business, and I want to focus on my lifestyle, and that other type of thing. I think our team is still strongly motivated to keep pushing our own boundaries.

Then we understand that there's a certain lumpiness and a up and down that's going to come with that, especially at the size of company that we are. We could manage it much easier in the coding and marking space.

Like I said, when I look at the fact that we've probably paid ₹100, ₹150 crores in royalties over 20 years, and if I look at the today's cost of that, and if I look at the present value of even paying ₹3, ₹4 crores 20 years down the line, or say ₹9 crores, whatever it is, after we renegotiate the agreements down, and those royalties have come down because we've developed some of our own technologies in the meantime. We don't need to license them anymore.

CIJ, which used to be 90% of our sales, now 60%. So 40% is at least our own in-built type of solution.

What's happening is that my own feelings come from a very different point of view. Again, like I said, that doesn't mean the coding and marking business is bad.

It's a good business. I'm not saying this is a threat, like I said, right?

I think whether people look at AI as a threat, or I'm not getting into that part. We're not getting away from coding and marking because we feel it's under threat.

I don't think the government is going to change legislation anytime soon, from my feeling. Again, it's just my own feeling, opinion.

Then I don't think legislation is going to change fundamentally to sort of make the batch and all that type of information, MRP information, non-mandatory. It could happen.

I'm not denying that. As long as that happens, it will be required, and same thing for the pipes and the cable, the pressure ratings, the information.

We're bringing all basic stuff out here, I'm not seeing this legislation changing, at least in the next few years. Of course, I'm not in the government, I can't say anything, and I don't know how they evaluate what needs to be done and not to be done.

It's not a threat aspect. The focus is more that we have that capability.

We have sort of completed our coding and marking product portfolio quite substantially. With the Markprint acquisition, we've improved our own digital printing skills.

That opens up a new avenue for us, which is a combination of digital printing, coding and marking, part of our Track & Trace offering also. That's a big area we've opened up.

It's a sort of hybrid area. We've gone into the Track & Trace area, and we've been investing that in the last 4, 5 years now, and that's somewhat at a certain level.

Although, this needs more focus, more investments to continue developing that so that it clearly is a strong product. Just to give you a larger picture on what's happening, because the coding and marking is not bad, and I think that it is going to be the strong ways, which is going to give us that space that we can create other platforms.

I don't think that that's going to change. Neither is it a bad business to be in.

If I want to be a different level of business, if I want to be a different level of IP, a different platform, then we have to actively target these opportunities that we've undertaken right now. Like I said, I'm focused on making majority of these opportunities before we even think of taking anything else.

First we will mature these before we even think of something else. Once that's profitable, then only we'll think of something else going forward.

I hope that's Got it. Shiva, and actually, as investors, we are encouraged that you're exploring these new areas.

The objective of asking the question was that, are we like the Infosys and TCSs of 2010, or are we in the 2020 phase where we have to spend on this today, otherwise the overall consolidated growth is under pressure? I think you answered the question.

I was trying to understand from that perspective. All the best to you on these new ventures, and hopefully, we start seeing them bearing some fruits soon.

Thank you.

Thank you.

Yeah. If we can just put those questions again, Saket ji.

Just one question at a time, please. Break it down.

One

is the Unnati question. The investment in the Guwahati facility, is that correct, Saket?

Saket ji is on mute.

I believe the first question was the investment in the new factory in the Northeast. Like I said, the bigger longer-term issues with our current setup of the packaging business is the cost of the packaging material.

I agree that some questions were asked, and I did say yes, there's some slight issues with the machine finalization as of right now. One of the other big challenges in the long term, especially with the large customers, is the cost of the material.

Just very approximately, it costs ₹2-something a packet for the cost of the packaging material. Between ₹2 and It's increased a bit after this Iran thing.

We're importing it all. It's going to cost about ₹2.5.

When we make it in Guwahati, we believe we can sell it to the customer for almost 40% less. What is ₹2.5 now will be ₹1.5 then, or what was ₹1.09 to be ₹1.25, sorry, paisa.

We believe that that's going to actually make a much bigger explosion in the market. A regular sachet costs about 40 paisa for a bulk customer like Unilever, who makes Dove, or something like that, Sunsilk, or what are those types of things in bulk.

We would be about ₹1.20 to 30 paisa in that type of large-scale customer. Again, it's never going to make us go to the ₹2 packet, or even maybe up to the ₹5, but we'll be very competitive in a ₹8-₹10 packet.

The other part that we have to think is that in the foreign markets, €0.01 or whatever is really not a big deal for them. Even for like ketchup, and so on, cheaper products.

I don't think for them it's going to be a different type of situation. We needed to invest in the materials, and of course, that's also part of our business model.

It's a little bit by selling the machine, of course, the packaging machine. In fact, out there, the materials business will give us, when you look at the value of how much margin we're making on the machine versus how much we're making on the material in year one, obviously the machine is the main business.

When you look at the fact that we're going to make money on this machine, you can explore 15-year life. Even if it runs 10, 12 years on average, 15, 20 like, no, you're going to make a little money on this machine for what, 10, 12 years, then the value of the materials is significantly higher than that of the machine.

It's like a jet engine or something. If you sell an engine, but the money is as much in the parts, and the upgrades, and the services.

Obviously, it's the same thing as our inkjet printers or our stuff. Definitely, there's a value in selling the machine, and a margin that we're making in it right now.

We're going to make more money in the materials down the line. By making the materials cheaper, we believe that the volume of the business is going to increase exponentially.

As a result, the scope of how much we can service the V-Shapes business is going to increase exponentially. That's the primary purpose of putting up this Unnati factory.

We are putting some coding and marketing bits out there. This is to accelerate the revenue right in the beginning.

It's not that our Guwahati facility is per se running out of capacity. We could have done these minor expansions in Guwahati.

We're doing them instead in the Unnati facility so that we maximize the incentives on offer. Does this answer the Unnati question for everyone?

On the Northeast expansion? I think that that's that question.

Yeah. Yes, sir.

That was the reason, and if you could just also give color on the incentive part, and also on an annual basis or by what optimum level of revenue we would be enjoying the benefits? Some color on the incentive also would have sufficed, or I'll take it offline later on.

The benefits are you get ₹7.5 crores back on a ₹15 crore investment in plant and machinery. If you go beyond ₹15 crores, you still get only ₹7.5 crores back, it's capped at that.

The second benefit is that you get a 5% interest subsidy on your term loan

Yeah.

for a period of

6 years.

6 years.

Yeah.

The third benefit is that equivalent to the plant and machinery investment, you get a GST refund of the same over 10 years. Suppose, just to give an example, if I invest ₹50 crores in plant and machinery, I'll get back ₹5 crores of GST refund a year every year for 10 years.

Obviously, in present value terms, that's less than ₹50 crores, but there is a benefit to that. We are already in Guwahati.

We probably wouldn't have gone for this scheme if we weren't already there. It's not far from our existing plot.

We've had a lot of experience working in the Northeast, we didn't feel any risk in going to that area. The logistics costs are quite well covered because there are some separate minor subsidies on that to getting the freight from somewhere in the Northeast to I think Siliguri or Bengal or some place like that.

It's not really a concern. There are some reasonably significant benefits.

They're not huge, but they add up, and made our case for sticking to Guwahati for our expansion worthwhile, rather than do something right outside of Bombay or Vapi, Silvassa, somewhere. Yeah.

That was the other option.