Control Print Limited ($522295)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I welcome you all to the Q4 and FY '26 Post Earnings Conference Call of Control Print Limited. 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 risks 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 March 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.

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 have taken out time for your busy schedule to attend this call. Thanks for being on this call. Mr. Shiva Kabra, the Joint Managing Director of Control Print Limited, also joins me on this call. For the first time joiners who are 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 on the performance of CPL for the period ended 31st of March 26. Revenues. On a consolidated basis, the total revenue is INR 484 crores in FY '25-'26. The figure for the corresponding previous year was INR 431 crores. Out of this, the operating revenue is INR 482 crores in '25-'26, which was INR 425 crores in '24-'25. On a stand-alone basis, the total revenue in the fourth quarter is approximately INR 138 crores, which is a good growth from INR 114 crores of the Q4 of the previous year. For information, the total revenue for FY '25 -- '26 and the previous 3 years is INR 460 crores, INR 395 crores, INR 347 crores and INR 295 crores. Regarding operating revenue on a stand-alone basis, it is INR 446 crores for the complete year of '25-'26. This was INR 385 crores in last year. coding and marking continues to be the main part 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, FMC, steel & 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 have 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. Our pipeline is being generated for the laminates, co-packing and new machines. Management of this division is now strictly controlled and operations are tightly measured. The mask lab has now been operating as a PPL safety division. And along with masks, we are also engaged in the trading of [indiscernible], suits, helmets, gloves, blankets 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 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 cost and overheads also is being prioritized. We would be developing new solutions and capitalize the available market opportunities in the [indiscernible] segment. With respect to the Packaging business, both in India and overseas, we are looking forward to increasing revenue in the printer sales, the co-packing and laminates. Overseas subsidiaries will continue to monitor the focused growth targets. Business plans have already been mandated for execution. We now leave the floor open for any questions. We'll be happy to address them.

[Operator Instructions] We'll take the first question from Mr. Keshav Garg.

So Mr. Kabra, thank you very much for this. I'm 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. So I mean, 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?

Yes. So Keshav, this is Shiva. Thank you for taking part in the conference and for your question. I think that will be a concern for many other people also. So you see the thing is, I think this is a fundamental question for me as a manager and for the shareholders also or investors, how you want to term it. You see there are 2 routes out here. We are in a comfortable position in our Coding & Marking business. So when I look at the results, our profitability has increased on a stand-alone basis, fueled by the Coding & Marking business, even though we have made investments in both previous [indiscernible], which actually probably was at least breakeven this year, I would say, if not at a profit, but it was definitely at least breakeven this year. So we didn't probably spend money developing that business, but we did make losses in the packaging business in India. So the question is whether we wanted to be a TCS or Infosys type business, I mean I'm not trying to say they're a great company or something. But in the end, we've been making a lot of money in running a comfortable business model for 30, 35 years. But 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, like, Zoho or SaaS-type products. They've not competed with anyone in the last -- or done anything like that. So the question for us is that there are certain types of companies and business models which are going in a certain direction. We have felt that our Coding & Marking business has a certain limit because the total business in India is still like about somewhere between INR 2,000 crores, INR 2,200 crores was our last calculation when we add the 4 of us plus assume something for all the other parts of the market. Now if that's going to grow like about 10%, then 10% to 11%, something 10% on average, then the option for us are limited, although it's a very comfortable, highly profitable business. And 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. So we were licensing many things earlier, we were a distributor for [indiscernible] we were manufacturing under license. We developed a lot of our own products and technologies in the last few years. So just so you understand, the losses that you're talking about are almost entirely in the Packaging division abroad. It's not in mark print or [indiscernible], 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 is not -- I wouldn't say like it's something that [indiscernible] really doing that directly in terms of packaging machines and packaging materials, right? We are supplying a different set of equipment in the packaging lines. So the fundamental call out here was to invest in some technology, which we feel has a differentiating factor. And the investment cycle has gone a bit longer than what we expected. That's also because it's taking more time -- because it has taken more time to stabilize the machines as compared to what we expected [indiscernible] actually stable, but in some types of material development, in terms of certain other aspects that are there in those markets. So 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 & Marking business. But we need to invest and have patience. And we've gone on 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. So I understand that as an investor, as a shareholder and even as a manager, I have to ask these questions to our Board, which these questions were raised also yesterday and has been raised in a few other meetings that [indiscernible] abroad sort of makes the growth out here look very muted and it's not that good. But the thing is it's -- it's a conscious path we've taken. We've got like a bunch of key patents, not only like I said, in our Coding & Marking business, which we've created over the last few years. We've done a lot of investment in R&D out there also. So we are coming from -- I'm coming from a different angle where I have been paying license fees and royalties and someone calculates that I've been paying INR 7 crores, INR 8 crores, INR 9 crores a year, INR 10 crores, maybe whatever it is. And we've been paying 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. So it's a very different type of a situation, and this change has been happening for a decade. We need to focus on our Coding & Marking business only, so 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've got to the packaging industry also on that similar platform. But like I said, if someone is asking me, and I was just at Interpac for about 7 to 8 days or something in Germany, I think there was a lot of strong interest in our product and our platform. So it's something that definitely -- I'm still very sure of the end use case. But 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 the next decade or 2. So that's sort of where the situation is. I don't know if this is answering your question in complete. No parity here. We're not taking on certain things. It's a very calculative decision where we have invested is to take certain intellectual property where either we have some holes in our portfolio and we want to ramp it up in terms of Codeology with print and apply. In terms of markt print with 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 bought, which we really believe we can develop to be a significantly bigger business and a more profitable business than our coding business in [indiscernible]

So Mr. Kabra, I appreciate your answer, and I do understand that until we attempt to do new things, the company cannot grow. But I mean, there has to be some end game 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 open-ended that after 3 years also, we are discussing the same thing. And I think we are again putting INR 32 crores in the Italian subsidiary, whether through IPR purchase or equity infusion, it's basically the same thing that we are putting INR 32 crore additional capital. So basically, how much money did we put to acquire this Packaging business? What has been the additional investment since acquiring it? And what has been the cumulative loss? So 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?

Yes. So 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 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 [indiscernible] 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. So of course, some part will be used to repaying ourselves. But this is to formalize the fact that all the IP is now belonging to Control Print, not to Control Print Italy. And we are also potentially going to be licensing this technology to other people, okay? So 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 make it a platform or even license it to other people. So we can do both types of things in the tetra pack, right? We can also license it to other people in certain geographies or we can make everything ourselves. So there are multiple options ahead of us. For that, we wanted this to live with Control Print itself like the main Control Print [indiscernible] India. So that's the situation that's there. But I can assure you these questions are asked of us, obviously. And 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. So 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. But I understand and I have done this with like 2 other platforms that we've done before. Now [indiscernible] 3 other options like the Track & Trace. Now you can see the sort of results showing up out there. We can see the same thing here. And again, we've gone for a highly differentiated approach. If we go for a less differentiated approach and keep building out the platform, it's going to obviously probably give us a faster return. But like I said, the idea is to get something which can really take the company to the next level. I think that's where the thought is here.

I hope the company succeeds in our endeavors.

We'll take the next question from Madhur Rathi.

I wanted to understand regarding the 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. So what is this increase related to?

I cannot hear you clearly. Can you repeat everything slower.

Yes, sir. So I wanted to understand the increase in employee benefit expenses during the quarter from INR 20 crores, 21 crores to INR 27 crores, INR 28 crores. So why is this? And from my understanding, all the investments in Track & Trace have been done and the employee expenses were going to stabilize at those earlier levels. So what has led to this increase?

I'll take the second part of the question first. As far as Track & Trace goes, I mean, we're continuing to invest. We have a team there. We continue to develop new products and IP. So there is an ongoing commitment and an investment. But now we're making enough revenue that it is breakeven, maybe even profitable. I can't disclose those exact numbers, but it is not -- if in the future, I mean from whatever we are seeing, it's either going to be at least breakeven, if not profitable. So it will not be -- 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 answer this question.

Yes. If you look at the numbers, you would feel that the amount has increased. But on a granular approach, like what we've analyzed that since November '25, the new wage code has come into being. And as a result, we had to recast the liability on account of leave encashment and gratuity. So major chunk of the variance is because we have implemented the new wage code indiscernible] and the hit has been the [indiscernible]. Along with that, we have also done some good amount of provision for the sales and service people incentives and also like some loyalty bonuses for key management people. So the last 2 are basically in terms of keeping the business and having the right people. And the first impact of about INR 3.5 crores was because of that leave encashment and [indiscernible] the entitlements.

Got it. And sir, our stand-alone business has done a decent growth during this quarter. So 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. And 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?

Yes. So just -- we can't give you percentage numbers in terms of price hikes, but we have implemented a surcharge because right now -- so I think previous year, there was a price hike, but the major growth has come from the volume. This year, what's happened is because of some further -- we've actually had some cost increases, some major issues happening with the 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 chemical [ chain ]. So there's some cost increases for sure on our side as force majeures have been declared here and there. So obviously, I mean, it's not as bad as COVID by any stretch of the imagination, but we are keeping our stocks ready. So we have had some significant cost increases. Also, the rupee depreciation has affected us, but we not even calculated that as yet. But we have taken a surcharge from our customers to counteract at least the cost of -- whatever cost increase we're going to incur due to whatever this conflict and whenever it ends, god knows. But it's going to take a few months for the market to normalize even if the conflict ends tomorrow [indiscernible]. So I think the surcharge will be placed through the end of the year. There was a couple of other questions in there, which I think Jaideep will address.

No, you've addressed fully. and He just wanted to know that how are you fitting in the Coding & Marking marketing there.

Fair. So most of the growth last year was volume. Some small part is the cost increase. And this year, there's a surcharge, but I don't think it's going to -- it's mainly to cover the additional costs that we've already incurred. It's not -- 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 effect.

Yes.

And sir, on the demand from the FMCG segment post the GST changes?

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, so it's difficult for us to say. Normally, the packaging sector, which is pharmaceutical, beverage, food and personal care, home care, FMCG, whatever you call it, is stable. And we see more ups and downs in the industrials, which is like cable and wire, pipe, steel, those are the ones which fluctuate more. So depending on -- because a lot of them are linked to home construction and white goods and those types of things. So the packaging side of the business is quite stable. I mean people consume milk [indiscernible] whether it's GST is there. I think but I'm not sure.

We'll take the next question from Vineet Thakur.

I had a couple of questions. If you could give me the revenue breakup by consumable spares and...

Yes. I'll take this question. So for the Q4, I'll talk first, so between printers, consumables, spares and services, it is 12%, 62%, 9%, 16%. And 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.

And sir, could you just also -- since already my question has been answered, I wanted to know about the Codeology and other investments with especially V-shapes because we've been bleeding money for it. And as you mentioned, we don't have a time line when we will have at least a breakeven point for it. But could you explain the Indian business as well? What do you think about the Indian business as of right now?

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

The Coding & Marking business.

So that's going steadily. I think like that's steady so far. Last quarter or last year was good. This year should be also reasonably good. And like I said, we're expecting the tracking race to be a major -- a big -- one of the things that we add to sales, hopefully, profitability this year. Packing to be developed to some extent this year, stabilized where we can then have a base on which we can grow.

Could you expand more on the track and trace business, like what revenues or what is the highlight in the next 2, 3 years, what do you think the potential of the business could be?

So that's difficult to say. There are other people in it. So we are a very late entrant to the market relatively speaking. We are 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 is the state-of-the-art from other people as of today. But I can assure that any leading pharmaceutical or other similar company will find a significant amount of benefit coming to us. And I had mentioned that we are doing some pilots with 2 of the top 5 to 10 in size pharmaceutical companies in India. And we are coming to the end of those. And if everything goes as what we think is successful, then we should get a bigger rollout in these companies and that will also have a market proof to the rest of the companies or the rest of the customers. So yes, that's sort of where our focus is. It's not really been on rushing to try to sell to everyone, going to depth and really working closely with few 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. And so small proving the proof of concept in 2 apex customers, and we feel that will have -- its own self-explanatory effect down the line to all the other customers.

Sir, just a last comment on V-Shapes. What do you think about when can we reach a breakeven point on what scale and what factors could it lead to reaching a breakeven point? And just a general commentary on that part.

It could be this year also. So what happened was we have predicted about a EUR 1 million something loss. This is like [indiscernible] a reduction from about EUR 1 million, EUR 1.5 million last year to about EUR 1.5 million this year. What's happened is that because of some difficulties in 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. So I think if that happens, hopefully, the losses would reduce. So and also the revenue may start. We have a couple of big customers in the Gulf and Middle East who are not now purchasing materials because we can't ship them the materials. So in the Gulf in the Strait of Hormuz area, and we don't want to get past this. And so that's affected us to some extent. But I think, yes, it could easily break even this year. But irrespective, 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 shifted to India, I think this will be the last -- like you said, someone said, part of it is to feed some loans that we have provided to get them back. So that's going to be part of it. So most of the funds are not going to be infused there, but I think there's not much of a 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. So we made some minor changes to the product. What's happened is that the products are still somewhat stuck at -- in the factory -- in their factory. If those products can go out, if those machines can go out, then we can convert them into revenue and get some money in. Obviously, we already part of it is in advance, part of it will come in. So the inventory will convert into cash, and it will also lead the way to recurring revenue. So yes, some improvements that can happen in terms of the manufacturing out there. But I think that -- I think we're close to saying that now this is the final change because there's -- again, I don't want to be critical for our own company and sometimes happen it's a new thing because we run in a very different way when you buy certain machines from certain types of Italian companies of a certain size that each machine is slightly different than the last. And then it becomes impossible for an engineer to go there and understand which machine is. There are major changes, but there are minor changes from each machine to each machine. So our take is that this can't happen. It has to be finalized. If you go to the customer, you should install it in one day and give the training and get out and it just runs. So you can't be like I'm going to go there and I'm going to [indiscernible] around with it and I'm going to make some things here and there. So because we are putting more of our own quality and customer level standards out there. Otherwise, they would have shipped out, but that's not acceptable for us. So I want to be quite straightforward. Again, it's nothing negative or positive about it, maybe people are used to doing business in a certain way or we don't accept that. So they have to comply with our laws as simiple as that.

And sir, what is our land -- so are we able to reduce the...

Vineet, May I request you to rejoin the queue, please? We'll take the next question from Saket Kapoor..

Yes. 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. But we have now made it a next day affair. So 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 will 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.

We actually prefer that, but then some people said they need time to study the presentation and the results before they can ask us questions. So I don't know there are different investors with different -- So I don't know.

In the paucity of time, I'm not taking a discussion. You have a similar set of investors participating in the call. You can -- the Kaptify can call us and get the feedback from us what is the preferred time since we people are participating and we people are investors also in the organization.

I Personally do that on behalf of Control Print. this is the end of the call for us. It's actually preferable to do all in one day. It's much better for us.

Yes, it is much better for us also, sir.

Okay. I got a different feedback, but I'm just telling you, Saket, that this was the feedback that we got. That's why we have changed to give everyone a day to study the results and the presentation before asking us questions. But we are more than open to going back to the old style. I'll leave it to Vinay to get the feedback and...

Yes, yes, yes. Sir, now, sir, taking into account the V-shaped 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. So what are the course correction that are expected going ahead? If you could just dwell further on the same?

Yes. So just so that -- okay, roughly speaking, about half the V-Shapes expense is in terms of R&D, okay? So the focus has been on shipping the R&D. So India is going to do the materials R&D and V-shapes will keep developing the machine technology and also extending our patents into other areas. So like, for example, we have a patent for taking our [ SNAP ] technology to powders. So we develop a thing where we develop a powder machine, which we not far from finalizing and selling, but we've taken the patents out on that as a concept. So that will extend until 2044. So 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 2 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 upfront. What they do is they'll pack 100,000 pieces or 50,000 pieces and try it out in the market and do things like that. And then if everything is successful, they will come back to us and then look at purchasing machine. So that's sort of where -- what they do is the second thing. And then the main business of course, manufacturing the machines. And their sales geography now is limited to Europe. And India is taking care of Asia Pacific and Middle East and Africa. Although 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. And so their costs are obviously in terms of 2 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. So I would say like if the R&D cost in the region of like EUR 100,000 plus a month. So what -- so obviously, we are expensing the same here. But that I mean, theoretically, we would have capitalized or something, but because this is a natural way of doing things, we -- so that's a big investment that we are making there. So 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. So that's one of the major differences there. The rest of the people are salespeople. We got a CEO who also looks at sales and some of the technical aspects, a couple of people want to 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 totally. So part of the R&D cost of not only our people, but also we have some consultants that we use and then certain kits and tools that I know that they keep buying some stuff here and there to check some stuff out. So that's sort of where the V-shapes [indiscernible] costs come from. Then what was the other question you had, Saket Ji.

Sir, I have a couple of them. I'll just put forward them and then join the queue. Firstly, about the new manufacturing unit at Guwahati. Kindly noted, sir, [Foreign Language], how are we going? I think in the packaging segment itself. So that has some correlation with the IP which we have purchased, I think so for the -- from V-Shapes. And sir, secondly, to be -- to endorse or whether to second to the views of Kesha 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 mind of your investors that we are getting derailed from the objective. And that is very well reflected in the type of peak compression that we see currently with respect to our current market cap also. So sir, although you -- in your presentation, you have spoken about, I think so Slide #8 speaks about 3-pronged long-term growth strategies. And then we have also spoken about long-term value drivers. We, as investors, only want things on ground to move in this aspect, and we would like to understand as we say in the Hindi terminology, [Foreign Language], how far are we away from achieving these 2 Slide #7 and Slide #8 and 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 join the queue.

Okay. So just looking at the first question, do you want to take this now or take at the end of the queue. If anyone else wants, I'll just take them now, they're fine with everyone or do you want to take that?

Sir, I think we can take a question from Saloni Arya from Molecule Ventures.

Keep those 2 questions there then, and we will address them.

Yes, sure.

Sir, I don't -- I joined a little late, so I don't know if my questions are,[indiscernible] I just say them out. First one, obviously, being related to the losses that we are undertaking in the subsidiary. So when can we expect these losses to subside? In the earlier call, we mentioned it's in H2 FY '27. So what is the trend we are looking at for the next 2 quarters? Second question is with regards to the Track & Trace business. So earlier, we used to mention the market size of this business to be around INR 500 crores. And 4 players are already in this. So what kind of a market share are we looking to capture from them? And basically, over the next 2, 3 years, what kind of revenue are we targeting from this segment alone? Is this going to be a meaningful contributor once the pilot commercializes? Or it will take longer than that? And we have never talked about the margin profile that this business can do. So if you could disclose that, it would be really helpful. And sir, total investment done in the V-Shapes specifically...

If you can keep your -- if I just can answer them because I'll forget your questions by the time I answer the first one. So you can understand I'm a 47-year-old guy with a very short memory. So the first thing -- the first question that you asked, I believe, has been answered. Saket has asked a similar question again. We're going to revisit this at the end of the investor con call, I believe, once all the other -- we have finished through the questions. And so it might be coming towards the end. So you have a patience, we'll come towards the end. Now the second part is about our Track & Trace business, which also has been addressed to some extent. So we started this about 5-something years ago. And again, I'm saying the same thing for the packaging business. It's been 4 years of investment in that business, creating the IP in that and sort of understanding where the market is where we want to be. And like you said, it is INR 500 crores, INR 600 crores business currently. The scope is there. But again, like I said, we're looking at redefining the way we are addressing that market. So it's not only conventional Track & Trace solution, which is we're already at a certain level where we are breakeven, if not profitable in the conventional part of the business. We've been working more on sort of an IP differentiated solution in that business. And like just so that everyone understands my way of thinking, like we had a [indiscernible] develop. We spent some money developing it. We found a team that had developed a blockchain-based Track & Race with the QR. We dumped our solution and we went from them and we have got that team, that team became our team in the [indiscernible] team. We invested more in developing the product around the. Thought was there we worked with them for the last 3-something years, and we put a lot of money in that. And we've developed our thing. We've given all our printing and other types of R&D and other expertise to contribute to them. A lot of the expertise that we've also acquired through Mark Print. So it is bringing different parts of Control Print together. And I guess we come to a level where we are breakeven if not profitable. I can't disclose that we are not [indiscernible] 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 then raised was what is the size of this business or what is the scope of what is the target market share. So for us, it's to create a product like when we are not afraid to -- we know that we can make the product, we can sell it as Control Print, we can do business and get a share. I think someone's bike is on and they need to switch off. So I think what we're trying to do is create like an IP differentiated solution, okay? We are not very content doing the same thing that we're doing. In the Coding & Marking business, we've done it. We've established a proper market share. We still got great option and great solutions in the Coding & Marking business, which is enabling us to continue growing. And so we've got a lot of [indiscernible] there. In other segments, we don't want to just use the Control Print reach to make a maiden solution, which could probably be profitable and give like a basic return on equity, but that's not our philosophy as a company. So in terms of where we're going to be in 2, 3 years or something, I think I pointed out that we've got like 2 pilot projects that we are running with 2 of India's largest pharm, amongst 2 of India's largest pharmaceutical companies. We're coming to the end of those pilots. If we feel all of us agree and maybe the customers but also that we are getting the results that are giving them a significant delta 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 significant growth driver for us in this year. But it will also sort of reestablish the standard of what can be done and what should be expected in a Track & Trace solution of the level that Control Print delivers. And we believe it will also affect the rest of the market and hopefully make it much, much easier for us. And we think that customers will 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 run the pilot. He's done everything, he's doing the market testing and he's finding it successful. So again, I can't give you exact numbers. We don't give predictions on all these types of things. In terms of margins, it should be -- I think like overall, should be able to maintain its margins overall. Like I said, it's -- 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. But if we can disclose some general stuff, we will more than be welcome to do that. But again, like I said, it's a very IP based platform, which is differentiated. And for that, someone has to be willing to invest time in understanding the differentiating point between us and our competitors or whatever is there right now in the market. So that's the second question that you asked. Now you want to ask another question, so please with that.

Sorry From my end, I'm in a public place, sir. So third question would be -- so you can't even give a 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.

So okay, I think some overlapping question. I think Saket hasasked some overarching question on this basis. If I can just cover this if you can make that a point, Saket Ji of your question, so I can specifically address that point, that would be.

Okay. Okay. Sir, just one last question on my side, sir. Basically, sir, this -- you basically said that once the negotiations are done, you will be coming out with a presentation on Track & Trace business itself. So when do you think we can expect that?

We already have one. We have a clear one. It's for customers. What our specific differentiating IPs are. Right now, we give to people under signed an NDA with us. So yes, we can put out a general purpose on our website, someone can do can just put it standard -- can you just put it up on the website. We can do that. That's not a problem. If anyone needs to get a specific thing of what we're doing with specific customer, we obviously can't disclose what we do with specific customers. But I'm sure a lot of you guys are analysts for some of those investors and some of those customers. Maybe you can speak to the customers directly, and they will be better explaining what -- because it's better to actually get it from their point of view, right? Rather than getting it my thing of what I'm trying to sell what I'm trying to pitch to them, it's better to understand what they are thinking and why they are doing this, how they are evaluating this type of purchase. I think that's far more valuable than what we might say.

Makes sense, sir. Just one last question. Size of this product, basically, we have said that it's top [ 300 drugs have been already mandated ] and government is increasing it to 1,000 drugs. But the execution on the government side has not been that strong. And as it is a compliance cost on pharma companies' point of view, so how much of a market size increase are we expecting in the pharma space for this?

So in the top 300 medicines, we're already doing like 20 or something 20, 22. But the government is going to come out with a notification in our discussion with the DCGI to make to 946 of the top medicines of India, Why 946? I'm not quite 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. So this is the discussion that's come out right now to send to 946 medications. The fundamental issue is that there's no standard in terms of the fact that we own a QR code, which goes to the manufacturer site to validate it, whether it's working or not. And 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 giving a false sense of security to the customers because you scanned the medicine. It's saying it's authentic, but it's not actually authentic. And that's really where our solution -- this is one of the main issues our solution is addressing at the heart of so that everyone knows what we are doing in a differentiated manner. So you get 100% accuracy, even if there's 1 million copies out there, each -- the one authentic will cover. And we also have some other parts which are because 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. So they can use all this data to manage a lot of their logistics supply chain, diversion issues and other types of things. So just so you get an idea, there is a talk to make 946 medicines, but there's no notification yet right now. It's just a -- so we don't know when it's going to come out to be this thing. And 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 giving customers a false sense of security that it is genuine. It actually -- it's not genuine. So it's not really helped so far. The objectives have not been achieved. So I don't know -- I know the government does not extend it. But at the same time, there's also like some more discussions of how the solution is going to be improved so that it's far more difficult for people to get -- make counterfeit copies of these types of medicines.

We'll move on to Samat Singh.

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 we would to get CP Italy to have a similar quality of Control Print. And hopefully, after that, post that, the backlog would be taken care of. So I realize, I guess, 3 months isn't a long time, but it seems that those issues are still continuing. So 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?

Yes. So Samant, what's happening is right now it's not so much of a quality control issue. What I would say we made a batch of 10 machines. Part of them are already sold, so a significant chunk of them are sold. Now the first machine that came was [indiscernible] customer. But some issues are there because the testing wasn't as thorough. So then someone -- the engine has to go on the order to make some changes to the machine. Now it's running fine. The second machine, we had to sell it 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 customers. So we have to send the machine that we have in our own stock for our core packaging to the customers there. So now the third machine or the fourth machine and the fifth machine are ready. But what's happening is that the first, second, third and fourth and fifth machine are all slightly different from each other. So they keep improving the machine. But my point is like all 10 machines have to be the same. So whether we go to directly to those old machines and the next 5 machines or whatever, everything has to be -- it has to be the same machine. It has to be tested, it has to work. I mean I'm not saying that I know it sounds like 101 or something to everyone like it's obvious. But the reality is that sometimes people make things and they make a product and then they make minor changes and they release the product, they make minor changes. So I think Tata had the same thing with their car like earlier, you released a Tata car and everyone is like the V2 is going to be good. So just wait till the V2 version comes out of all these cars and then buy the Tata car. And again, a lot of respect for Tata Motors and a company. Please don't take it in the wrong way. [indiscernible]. But has this reputation like 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. But for us, it's not possible to manage classrooms in multiple geographies, multiple things, send out a product and then make some changes to the fly. So our instruction is that all 10 machines have to be made, all 10 will work exactly the same, all 10 of the [indiscernible]the same parts, the same design, the same everything. So just small things like they can make a change in a part and they don't update the part with that same drawing. So that happens when we make like 10 new parts of that, we make with the old drawing. And someone has changed the drawing, like you've got a part, it's matching. It's not working because they got something with the thing. So it's just like very -- I mean, to be honest, frankly speaking, it's very small stuff. It's like what happens you buy an R&D output, frankly, which is posing as a company and then they're not really thinking in the same way as a company. So it's taken us a little bit of effort. But we have -- the thing is I'm not unwilling to send anything out that does meet our own internal standards.

Got you. And you mentioned that we are spending about, I think, EUR 100,000 a month. So that is -- so is that the main expense that comes about INR 12 crores a year. Is that the total expense for CP Italy A?

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

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

I understand. So I'm saying the R&D expense in the region of EUR 100-something thousand a month. Expense will be higher India, but of course that is more for the Coding, in 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?

Yes. So the direct wages are not very high. I think they like EUR 1 million or something maybe less. But it's difficult to say because we have a lot of consultants and other types of things, some people on contract because we don't want to take people. So...

So it's about EUR 750,000 a year. Yes, it's a total cost out of which R&D.

contractual cost, yes. And then R&D, other things will be all traditional. So yes, again, like I said, we do some stuff on -- like it's not the total cost. But yes, it's not a very huge cost. It's maybe like EUR 3-something million a year, somewhere between EUR 2 million to EUR 3 million a year to just run the show there. But yes, out of which EUR 1 million is R&D and I'd say like EUR 1 million to EUR 1.5 million is all the -- whatever the power, the sales team and a couple of logistics and admin team and a couple of guys for the product. There's a few guys in production and technicians and that type of stuff. So yes, maybe like somewhere between EUR 2 mil, max EUR 2.5 million will be like the fixed operating cost, assuming like there was no purchases or manufacturing like we just had the people sitting around with all types of things.

Is it possible to restructure some of the costs and bringing into the India operations because we're paying -- our tax rate on a consolidated basis is close to 40% at this point.

So there is some work going on, on that side in terms of the machine. But like I said, first, we need to make the machine 100%, say, like this is the final machine because otherwise, I'll keeping some new machine in India or some new parts of those machines in India and so on and so forth. So it's not like we are planning to reduce the size of that office because now it's really we have slimmed down and got all of the additional costs that are there. So we have 3, 4 people let go and some other things are there. But like all the additional fat or the nonproductive people and expenses have been cut. So you're going to see some more differentiation there. So it doesn't look like the costs have come down so much, but we've gotten rid of a lot of the nonproductive people and where the investments that we made is much more on the sales team and getting a much higher sales type output out there. And 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 and it's not going to change till we make a new version whenever we make a new version and update the car. So till I don't say that this is the Toyota Corolla 2024 and this is fixed and Toyota doesn't sign off that the Toyota Corolla 2027. So yes, we've got a machine. It's theoretically been fixed, but obviously, like the final thing there. So I think we are very close to the final stages of this machine being fixed, this batch of 10 coming out, us observing that. And then the plan is that between -- what's happening is all of these parts are bought from local Italian suppliers, okay? So it costs us significantly more than if we could source some of these parts through [indiscernible] base or manufacture them ourselves or at least negotiate with our suppliers if they have bought out things like specific motors and drives and things like that. So that's the idea to get the cost down in future batches. But yes -- and there's already some significant amount of work going on out there. I think because there's some minor changes, it's a little more of a difficult process. It will happen. It's just -- it's step by step.

We'll take the next question from Nikunj Bhanushali.

Yes. So firstly, I would like to know some numbers in terms of our acquired companies. So in Codeology and Markprint Mint 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?

We don't normally give it for the specific subsidiaries. I think in the annual report, whatever we disclosed whatever is required to be disclosed. I guess almost the entire loss or the entire losses on CP Italy of the consolidated losses outside of India. So just -- I mean, I guess that's an interesting point that everyone wants to know. But yes, the entire loss can be ascribed to CP Italy.

Sure. So 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. So expenses and losses are one thing. But what I want to really understand is what type of -- 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 breakeven and even profitable. So 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?

Yes. So again, we're expecting some growth there in a similar 15%, 20% growth rate, I think that's what we would expect there in both Codeology and Markprint. In CP Italy, I think there will be some better growth if we could sell some of the machines that we have sold, but actually like sell them by shipping them out, I think it would be better. It would have looked a bit better at least optically. So, for Codeology we have -- 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 are trying to -- integrate our own transfer in print engine. So what will happen is that will also lock the consumables for them and for us so that if someone buys a printer and apply whether from them or for us, the consumers business will come to us recurring in the future. Print and apply is also, although India is not as big a print and apply market surely is abroad, there is still -- it's a growing segment in India and is not there in this segment. So just in the recent sales managers meeting we had in April, we sort of did the first trading 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 rates. And 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 1.5 million or whatever they were, if they become double, it's not like the profits will become 3 or 4x. So it's a bit of a tricky situation there. And they themselves believe that the V-Shapes packaging business has the maximum amount of scope in the U.K. and those areas. So they will be doing the sales to U.K. and maybe even Scandinavia and Benelux or something like that and the co-packaging there. So they are more focused on scaling that up and scaling up a couple of our Coding and Marking products in their market. So we are actually going to make it more profitable by scaling down, reducing and 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, but the cost 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 marking business. So that's with Codeology. And with Markprint, they've already got some good contracts. Like I said, they -- what happens with these companies is 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 that -- those installations are like multibillion potential. So if that continues to roll out that without getting any new customers that they just continue to roll out, I think they will strongly grow at 20%, 30% a year. So that's fine. But yes, that doesn't mean, of course, we are trying to push them to get additional customers, additional things in the meantime. But yes -- so I think those businesses are less concern. CP Italy is the main focus for us because that's obviously where the losses are concentrated right now. And technology has been largely, I think, consolidated in Control Print. So we are using that now quite extensively and also in some of the solutions that we are providing our customers. So it has been contributing to us in the last couple of years. Now definitely, I think the level at which we integrated has increased, and we are providing at a much higher level to our customers.

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

For '25, '26, you mean to say?

Yes, for FY '26, yes.

Yes, it's about 3,064 printers.

Sir, we will take the last question from Hardick Bora.

Sir, just one point on the Coding & Marking business in India. Notwithstanding your -- the caution that you said that you need to focus on these 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 on profitability, printer addition, as Jaideep mentioned, we have 3,000-plus printers sold this year. The metrics seem to be pretty encouraging there still. So 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 and Marking business has meaningfully slowed down. That is why you're focusing on these new technologies? Or is just sort of abundant precaution. The Coding business is still doing well. You're just trying to preempt the slowdown that might come 10, 15 years later and hence, you're trying to seed these new technologies today. So just wanted to get a sense on how are you looking at the coding and marking business' growth potential compared to what it was, let's say, 5 years ago?

So 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? And then what is the market cap of NVIDIA and Microsoft and Apple and even new guys like Salesforce or Oracle or those types of guys who own the IPs and own the products or SAP or those types of guys. So where do we want to be? I think that's a fundamental question for. And yes, we're strong in the Coding and Marking business. It's generating the cash flows. It's our [Foreign Language] whatever you want to call it today, I'm not denying all those things. But that doesn't mean -- like at least for us, we still feel that we have that capability. We are one of the few companies that have a strong tech team out here. We're doing a lot of our own R&D and development for the last 10, 12 years. So we are confident of that path. So we are very much in a different sort of situation. Like I said, when we see even Chinese companies, they're able to create their own technologies. If I look at [indiscernible] or something, in all honesty, their products are fantastic. They created a lot of their own IP around telecom and other types of things or something like that. So I think if I look at pharmaceuticals, how many Indian companies in spite of being large pharmaceutical manufacturers for the last 30, 40 years in the generic space, how many of them have created new chemical entities. Besides Vokhart, I don't know of a single company that has created a sort of Phase III molecule, even focused on that business. I'm saying even focused on creating that business. So I think for me, the thought is very different. Like I said, it's not that the coding and marking business is bad. It's that we have that capacity 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 like, I'm getting a comfortable growth in the Coding and Marking business and I focus on my lifestyle and that other type of thing. I think our team is still strongly motivated to keep doing -- pushing our own boundaries. And then we understand that there's a certain lumpiness up and down that's going to come with that, especially the size of the company that we are. We could manage it much easier in the Coding & Marking space. I said when I look at the fact that we probably like INR 100 crores, INR 150 crores in royalties over 20 years and if I look at the today's cost of that, and I look at the present value of being INR 3 crores, INR 4 crores, 20 years down the line, INR 8 crores, INR 10 crores, whatever it is, after we negotiate the agreements down. And those royalties have come down because we've developed some of our own technologies in the way, right? So we don't need to license them anymore. So CIG, which used to be like 90% of sales, now like 60%. So 40% is at least is our inbuilt type of solution. So what's happening is that we are -- I like my own experience, my own feelings are coming from a very different point of view. And again, like I said, and that doesn't mean the Coding & Marking business is bad. It's a good business. But yes, I could be comfortable with being -- and I'm not saying this is a threat. Like I said, I think like whether people look at AI as a threat or I'm not getting into that part. But 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. I don't think legislation is going to change fundamentally to sort of make batch and other 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 the same thing for the pipes and the cable, the pressure ratings, the information, like we're building a lot of basic stuff out here. So I'm not seeing this legislation changing at least in the next few years. But of course, like I'm not on the government side, I can't see anything. I don't know how they evaluate what needs to be done or not to be done. But 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 we have -- so that opens up a new avenue for us, which is a combination of digital printing, Coding and Marking, part of our Track and Trace offering also. So that's a big area we've opened up. It's a sort of hybrid area. We've got into the Track & Trace area. We've been investing that in the last 4, 5 years now. And that's somewhat at a certain level, although it still needs more focus, more investments to continue developing that so that it clearly is a strong product. So just to give you like a larger picture on what's happening because the Coding and Marking is not bad, and I think that it should be that it's going to be the strong base, which is going to give us that space that we can create other platforms. But we -- so -- and I don't think that that's going to change. And neither is it a bad business to be in, but neither is it like -- if I want to be a different level of business, if I want to be a different level of IP platform, then we have to actively target these opportunities that we've undertaken right now. And like I said, I'm focused on making maturing these opportunities before obviously we even think of doing anything else. So I give that assurance to that. First, we will mature these before we even think of something else. Once they're profitable, they don't even think of something else going forward.

Shiva and actually, as investors, we are encouraged that you are exploring these new areas. The objective of asking the question was that are we like the Infosys and TCS 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. But yes, all the best to you on these new ventures and hopefully, we start seeing them bearing some fruit soon.

Address those 2 questions at the end, right?

Yes. So Saket was going to -- if you can just put those questions again, Saket, just one question at a time. Yes, what is the Ui question? And the investment in the Guwahati facility, is that correct, saket. Okay. I believe the first question was the investment in the new factory in the Northeast. So like I said, one of the bigger longer-term issues with our current setup of the packaging business and the cost of the packaging material. I agree that some questions were asked, I did say, yes, there's some slight issues with the machine finalization as of right now. But one of the other big challenges in the long term, especially the large customers is the cost of the material. Still very approximately cost like INR 2-something a pack for the cost of the packaging material between -- it's increased a bit this after this [indiscernible] all. It's going to cost about INR 2.5. When we make it in Guwahati, we believe we can sell it to the customer almost for 40% less. So what is INR 2.5 now will be INR 1.5 almost NR 1 now to be like about INR 1.25, INR 1.30. So we believe that, that's going to actually make a much bigger explosion in the market. A regular sachet cost about INR 0.40 for a bulk customer like Unilever who makes Dove, something like that SunSilk or those types of things in bulk. We will be about INR 1.20 to INR 1.30 in that type of large-scale customer. Again, it's never going to make us go on the INR 2 packet or maybe up to the INR 5, but we will be very competitive in INR 8, INR 10 packet. The other part that we think is that in the foreign markets, EUR 0.01 or whatever it is really not a big deal for them. So even for a Ketchup and sort of cheaper products. So I don't think for them, it's going to be a different type of situation. So we needed to invest in the materials. And of course, that's also part of our business model. We -- it's a little bit -- we're selling the machine, of course, the packaging machine. But in fact, out there, the materials business will give us -- when you look at the value of the -- how much margin we're making on the machine versus how much we're making on the material in year 1, obviously, the machine is the main business. But when you look at the fact that we're going to make money on this machine for the sort of 15-year life and even if it runs like 10, 12 years on average, like 15, 20, years, you're going to make money on this machine, a little bit of money on this machine for 10, 12 years, then the value of the materials is significantly higher than that of the machine. So the machine -- it's like a jet engine or something, like you sell an engine and you make the money is as much in the parts and the upgrades and the services and it's the same thing as like ink jet printers or stuff. Definitely, there's a value in selling the machine and the margin that we're making in it right now. But we're going to make more money in the materials down the line. By making the materials cheaper, we believe that the margin -- the volume of the business is going to increase exponentially. And as a result, the scope of what we can -- how much we can service the V-Shapes business is going to increase exponentially. So that's the primary purpose of putting up this Unathi factory. We are putting some Coding and Marking bits out there. This is to accelerate the revenue right in the beginning. It's not that our Guwahati facility is like per se running out of capacity. We could have done these minor expansions in Guwahati. We're doing them instead in the new facilities so that we maximize the incentives on offer. Does this the Unithi question, the North East expansion? Think that's the question.

Yes, that was the reason -- 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 will be enjoying the benefits. Some color on the incentives also would have suffice or I'll take it offline later.

Okay. So the benefits are you get INR 7.5 crores back on a INR 15 crore investment margin. If you go beyond INR 15 crores, you still get only INR 7.5 crores back so it's capped at that. The second benefit is that you got a 5% interest subsidy on term loan for a period of ...

6 years.

6 years. The third benefit is that equivalent to the plant and machinery investment, you get excise or rather a GST refund of the same over 10 years. So suppose if I invest INR 50 crores in plant and machinery, I'll get back INR 5 crores of GST refund a year every year for 10 years. Obviously, in present value terms, that's less than INR 50 crores, but there is a benefit to that. So we are already in Guwahati. We probably wouldn't have gone for the scheme if we were already there, but it's not far from our existing block. We've had a lot of experience working in the Northeast, so we didn't feel any risk in going to that area. And the logistics costs are quite well covered because there are some separate -- minor subsidies on that getting the freight from somewhere in the Northeast to, I think, Siliguri or Bengal or some place like that. So it's not really a concern. So 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 doing something right outside Bombay, or somewhere. That was the option.

Okay. We'll close it here now. Thank you to all the participants for joining on the call, and thank you to the management team for giving us their time. This brings us to the end of today's conference call. Thank you.

Thank you very much.

Thank you.