Control Print Limited (NSE: CONTROLPR) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Unidentified Speaker
Shiva Kabra — Joint Managing Director
Jaideep Barve — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
Unidentified Speaker
Yeah. Shiva. Shall we begin? Hello.
Unidentified Speaker
Let me call Shiva. No, he’s dead.
Unidentified Speaker
I think he needs to unmute.
Unidentified Speaker
So the console is not with you, is it? To mute unmute?
Unidentified Speaker
No, I cannot unmute him. I can ask him to.
Unidentified Speaker
Let me just call him.
Unidentified Speaker
Yeah. Yeah. Shiva, can you hear us?
Shiva Kabra — Joint Managing Director
Yeah, I can hear.
Unidentified Speaker
Shall we begin?
Shiva Kabra — Joint Managing Director
Yeah, we should. Sure, sure.
Unidentified Speaker
Yeah.
Unidentified Speaker
Just get the recording started.
operator
This meeting is being recorded.
Unidentified Speaker
Ladies and gentlemen, on behalf of Captify.
Unidentified Speaker
Consulting Investor relations team I welcome you all to the Q3 and 9 months FY26 post earnings conference Call of Control Print Limited. Today on the call from the management team we have with us Mr. Shiva Kabra, Joint Managing Director and Mr. Jaydee Barbe, Chief Financial Officer.
Unidentified Speaker
As a disclaimer I would like to inform all of you that this call may contain forward looking statements which may.
Unidentified Speaker
Involve risk and uncertainty. Also a reminder that this call is being recorded. I would now request the management to.
Unidentified Speaker
Brief us about the business and performance.
Unidentified Speaker
Highlights for the period ended December 2025. The growth, perspective and vision for the coming year. Post which we will open the floor for Q and A. Over to the management team.
Jaideep Barve — Chief Financial Officer
Yeah. Good afternoon everybody. My name is Jayanti Parve and I work as the Chief Financial Officer of Control Limited. Welcome you all to the earnings conference call for the third quarter of FY25 26. At the outset let me wish you a happy and prosperous 2026. We appreciate that you have taken out time from your busy schedule to attend this call. Mr. Shiva Kabra, the joint Managing Director of Control Prehid also joins me on this call. For first time joiners on the earnings 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 the website as well as in the in presentation notification on the for this call. So let me provide you some highlights of the performance of CPL on a consolidated on on a standalone basis for the third quarter of FY 2625 26. On a standal basis the the total revenue till Q3 is approximately 322 crores which is a good growth. From approximately 280 crores till quarter three of FY 24 25. Just for information, the total revenue for FY 24252324 and 2023 was rupees 395 crores, 347 crores and 295 crores respectively.
Regarding the operative revenue this is one hundred and nine crores for the third quarter corresponding period of FY 2425 this was 94 crores. Coding and marking represents 92% of the business. There is There has been steady growth in the coding and marking segment. Pipes, food, healthcare, dairy, steel and metal, cable and wire continue to be our top performing business verticals. We are market leaders in cement, plywood, sugar and dietary. The business outlook remains bold for the Tack and trace division in FY2526. We have developed new solutions and acquisition of new customers has been another plus point.
We are getting good traction in the CO packing activities. In the packaging division, a pipeline is also being generated for new machines, laminates and co packing. The mask lab has now been re established into a safety division along with masks, hard hats, arc flash suits, helmets, gloves, banquets etc were also sold this quarter on a standalone basis. The cost of goods sold is around 41%, 42% 43% of the operating revenues in Q3, Q2 and Q1 respectively. Just for comparison, for the entire year of FY24 25 the COGS was approximately 42%. That said, we remain committed to optimize the procurement costs and also look closely into the economy, efficiency and effectiveness of operations.
This we feel can definitely lead to reduction in the operating costs thereby increasing in the gross margin. Manufacturing costs are approximately 2% of the operating revenue. In the earlier periods this was around 3%. Employee costs are 19%, 16%, 18% of the operating revenue in Q3, Q2 and Q1 of this year respectively. Depreciation is 4% and this is in line with the previous periods. Other expenses are 14% of the operating revenue in 16 the Q3. On an annual basis this has remained steady at 13 to 14% in the previous periods. Overheads will also be closely tracked with aim to increase the overall profitability of the company.
The EBITDA growth is at 21%. YoYo PBT excluding the exceptional items was at 35% yy growth. The pack growth was lower at 19% due to higher tax provision in this quarter. The way forward we wish to consolidate the existing coding and marking business. We would like to increase the install base, provide more robust solutions. An increase in prices has already been implemented. We want to develop new solutions and capitalize the available market opportunities in the track and trace segment. Similarly, the packaging business both in India and overseas will be closely monitored and the emphasis will be towards increasing machine sales, CO packing and the laminates.
The overseas subsidies will definitely be continued to monitor with focus group targets. We have already provided them business plans and they’ve been asked for execution
Jaideep Barve — Chief Financial Officer
I now leave the floor open for questions.
Questions and Answers:
Unidentified Speaker
We’ll be happy to address them. Thank you sir. We’ll now begin the question and answer session. All those who wish to ask a question please use the option of raise hand. We’ll wait for a moment till the question queue assembles. We’ll take the first question from Mr. Saket Kapoor. Please go ahead.
Unidentified Participant
Yeah. Namaskar jee ji. Namaskar Shiva sir. And thank you Captify team for hosting the call.
I hope I’m audible.
Unidentified Speaker
Yes, yes, we can hear you.
Unidentified Participant
So Shiva s firstly if you could just explain to to us all the investors how have our foreign subsidiaries and the consolid results performance what factors have again led to these lower profits on consolidation and what’s the roadmap ahead for you? And I’ll just come up with follow up once you start answering.
Shiva Kabra
So last time I said that, you know we should have a lower loss in this quarter and almost like a break Even in the Q4 in our foreign subs, meaning the Italian one. You know, codiology and mark print are like combined about break even. So it’s not that important. And what’s happened is that we had, you know, we’ve come out of the new model or a new machine, a new packaging machine in Italy. But okay, so what happened in the past? I’ll explain it to you. It’s a long story. The reason why, you know, a lot of these machines were sold in the past and I think that the quality control and that, you know, Getting from a 90% machine to 100% machine takes a little bit of more effort.
So what happened is we didn’t want to make the repeat the same mistake. So we’re you know, using more for control print style of quality control and working out here to make sure the product is extremely reliable and robust because if that doesn’t happen, you know, the customer is not going to have the confidence to take the production on it. So we’ve not been able to execute orders or like besides one machine or something I think in the last quarter or this, I mean Q3 and Q2. So because of that we have a little bit of a backlog.
So it would, the numbers would have looked better if we’re able to execute the orders and book the revenue and then of course the profit. So now we are almost like we’re pretty much through the machine. We got that first one out, we got the second one for the, for the first time in Italy I think they’re making two machines which are exactly the same and if this happens and hopefully we should start actually executing a few of the orders we have. Like, you know, rather all the orders we have which will help, you know, make the numbers in Q4 and maybe, you know, Q1 of financial, you know, whatever this 26, 27, better.
So I’m expecting that it’s not like we’re not on target, but there’s some, you know, there was some execution issues, you know, where we, as a company, you know, I mean, obviously for us, the technology is first and then comes all the other aspects of it. So as we do that, I think that, you know, we’re gonna get a much better result going forward. So. And it’s so, like, I think the results are slightly worse than the reality. But, you know, like I said, it’s not like we’re not losing money, but we should have been losing less money than what we were.
So I don’t think we’re too far off our guidance. I think I said something like a million, something euros. Maybe it’s more like a million and a half. But we’re not. We should do better.
Unidentified Participant
Sir, to, to just understand it. It is the, the lower absorption of cost, fixed cost, that has resulted in these lower profits on a consolidated level. And, and going ahead with the dispatch of the machinery, which is. Which is there in the order book and already ready to be dispatched, we will be seeing better operating number. This should be. This is a correct understanding, sir?
Shiva Kabra
No, that’s correct. That’s correct. So, I mean, I can also tell everyone, see, we have like about €800,000 a year R and D cost in it. This is like the direct R D. You know, people are just assigned for R D only and something else. So there’s also other expenses associated with. So if you, if we actually, you know, whatever R D they’re going to do is going to benefit us globally because those same products available for sale in India and Asia Pacific and, you know, maybe in the future, North America and other places. So I will say that it’s also, you know, because we expense all R and D, we don’t capitalize anything because this is what we do in India.
And, you know, I think Jaydeep may be better results. I. I do think that also, you know, and I don’t want to make an excuse that it’s an accounting style or anything because we followed this for a very long time. So I think. But it’s also making the Italian performance look a bit worse because they’re not proportioning the cost of their development to the other areas where the machines are being sold. So that’s where the difference is. But the technology is benefiting Control Print worldwide, if you are. Worldwide, but all the costs are being a portion to Italy.
So it’s also making them look a bit worse than what they are.
Unidentified Participant
Thank you, sir.
Shiva Kabra
Yeah, thank you.
Unidentified Speaker
Yes, I request all the participants to limit their questions to two per participant. We’ll take the next question from. Please go ahead.
Unidentified Participant
Thanks for taking my question and congratulations.
Unidentified Participant
On good set of the top line numbers. So my question is to Mr. Shiva Kabra. We spoke in July when you said.
Unidentified Participant
That the gross margins were impacted due.
Unidentified Participant
To, you know, the higher raw material cost in the packaging business. And at that time you had said that you’re doing some R and D.
Unidentified Participant
Wherein you are trying to crack something.
Unidentified Participant
Wherein which can help you in some.
Unidentified Participant
Cost saving and that could lead to better gross margins. So now when we see the numbers, the gross margins have actually become better. For the consolidated numbers us but then. The EBITDA has actually gone down. So I just wanted to know like what exactly is the scenario over here?
Shiva Kabra
Yeah, so to answer your question, what the situation is as such, we’re still working on the development of the single polymer recyclable material. It’s now under final trials. That’s also one reason the machines have been delayed, because the machine needs some modifications to work with this material. It doesn’t work at the full speed, but it at least gives us an option of recyclability. So as a result, you know, that is also, like I said, by parting machines are delayed. Now we are purchasing the materials from elsewhere and selling it, reselling it as per the customer’s requirement.
And definitely when we manufacture the material it will be cheaper. But also we are more focused on the recyclable material. So the margins have not changed much in this meantime. If anything with the euro going up or something, I don’t know exactly something or the other, it might have slightly increased, our prices would have slightly increased but you know, with a slight lag. So I don’t know if, I don’t know till now if there’s any benefit of all of these things. I think it’s going to take another four months because we have some pilot line that we are starting in Nalagarh and which will shift later.
So okay, so but the line itself will only be delivered in, in March and probably by the time this commission is going to be like April, May. So it’s more of a pilot line but we’ll still be taking some production out on it and relatively cheap to operate. It’s just a lower volume, but we’re talking about our volume. It’ll still work. The second question you had one was the margins and then you said something about the EBIT does not flow down to the er. So yes, there is a question that’s there and Jeep and we are looking at very closely because the other expenses and the employee costs have increased sharply.
I know some part of the employee cost was something like gratuity and some provisions or something that has been made which Jaydeep will give you a better read on that. So that’s some part of the salary cost. But even if I take that out, there is a salary, there’s a significant employee benefits cost increase. And the second part is that the other expenses have also increased. So we are actually taking a look at both of them, you know, quite closely. Jaydeep, I don’t know if you got that number somewhere in this presentation, but so yeah, so the gross margin, okay, it’s sort of dipped to 58.1% from the previous.
But I wouldn’t give it too much importance right now. What I think is that the more important thing is that both the cost increase, the other expenses and the employee benefit expenses. And now I said, like I said that some part of the employee benefit expenses was some sort of increase in some sort of provisions, which I will tell you. And then the bigger part of the cost is there’s some. A major part of the cost is an increase in the employee benefit cost. So we need to really go deep into that, to be honest, to understand what’s.
Where all these things have happened from and how this came about. And then the other expenses also increased. So on both of these things, you know, Jaydeep is doing a deep dive. So he’s. Maybe, maybe jaydeep can answer that question.
Jaideep Barve
All right, that’s what quite helpful. Essentially, broadly, you’re trying to say that at a gross margin level, the projects.
Jaideep Barve
That we were, you know, trying to say it’s yet to be fruitful, it is going to take like another four.
Jaideep Barve
Months to another reflected into the gross.
Jaideep Barve
Margin, if I’m understanding it correctly.
Shiva Kabra
Yeah, it take four months to introduce the product and then obviously once we introduce that and our cost of manufacturing significantly lower than obviously what we are importing from Europe is basically much higher than what we get from here. So, you know, it’ll definitely make the margins better. But what’s important is the volume of the business should increase, you know, in the meantime for which the machines need to be placed and work perfectly. So I think that that’s also. So both things are important, but the, yeah, the margins will improve in the packaging business as a result of manufacturing locally.
Unidentified Participant
All right, thank you so much. That’s very helpful.
Unidentified Speaker
Thank you, Rishikesh. We’ll take the next question from Vikram Hirawar. Please go ahead.
Unidentified Participant
Hello everyone. Good afternoon. My question is to you, Mr. Shimad. So this is more product related. I was wondering if laser printers pose any significant risk to the consumable business. Now I’m aware that Control Print does manufacture laser printers, but they don’t from my assumption, they don’t really have the same sort of recurring revenue from consumables. But once you supply that, there’s no ink that goes into laser printers. And I’m pretty aware that certain industries are. For example, the pipe industry is now using laser printers for marking, for marketing solutions.
Is laser printer a threat to the consumables business or to the, or to the inkjet printers?
Shiva Kabra
Yeah. So if I can answer that question. You know, the lasers have been around for about two decades now. And I don’t deny that, you know, at least what I’ve seen in the 90s they, or even in the late 90s they started, you know, especially in certain high speed bottling lines and certain things. So they have some fundamental limitations. And I’m gonna go through this. So this is technical. So the first thing is they don’t work on all materials. Okay. The second thing is they don’t give a contrast. So for a lot of people who want a branded type of print, they’re not going to get a contrast.
Like you said, when you print on a pipe, it won’t give a contrast on it if it’s a LLTP trip or HTTP drip irrigation pipe. What it’ll do is like an engraved print, which doesn’t work for most people’s branding. The third issue with or for our own purpose in terms of the laser business, you know, it’s a different model because there are less people. So the cost is less because you also need less of a service thing. But there is also an AMC element to it. And the lasers have a life of about five years.
So what you do is the frequency of replacement of the lasers more or common, more frequent. And, and there is like an IB in terms of, you know, maintaining the fume extractors and changing the filters of the laser and doing some other things. So there’s not a direct consumable. It’s more of a service type of a contract. And A spares contract that or the services and spares that you’re selling and then the life of the machine being a bit less, you keep replacing the machine every, you know, four or five. I mean of course in a pharma industry and certain other things with the low usage it might even be seven, eight years.
But fundamentally in most companies you replace like every four to five years. So from a earnings perspective it’s not that much different to us. But yeah, there is an element in both things. But the most important thing, that the lasers don’t work and everything. There’s a big safety issue with lasers. Specifically when you mention pipes, you know, all chlorinated compounds or halogenated compounds, you know, iodine, bromide type compounds, chlorine. What will happen is the moment you use a laser on it, it will create a chemical reaction on the surface. So it will for example, release chlorine gas, you know, on the, at that point of time and the chlorine gas will attack someone’s throat and eyes and also convert into hydrochloric acid by reacting with the moisture in the air.
So both things are very dangerous now in India. So if you look at the laser fundamentally It’s a Class 1A safety, you know, that’s around it. It comes under some IC rules. I’ve got all the technical details but I have to, you know, explain later. So the laser needs to be completely enclosed. It releases a whole bunch of small micron sized fume particles when you print. So we capture them, the fume extractor, but still some are released. Now what happens is like abroad what you’ve seen is that the laser is growing but it’s not increasing because in a lot of lines people find it a struggle to enclose the entire line.
You know, so if I have a form filled seal machine or even a pipe machine where the lasers there, it needs to be enclosed completely. It needs to be that if the safety is open, the entire line is interlocked. So the laser will switch off at the power level itself and the line will stop and so on. So in India none of these things are being followed even though we are also part of the same rules. So I don’t know what’s going to happen. But you know, in general when we talk to the larger customers, yeah, and I agree that even they look at other people.
So I’m not sure what’s going to happen. In general I will say that even the so called big companies out here don’t follow the same sort of safety norms that they will in their own home markets, offer Europe and America or something. But you know, I think they’re more cognizant of these issues. So I think even as awareness grows, these things will happen. So in the pharmaceutical industry, again, you know, when they have a lot of particles out there, it’s in a clean room environment. So they have issues sort of using lasers. So there are, you know, pluses and minuses in this whole situation.
It’s a very technical, you know, question of what you’re asking. But fundamentally, whatever we are seeing abroad, you know, in Europe, in Japan, in America and of course also in India, that the Chinese guys are very aggressive in using laser for everything without any safety measures or any thought. But elsewhere in the world people are much more circumspect, you know, cognizant of the safety issues and the technical issues. And the other thing with the laser specifically on some materials it will, because of the thermal energy, it sort of engraves into the material. So when you have certain thin materials or with the barrier property is very critical, it will also cause pinholes in that material.
So like I said, there are multiple issues. We’re also in the packaging industry and people are being forced to use more recycled material. Even though nobody’s doing it right now. But that’s going to happen. So what happens is the recycled materials behave differently than the version materials. So when you print on the recycled material, you might not get the same print quality, might be much more uneven. So you know, the various pluses and minuses in this whole aspect. But you know, I, I think laser will keep increasing at a gradual rate. I think for us in our business model it’s not really an issue.
But I don’t see from your fundamental question, like I said, been around for a long time, unless there’s some method of overcoming especially the safety issues and then the issues in terms of contrast on the material, you know, there’s no, I don’t see it ramping up very fast.
Unidentified Participant
So to sum it up, you’re saying.
Unidentified Participant
That.
Unidentified Participant
For now you don’t really see a big threat to the fundamentals of the business. And also there’s some sort of industry risk or substrate risk and you cannot really apply laser to every particular product is what I’m trying to, is what I’ve understood.
Shiva Kabra
Yeah. So the laser is restricted definitely to certain products where it’s like I said, certain people specifically because you mentioned pipe. I’ve answered that. I’m saying in certain places people can use the laser, but it has safety issues. So some people are still using the laser. So you can use it on LLDP drip irrigation pipes, for example, but you can’t really use it on any of the pvcc, pvc, UPVC or any of the chlorinated pipes, you know. So I’m just trying to say that there is a element to the whole thing. On a LLDP drip irrigation or HDP pipe, when you do it, you need a lot of energy to get a small engraved print.
Now, for a lot of customers who want to brand their product, you know, the contrast, they want much more contrast and visibility, you get my point. Because if it’s just for internal traceability, that type of print is fine. But if you want that, the customer should know that it’s a supreme pipe, for example, you know, and see it, and you want a Jacas logo or whatever, you know, then you need to have a high contrast print on it, which you can’t get with a laser. So what I’m saying is there are multiple issues in the laser adoption and therefore the laser has picked up slowly.
In China, it’s picked up faster because in certain cases, a lot of cases, most cases, they are ignoring a lot of safety related issues around the laser or the safety regulations that are already in place. And you know, obviously, but it’s still, even in China, you know, the coding market has not decreased, you know, per se, it’s just maybe a higher percentage of lasers has happened. But the rest of the market, even including the cig market, is still growing or at least stable.
Unidentified Participant
Okay, all right. I, I think that’s, that’s. You answered my question. Thank you so much.
Unidentified Speaker
Thank you. We’ll take the next question from Ansh Imawat. Please go ahead.
Unidentified Participant
Hello, thank you for taking the question, sir. So building on all the previous participants question, just trying to understand as to where was the delta and the gross margins and the employee cost. Can you just throw some color on that? Also on the other expenses, there is a lot of background noise coming from. I’m sorry, can you hear me now? There’s background noise. Just a moment. Yeah, Is it clear now?
Unidentified Participant
Hello?
Unidentified Speaker
Yeah, better now?
Unidentified Participant
Okay. Yeah. My question was regarding the decline in gross margins and the increase in employee costs and other expenses. Can you just throw some color on that as to where have we seen the delta over there? Apart from the Graduate and the other provisions that we’ve made, there seems to be a considerable movement in the employee costs per se. So that would be my first question.
Unidentified Speaker
Please.
Shiva Kabra
Yeah, hi, I think I’ll take this question. So what’s happened Is that as you rightly said, the employee costs have risen in the Q3 as compared to the Q2. And that is basically mainly a reason of adjustment of provisions. So you are aware of the new labor code which has been mandatedly applied so since 21st of November. Now we are under the new regime of the new labor Code. So as per the bandit given, we have to absorb all the past service costs also. So we had a major impact because of the gratuity provision. And also we made some kind of staff incentive provision.
So that’s the result. Why you know like the staff costs, the employee costs have risen. Other expenses are on the higher side. But definitely we are looking at most more cost control measures like basically business promotion expenses or traveling expenses have grown as compared to the past quarter. We would like to you know like concentrate more on the you know like control aspect. And definitely we are will try our best to you know like get a reduction on this and optimize the cost. So in the Q4 we’ll make sure, you know, the results are better in terms of the overheads as well.
Unidentified Participant
But sir, in your note 5 you have said that there is no material impact on the new labor code. So there seems to be some kind of a mismatch over here. Sir,
Shiva Kabra
I’m not getting the last thing.
Shiva Kabra
Unsure.
Unidentified Participant
I’m sorry, I’m saying sir, in your note number five to notes to the accounts you have mentioned that there is no material impact to because of the labor Code. So just trying to understand this to then
Shiva Kabra
no.
Unidentified Speaker
It may be increasing in terms of the delta but it’s not a material impact on our overall results. Do you understand what I’m saying? If you’re saying like the increases, what I think is your. Because I don’t know what the exact numbers are there but I think that the employee cost increased by something. But okay, so about a couple of crores was the provisions is my approximate idea. It explains part of the delta like he said, but it doesn’t explain the entire delta. That’s what I said before. But it, if you take out that amount then you know, the delta looks less but it’s not material.
Now overall results, I mean you have to be honest about that.
Unidentified Participant
Okay, and so my next question would be on the impact on the India EU fta, where do we see ourselves placed because of this and do we see the foreign players being able to enter the market per se and being able to take our share in the market? Can you get some color on that as well?
Shiva Kabra
I can’t hear you clearly. Could you please repeat this again?
Unidentified Participant
I’m sorry, is it better now?
Shiva Kabra
A bit better now, yeah.
Unidentified Participant
Yeah. I was just asking regarding the India U fta, do we see any foreign players entering the market post this fta, do we see any kind of movement coming from Europe in this space? Do we see any like anyone taking a market share, taking our business from us? Can you just throw some color on this?
Shiva Kabra
It’s absolutely of no consequence. Either way we make our exports a bit cheaper. I don’t know actually what the duties were previously on stuff from India to them, the three main competitors, videojet, Domino and Mark, all manufactured in China primarily. And then Domino and MI have a assembly line right at the end for here. So they get the entire kit and they get like a sort of CKD or SKD or something and they just assemble it here. But since none of the three manufacture in the Europe anyways to begin with, none of the imports are going to come via Europe.
So I don’t think that fundamentally anything changes. And more importantly in our business, like I said, it’s a sticky business because most people have a printer, everyone’s competitive, the service network needs to be there, everything else needs to be there. And those are I’d say the most important critical factors for people to be successful in this business. So I don’t think we are going to benefit much. I don’t think we’re going to in any way be impacted definitely negatively. We’re not going to be impacted negatively. I don’t think it makes a difference to our three key competitors.
Yeah, I, I don’t see this not really having an impact on our business.
Unidentified Speaker
Thank you.
Unidentified Participant
All right. Thank you.
Shiva Kabra
A one year long down the line. If it happened before, it could have helped a little bit in that the packaging machines and the packaging materials that we import from Europe would become a bit cheaper. But by the time I think this FTA is ratified, we’ll already have our own production of the packaging material. So I don’t see it being useful in that aspect.
Unidentified Participant
Okay, so that’s it. Thank you.
Unidentified Speaker
Thank you. We’ll take the next question from Vinit Thakur. Please go ahead.
Unidentified Participant
Hi sir. Good afternoon. Thank you for the opportunity. Sir, I actually wanted to know a couple of numbers. So what would be our segmental performance in in volume as sales volume? What would be the sales volume of printer and installed base for nine months? So Shivak, I can answer this question. The printer sales for the nine months are a little over 2100 printers and our install installed base is about 22,000 plus printers. So what’s our revenue breaker by region and by segments.
So within the coding and marking we have four different streams of revenue. So one is the printers with the consumables, then the spares and the services. So the breakup for the Q3 is 18, 58%, 7% and 15%. Oh, thank you, sir. And so what would be our opinion about the Europe operations? When can we see a reversion of EBITDA margins?
Shiva Kabra
Yeah, sure. You want to take this question?
Unidentified Speaker
You just please repeat that question. I couldn’t. It got a little bit cut off.
Unidentified Participant
I wanted some clarity. So since we were doing at Euro 24.
Unidentified Participant
Am I audible, sir?
Unidentified Speaker
Yes, yes.
Unidentified Participant
We were doing 23, 25 and 24 and FY22 to 24. And since Europe we have fallen down to around 19%.
Unidentified Participant
What would be.
Unidentified Participant
When could we assume we could get.
Unidentified Participant
Back to the original margins or we could stop bleeding money at Europe operations?
Shiva Kabra
So I think, okay, I mean I cannot say anything to everyone but like if I look at on a standalone basis, which is what is more important for us now, even the standalone basis carries. Like I said, the track and trace business is breakeven. It might even be making money depending on how we apportion the overheads, it’s making money. I’d say on a marginal basis it’s profitable. Now the packaging business, even in India and Asia is loss making as of right now.
And obviously in Italy and stuff like that, we have a much bigger losses that we are taking on that account.
Shiva Kabra
Now.
Shiva Kabra
There are three different businesses fundamentally or four different businesses. One is the coding and market. I’ll put the digital printing in that. That’s like one business that is still growing. The profits out there and the margins are consistent and the profits have increased. Although we are still doing a breakup exactly of where the other expenses and the employee benefiting expenses have increased. But we believe that the business has grown further in profit in line with the revenue, if not more. Okay, I don’t want to give the exact breakup because you’re not providing it in the presentation, but fundamentally that business is gross margins and revenue.
There’s revenue growth of I don’t know, like 14, 15%, something of that sort. In the standalone business, some part of it has come from the packaging and the track and trace, which have grown faster but from a much lower base. And that business is, is a profitable business. And the margins are increasing because our costs are not increasing that fast. But we’re doing exact checkup because the other expenses is something that we are confused about because we’ve not looked at in that depth. From the employee cost, I can say most of the employee costs which have increase, have increased in the packaging business, maybe the track and race business and the other things and especially the international business.
Now as the packaging business, you know, ramps up in volume, like I said, we get past some of these technical niggling issues which we believe we’ve resolved and we able to execute the orders in this quarter and the next quarter. It’s a slightly lengthy process because even the machine is now fixed. The customer still has to come to the factory, do a factory acceptance test and all these other types of things which is a bit of a different, longer drawn out process as compared to, you know, what we do in our coding and marketing business where we just, it’s like a ready made product and just ship it.
So my view is that, you know, as the packaging business moves up in terms of revenue and I do believe that in Q3 or Q4 of this financial year, this coming financial year, even in Italy it’s going to be break even and in India it’ll be profitable hopefully by Q1 or Q2 of next year or Q1 of next year. So I think as that happens and the losses of the packaging business come down the cons, even if we’re not making money, the standalone and the consolidated will sort of merge, you know, so my, my feel, my gut feeling is that if you can make as much money in India in the packaging business as what they may lose in Italy in Q1 and Q2 at least will be sort of on a break even basis on the overall thing.
And then you will see a sort of homogenization of the standalone of the consolidated and then the margins across the board will be quite similar. And then obviously the longer term plan is that the packaging business will grow and will be profitable in and of its own and so will the track and trace business. I definitely expect them to contribute significant to the bottom line in the coming financial year. So the, if you, if you, if you, if I looked at the business and I sort of X rayed and I looked at different segments, then you know, I think that the core coding and marking business is still as profitable on a gross margin basis.
Surely I can, I can say that. But I think even if you’ve not done that deep dive and apportion the expenses perfectly between the businesses, but even if from whatever I can see from the employee point of view and other direct costs which are measurable for us, it has grown in profitability it has grown in like in percentage margin. In a EBIT basis it has grown.
Unidentified Participant
Thank you sir. And one last question.
Unidentified Speaker
Sorry, may I request you to regain the queue please? Okay, we’ll reach out, we’ll take the next question from Subham Jain. Please go ahead.
Unidentified Participant
Hello, am I audible?
Unidentified Speaker
Yes sir.
Unidentified Participant
My question would be if we are operating in an oligopoly market itself and we have so much of unutilized capacity, why has our market share remained or capped at around 40, 20 odd percent? Is it the barrier to taking share from videojet or domino a matter of technology or is the lock in of consumables at the competitor side stronger than what we could have anticipated in the past?
Unidentified Speaker
So Shubham, can you hear me clearly?
Unidentified Participant
Yeah sir,
Unidentified Speaker
yeah. So I mean I think this answer question has been answered in many concours. Fundamentally it’s a very sticky business and we have actually grown our market share slowly over the last few years. But because it’s a sticky business, you.
Unidentified Speaker
Know.
Unidentified Speaker
It’S difficult for the competitors take our customers and for us to take our competitors customers. So it happens. But it’s a bit of a slower business. But technology wise I think we’ve got the best product stack right now definitely.
Unidentified Participant
So what could trigger a market share increase? Let’s say hypothetically.
Unidentified Speaker
So, so definitely one of the gains we’ve had is more like you know, in our non cij products and where especially in the thermal engine and the piezo where we’ve gained market share. So as technologies change, like you know, some earlier person was talking about laser so you know, sometimes people are more open to using someone else’s cig and then you know, a second supplier’s laser going forward or a second person’s, you know, thermal transfer or thermal inkjet. So I think that’s one area where we feel maybe that’s some opportunity to gain market share and the second is to you know, just continuously perform a bit better and just pick these small market share gains because they’re very profitable.
So even if the market is growing at 10% and we’re growing at 14, you know that’s this is quite profitable for us. You know, it’s because an extra 4, 5% is. Yeah, it’s a lot of money.
Unidentified Participant
Right.
Unidentified Participant
So and the second question would be we are running some pilot projects with Pharmacos and what is the typical gestation period from let’s say pilot to getting a full scale rollout and what could be our potential, let’s say value addition in top line and Bottom line, if you could. From that, if you could just give.
Unidentified Speaker
I cannot answer the top line and bottom line part because, you know, it’s all hypothetical. But right now the pilots are sort of over. But there’s a lot of negotiation going on right now. Some contractual elements to the negotiation. It’s not just a commercial negotiation. There’s also legal aspects to it. So we are in the process of trying to finalize those deals. But, you know, it’s one of those things that, you know, we have to go carefully because it’s. This is not a regular type of a. A sale of product. This is a, you know, a patented technology we are giving and there’s certain restrictions in, you know, what the customer expects us to do and what we can provide and so on.
So, so I, I think at given the name, we have two of the top five or 10 customers in India in the previous think so we have, I think we have closed it now to. In a finalization stage in a commercial negotiation stage. But we have, we’re trying to close that hopefully in this quarter.
Unidentified Participant
Okay, so lastly, what is the.
Unidentified Speaker
It’ll be soon. It’ll be soon. But like I said, there’s a little bit of back and forth because both people have given it. You know, us and our customers have also given to their legal teams just to make sure. So when lawyers get involved, everything slows down. It cost a lot more money.
Unidentified Participant
Okay. Okay. Thank you, sir. I’ll join the queue.
Unidentified Speaker
Thank you. We’ll take the next question from Nathan Grover, please. Go ahead.
Unidentified Speaker
Yeah, Good afternoon, sir. My question is for Mr. J. Bur.
Unidentified Participant
I hope I’m audible.
Unidentified Speaker
Yeah, you are. You are.
Unidentified Participant
Okay. Okay. Thank you for that. So first of all, congratulations for an impressive growth in the top line. Okay.
Unidentified Participant
The publisher numbers.
Unidentified Participant
I’m sure you can throw some color on the significant increase that we are seeing in the employee cost. Okay. I think you did mention that some.
Unidentified Participant
Part of it relates to the change.
Unidentified Participant
In the labor codes and another is on account of the increase in the provision on the side of incentive. Right. Just wanted to understand what is the. Policy that you are following in terms of making a provision for incentive? Are you making an upfront provision for. Incentive before the sales happen? And because of that there is a. Mismatch because the increase is quite significant.
Unidentified Participant
When I look at the numbers, it. Is a 28% increase in employee cost over last year and 22% over the previous quarter. And it is definitely impacting the overall.
Unidentified Participant
Profitability that we are seeing for control.
Unidentified Participant
Print for the third quarter.
Unidentified Participant
Okay. So, yeah, thank you.
Jaideep Barve
Yeah. So, Nitin, I would like to address your question this way. See, incentives are always a result as of, you know, like a planned structure process. So we identify the employees who need to be incentivized. We also have sales incentives policies. We’ve got incentive policies for the service managers, plus we’ve got incentive schemes for the back office team. So as and when, I mean, for the people where the results can be quantified like sales and services, I mean, everything is, you know, calculated. For the others where it is more of a non quantifier basis, what we do is that based on our experience and based on the performance, we, we prepare a list and we get it approved and then the provision is made according to that.
Unidentified Participant
Thank you for that.
Unidentified Participant
See, your overall employee cost is like 23% of sales.
Unidentified Participant
I’m looking at the consolidated numbers. Do we expect a similar percentage to continue as we move forward?
Unidentified Speaker
We are definitely looking at, you know, optimization of not just the employee costs, but we are also looking at optimization of even the cost of goods sold and the other worlds. So definitely we’ll see some kind of a good improvement in the periods to come.
Unidentified Participant
Okay, fine. Thank you. Thank you, Mr. J. I appreciate it.
Unidentified Participant
Thank you.
Unidentified Speaker
Thank you. We’ll take the next question from Pratik Jha, please go ahead.
Unidentified Participant
Yeah,
Unidentified Participant
hi. So my question is like, could you say some guidance on the printing core business? What kind of industry growth do you expect over like let’s say three to five years? And how do you see your company growing in that period? Also, if you could like give us some color on the track and race business, how you see that evolving?
Shiva Kabra
Yeah. So Pratik, to answer your questions now, specifically looking at the coding and marking business, it’s going to grow at 10, 11, 12%, depending a little bit on the Indian economy. Like, we’re assuming that India is going to grow like 6, 7% and then, you know, coding and markets will be like one and a half times that and so on. And we’ve been doing a bit faster than that. We feel that our product portfolio is better than the competitors. So we’ll continue growing at that. Right now, considering our lineup and everyone else’s lineup and our edges compared to everyone else’s for the next year or two, I think, you know, like, because I can’t predict five years down the line, but I’m sure we’ll grow at the market.
But maybe in the next year or two if we still maintain our product edges in, you know, the thermal engine and the piezo and certain other things we may be able to grow it faster than the market. Like about 15%, you know, growth rate according to me, give or take, you know, a couple of percent here or there. And obviously if we maintain that edge, which we feel we’ve got a strong, you know, organization, strong everything, maybe we would maintain that 15 ish percent growth rate for a longer period. Like I said, it’s, it’s gonna, there is a technical element to it, although I know I said that it’s very sticky but you know, it’s also, there’s a technical aspect to it also, you know, the product does matter.
The second part of the thing was the question regarding the track and trace business and how it’s evolving. So I said, like I said, it’s already a few hundred crores like Jackson, acg, those types of people are there. We’re coming with a slightly different strategy. Are we doing some more plain vanilla stuff right now? Now we’ve sort of finalized certain elements where we should be able to go for more high value added business. And you know, if for us it’s more for fusion of the track and trace into, you know, something which is going to give much more business intelligence to the customer rather than just meeting a compliance requirement because then you have to meet the compliance.
But how can we sort of connect that to resolve some of the customer issues? So you know, first let me, let me try to conclude those two contracts. You know, let us try to conclude them and roll them out. Their pilots or the big pilots like other pilot has to be commercialized now and, and if that happens we’ll be busy with that anyways quite a lot of time and you know, and then we’ll have to see what the market reaction is and whether what we believe we’re providing the customer as a benefit, what the customer believes he’s getting, if he’s getting it, you know, the market is big and if he’s not actually, you know, the theoretical benefit versus the, the practical benefit is not there.
Then you know, yeah, we’ll still sell stuff but then it might not grow at that same rate. So it’s very difficult to say making a technology platform play in both the packaging business and the track and trace business and digital printing. So they’re very different from the coding and marking business, you know, where it’s a very established platform and everyone knows what they’re getting.
Unidentified Participant
Thank you Shiva. Just a small follow up.
Shiva Kabra
It’s difficult to predict is my point because these are like, you know, they’re, they can they can, you know, they can be hockey stick type of growth or they can just not take off, you know, it’s, it’s very difficult.
Unidentified Participant
Just a small follow up question on track and race. So as of now the demand that you are seeing, is it purely from the compliance perspective or you are also seeing companies doing it by themselves? The reason I’m asking is that I’ve seen couple of organic players, they are putting QR codes on their products so that you can see that from where it’s been, the exact factory it is coming from and etc.
Shiva Kabra
Yeah, so those are like children’s things. No, so the reason is the compliance. So there’s a thing called L1, L2, L3, L4,5, L5, which means, you know, when L4 and L5, the information that you print is connected to that of the regulators, you know, and people down the line in the supply chain and so on and so forth. So what, you know, if people are printing a little QR code on, you know, a thing and it’s leading to a website link that’s, that’s just basically a little bit of marketing type stuff that they want people to go onto the website and claim 10% and get his information or something.
But no, what the pharmaceutical companies are regulated or the top 300 brands or something of the sort, it’s regulated and for these customers it’s a, it’s a regulatory and a compliance matter. So they don’t have any, so they have to, they have to, you know, comply with the norms and even in the export segments in some countries there is a requirement of this. So fundamentally like, you know, it’s a compliance based business and then we are trying, which is our strategy that if you’re doing the compliance and we’re getting so much data, we’re printing so much data, why can’t we do more things on top of that and really resolve some of your burning issues? So that’s what our, our fundamental take is.
But it’s a compliance based business in pharmaceutical, other people are doing it. Those are like not, those are not mission critical applications, I’ll put it that way.
Unidentified Speaker
Thank you sir. We’ll take the next question from Prashant Jani, please go ahead.
Unidentified Participant
Yeah, hi. Thanks for the opportunity. Sir, earlier you mentioned that we’ve taken price hike on our printers. So are we the only ones who have taken a price hike or our competition has also taken a price hike? And whether these price hikes are to match the commodity inflation or should this price hike result in any sort of gross margin expansion.
Shiva Kabra
I think Jaydeep, you can take that one but it is more not on the printer so much as the materials or the consumables and the services. And it just was lagging from our side. We had. There has been some cost increases my belief but I think JD you know answers better. I think maybe he’s gone off the call.
Unidentified Participant
Sure, I’ll ask my next question. I had recently met a company who had a packaging solution similar to V Shapes but it was not V Shapes, it was some Chinese supplier. So wanted to know if you are aware of any such Chinese competition there in the market and how does our patent protect us against such competition.
Shiva Kabra
So the patent protection is quite fundamental. There are two companies that are there in this business. One is Easy Snap which was founded by the person who founded E Shapes and that uses an older patent. Now that patent itself is being violated by the Chinese companies and they do have a patent in China. But someone needs to go to China and sue those people and so on. And you know, it’s not easy to do that with a small Chinese company because the guy will shut it and his brother or sister will open a new company or something.
So we’ll have to go after the customers or something of that sort. But we don’t have any, to be honest, real presence in China. So we don’t know how to get all the stuff done. But we do have patents in other countries and you know, we are not afraid to take legal options. So if a large customer out here employs one of those machines, we’re not afraid to go to court. Now the Easy Snap will expire
Unidentified Participant
in.
Unidentified Participant
Terms of the of those printers versus and as well as the per unit price.
Unidentified Participant
How would that
Shiva Kabra
finish this thing on the packaging machine? Now the, if the Easy Snap patent will expire at the end of the year so the Chinese people will be able to copy that type of machine. It has fundamentally some limitations which is the reason we purchase V Shapes because we figured out that this technology is going to have a benefit and we have a patent still 2036 in all major jurisdictions. We’ve also filed a whole bunch of patent extensions and you know, different types of patents to cover like you know, packing powders in our format or using the single polymer homo like a homopolymer recyclable material for example or switching to a paper based material which is more than 70%.
So we’ve also been filing a bunch of other or working on a bunch of other projects. So we expect that with an ecosystem of IP you know, things around this, you know, it will make it difficult for people to get into the business because you cannot service all the needs of the customers and so on. So right now, now the Chinese guys who are selling are fundamentally, as of right now, out of pattern of the easysnap. People are not copying the V shapes machine as of yet. It’s more complex, much more complex to make. They will copy it.
Whenever they do, we will sue them. You know, that’s as simple as it is.
Unidentified Participant
Okay. And currently the EasySnap technology which is there, how is it competitive in terms of pricing wise, say per unit sachet and the printer, the packaging machine itself.
Unidentified Participant
Versus our solution,
Shiva Kabra
they’re very similarly priced. The main difference is that Easy Snap is running on an older technology, so the speeds are much lower. And also because the way they cut the material without a shape, it’s much more difficult to do that consistently. So the material tolerances have to be much lower. And if the material tolerances aren’t perfect and the setting of the machine is not perfect, then the chance of, you know, you making too deep a cut in the material leaking or you’re making too shallow a cut in the, you know, product not snapping increases quite disproportionately.
So yeah, Easy Snap is not the main issue out here. The main issue right now is for us to just grow the market. It’s not, it’s not a competitive situation. It’s, it’s more of, you know, I think all customers would know that our product is not superior.
Unidentified Participant
Okay, thanks. I’ll get back in the queue.
Unidentified Speaker
Thank you, sir. We’ll take the next question from Samarth Singh. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity. Just a question on our cash flows. Assuming our packaging business breaks even and we’re doing about 50 crores of cash flow a year, how much of that will go into CapEx to maintain the 15 growth in the coding and marking business? And how are you thinking of the, of the balance and plans to utilize the same?
Jaideep Barve
So I think, you know, approximately what we depreciate, we spend about that much is maintenance and other types of capex, we don’t even spend that much. But part of the depreciation is also certain things that we’ve invested in, certain tooling, certain other things that we do.
So I don’t think that fundamentally the capex is required. There is some capex that we are doing in terms of the development of the Homo polymer for the packaging material and you know, it’s manufacturing and so on. Other things but, you know, we don’t expect either. We don’t expect anyway for our coding and marking, digital printing, track entries business. There’s no capex needed. You know, the capital investment out here is the R and D, frankly speaking, you know, and whatever projects we do on those fronts. So. But the R, the cash flow is probably higher than 50 crores, but I’m not sure what it is.
Jeep will give a better number, but yeah, I think we continue to maintain that. I think. Yeah.
Unidentified Participant
So when the R and D is expensed or is it capitalized? That’s the first one. And the 50 crores from the presentation that you have posted for this, these quarterly results. So I got the number.
Jaideep Barve
So it might be in a consolidated basis. I think a standalone profits are higher. And what’s happening is some of that money is going into funding, the. The losses and the other things of our subsidy. But, you know, Jerry, you’re here.
Unidentified Speaker
Yeah, I’m there. I’m there.
Jaideep Barve
Yeah. So if you can just answer this question about the.
Unidentified Speaker
So what happens is that R D costs are expensed out in the books of accounts.
Unidentified Participant
Okay.
Unidentified Speaker
Yeah.
Unidentified Participant
Okay.
Jaideep Barve
So other expenses in the. In the BSE filing, it will come under other expenses. Is this correct?
Unidentified Speaker
Yeah. And regarding your question on whether any capital expenditures required for the core coding and marking, I mean, there’s nothing major as planned for the code coding and marking, which Shiva has also mentioned because we are at the moment running at about 65 to 70% of the our capacity. So we don’t foresee anything like, you know, major capex in the corner market.
Unidentified Participant
So just to understand. So out of the 50 or 60 crores of cash flow, we are paying about a dividend of 15 crores a year. What is the plan for the balance? Are we looking at more acquisitions or.
Unidentified Speaker
It’s very early to say whether we are looking for acquisitions, but I mean, if we come across, we might consider. I mean.
Unidentified Participant
Okay, thanks. And the second question was just on, you know, our expansion into the Middle East. Who are the competitors there right now?
Jaideep Barve
So if I may answer that question. Fundamentally, you know, this. This expansion in the Middle east is not really. It’s for a way. It’s a small type of a setup that we’re doing. It’s not a major setup. So it’s just meant to help service the customers that we already have, you know, in certain segments where we’re very strong. So for example, you know, it could be in stuff like steel or something. So it’s.
We only have like about four or five people working for that entire market. And it’s meant more to be in certain niche industries and applications where we have some, you know, like, definitive technological advantages compared to our competitors and to sort of replicate the same across the Middle east and Africa. So it’s not. It’s not like a heavy duty. We don’t want to have like even 20 people that we want, like, we have like four, five. Five people, I think, beside for that area.
Unidentified Participant
Got you.
Unidentified Participant
Thank you so much.
Unidentified Speaker
Thank you. We’ll take the next question from Nikon Jivan, please go ahead.
Unidentified Participant
Hi. Am I audible?
Unidentified Speaker
Yeah, yeah.
Unidentified Participant
Thank you for the opportunity. So I just wanted to understand how are we standing today on the packaging business? So I think we have established a machine in India and we are trying to see the market. So what sort of response are we getting from our customers and what. What is the market telling us right now?
Shiva Kabra
Could you just repeat that again? I’m sorry.
Unidentified Participant
So for the packaging business, the V shapes business, right. We have established it in India as well to seed the market. Right. We have put up a machine and we are doing co packaging for our customers, Is that right?
Shiva Kabra
That’s correct,
Unidentified Participant
yeah.
Unidentified Participant
So. So what are we hearing right now from the market? What are our customers telling us and how is the traction there and are we seeing any demand and any growth there?
Shiva Kabra
Yeah, so I think what happened was there has. There is demand. We have four machines installed in India also. If. Yeah, I.
Shiva Kabra
If.
Shiva Kabra
But all of them are not working completely because of some niggling issues. So what’s happened is we’ve, as we got more into the business, we found out more issues because, you know, when what’s happening is people want to take like a hundred thousand packs to test the market and see how the format is and to test everything. Now what happens in that given situation is that they have a bunch of technical issues because we. We struggle to print that much in such small quantities and certain other things. So as a result of this whole thing, you know, it’s been a bit strange, but the market is good.
It’s actually quite positive. And, you know, I have no problems with the way the market is shaping up. And it’s definitely picked up in the last couple of quarters. Now we’re really working on trying to execute the orders that we have, especially for the CO packaging, and get the guys who bought the machine streamlined so that. Because even they have the same thing that a lot of, you know, like those guys are exporting. But then the customers they have are not taking one product and continuously running it. They Have a range of different serums and face creams and I know whatever stuff that they use.
And it’s a bit painful because we need to fundamentally like provide for all of those different situations. So to print it, to test each material, test the compatibility, do the stuff, you know, whether you make a billion or you make like 10 pieces, same amount of work for us. So to get the artwork to qualify that. So we’ve been working a lot on streamlining the process. We especially had a lot of problems in printing smaller batches and our turnaround times because it takes three months for us to get something reversed and laminated and sent back.
And you know, most customers want everything in 30 seconds, you know, so. So it’s. So we’ve been working a lot on streamlining our own supply chain because the getting the machine, installing the stuff, getting the licenses, all those things was one part. But you know, we were not so equipped maybe to get those quick turnarounds for a lot of customers.
Unidentified Participant
Right. You mentioned.
Shiva Kabra
But the demand is definitely increasing both here and in Italy. So I think, you know, now think now that things are much more streamlined. Even our own team is a lot more confident that we can execute the co packaging orders. And as a result they are much more comfortable in taking a lot more orders. So yeah, that’s what the thing is,
Unidentified Participant
Right.
Unidentified Participant
You, you mentioned four machines. We have established. Right.
Shiva Kabra
Can you say that again?
Unidentified Participant
In India we have sold four machines, right? Is that what you said?
Shiva Kabra
Yes.
Unidentified Participant
Okay. And just in case of are acquisitions, how are each one of them doing? If you could share some numbers like Cardiology and Mark Print, what are their nine month numbers?
Shiva Kabra
If you can help out of this, please.
Jaideep Barve
Yeah. So the nine month numbers for Cardiology is, you know, like it’s, they’re. They’re picking up the business in fact, but there’s still, you know, like something to catch up. So for Choreology, I mean the entire consolidated audiology group, we are having a loss of about 147€000 as of now. So it pounds as of now. And for Mark Print, I mean it’s a good position though not a great position. Mark Print generates profits, so we are not overly worried about that. However, the scale of business can definitely be improved for Mark Print.
Unidentified Participant
Right. So majority of the losses is coming from the V shape side.
Right. The Italy business,
Unidentified Speaker
the major losses are coming from Italy. You’re right.
Unidentified Participant
Okay. Okay.
Unidentified Speaker
Correct that.
Unidentified Participant
That’s it from my side. Yeah. Thank you.
Unidentified Speaker
Thank you. Thank you. Nip, sir. Due to time limitations, that was the Last question. Would you like to give any closing comment?
Shiva Kabra
I. I think we can take the rest of the questions if it’s there. No problem.
Unidentified Speaker
Okay, we’ll take the next question from Mok Shanka.
Unidentified Participant
Hello sir. I just wanted to ask about your.
Unidentified Participant
Intern
Shiva Kabra
because I mean obviously someone is waiting one or to ask a question. Do not be fair to not let them ask questions. So sorry about that. Please continue. Sorry.
Unidentified Participant
Yeah, just wanted to ask about our international subsidiaries. You like when is the turnaround expected for all our subsidiaries and could you provide some more color as to the current operations and. And yeah, the timeline for the turnaround there.
Shiva Kabra
So Moksh, like I said, Codiology is profitable in their current business. Not massively so, not minorly so. They’re just like a bit profitable because the UK market has been a bit down. The losses they’re making marginal. It’s mainly because they are also we have asked them to invest in the V Shapes business and we are establishing a co packaging and a full marketing setup in the UK also. And that’s why they’re taking some expenses for licenses for other things and whatever. To start out. The marketing business is already profitable and we expect to it not only to remain profitable but to grow in profitability.
And we’re working on that, you know, so we’ve got some great applications. There’s some good stuff that we’re working with them. Now. The Italy business is fundamentally what we’re all talking about because that’s the major loss making entity, you know, so. So I mean cardiology market is not really that relevant in terms of the overall factor. The Italian business is the main one and I’m expecting in Q3 and Q4 of financial year 26, 27 they will be break even and I’m expecting that Indian business in packaging will be break even or profit break even at least in Q1 and Q2 and profitable by Q3 and Q4.
And so hopefully I’m hoping that next year the packaging business as a whole will be break even. You know, if I combine it across India and Italy and even the UK and so on. Does that answer your question?
Unidentified Participant
Yeah, yeah, that’s it from my side. Thank you for answering your question.
Unidentified Speaker
Thank you. Moksh, we’ll take the next question from Madhurathi. Please go ahead.
Unidentified Participant
So thank you for the opportunity, sir. I wanted to understand regarding the solution that we are offering in track and Trace and how is it different from ACG and the other players because I understand that the none of these players manufacture printers as we do so if you could just help us understand how is our strategy different and can we do a partnership with the likes of ECG who do packaging and all by supplying our solutions to them?
Shiva Kabra
So that’s a very good question. Our solution is quite different to what they’re doing. Like I said, everyone is doing the compliance. The big players in that are acg Jackson and Pharma Secure and Optel, which is more of an international player. And we also one of those guys who has the entire solution from L1 to L5. We get the entire compliance. Now the difference between us and the other players is that we are focused more on meeting the compliance needs like them, but also using our printing capabilities, our software capabilities and other stuff to offer a more comprehensive solution to those pharmaceutical customers so they can tackle other business issues of theirs.
Now I can’t tell you exactly what it is. Like I said, if we finish this negotiation and we roll out the pilot and I get a permission from the customers, I will make a presentation on this. Like we make a white paper and a presentation which we’ll provide to everyone, maybe whatever it is. So let me, let me just finish this thing. You know, hopefully we, I will conclude everything and move ahead.
Unidentified Participant
Yeah, got it. And so second question was recently there was a publication that your seed companies need to have barcode and they need to have traceability on their packaging. So can that be a additional market for the track entry solution along with our printing, the printing for the printers and the consumables that we provide?
Shiva Kabra
Definitely. Agrochemicals, including like pesticides and you know, and, and seeds and also I believe to some extent fertilizers in the future are also going to come under this regulation. But what am I know is like I don’t know if it’s been, it, it’s been notified but not like you know, it’s been delayed or something has happened. So if you’re saying it’s, it’s official now so people have started doing it especially in the agrochemical industry for the pesticides. But I don’t know if everyone is already executing. Obviously if that happens then the addressable market increases. But normally in our past experience, till the government doesn’t mandate it and say you have to do it, you know, it’s a different business till.
And so yeah, I don’t know if the, from what my knowledge is that the government is not mandated as yet. It’s something that is supposed to happen but degrade once or twice. And until they don’t say like, you know, we’re going to pull your product from the shelf. Past experience shows that, you know, people don’t really. But yeah, it’ll increase the addressable market for sure.
Unidentified Participant
Got it. So just a final question from answer. How do we plan to scale up these labor applicators and the barcode scanner that the. That Codiology produces in India? Because I suppose that there will be a lot of customer synergy. Product synergy versus the printing solutions that we are providing.
Shiva Kabra
In fact I’m in the Naragar factory right now and the Codiology team is here and they’ve come specifically to give the training on the entire print and apply manufacturing and setup. So it was a bit delayed but now we expect to really go ahead and move on it. So they will keep, you know, because you do it, you have some issues. And now, you know, now we’re ready for the second round of real training and manufacturing out here. So hopefully after this we’ll be in a much better position to actually execute and start selling the solution to customers rather than being a hypothetical tool in orchid.
Unidentified Participant
Got it sir, that was from answer. Thank you so much and all the questions.
Unidentified Speaker
Thank you. We’ll take the next question from Rahul K. Please go ahead.
Unidentified Participant
Hello. Yeah, thanks for the opportunity. Yeah, yeah. Just a few questions from my side. So for the first one is like I would like to understand on the standalone basis, right. This time our EBITDA is lower compared to last time. Is it due to the product mix or something else? Because yeah, our revenue is also like.
Unidentified Participant
Higher from last quarter.
Unidentified Participant
Yeah, that is my first question.
Shiva Kabra
So Rahul has been addressed earlier in this conference call. But J, if you want to repeat the thing.
Unidentified Speaker
See I tell you what Rahul, I mean as we’ve been saying there has been an increase in the costs related to employee benefit expenses as well as other expenses. We’ve explained the reasons why they are and management is definitely committed to, you know, take a closer look and monitor them and we hope for a better Q4 in terms of the margins achieved through optimization of the costs.
Unidentified Participant
Okay. Sorry, I joined a bit late. Sorry, sorry if I have repeated the question.
Unidentified Participant
The second question is on the V shapes, right? So I think so.
Unidentified Participant
Last con call also I attended like we were expecting somewhere around Q4 to break even on V shapes. If I’m not wrong, that was so like now it is delayed. Sorry if you have already addressed it but if I can recollect.
Unidentified Participant
Yeah, that was what was said in the last call.
Shiva Kabra
Yeah, so we said earlier that what happened was, you know, we had some slight Technical issues in terms of, you know, being able to send out the machines because we wanted to, like I said some, some minor improvements need to make we made on the machine and therefore we couldn’t really ship that many machines. In Q2 and Q3 we’ve shipped one machine I believe finally and in this quarter and next quarter ship the remaining machines that we had like a few machines like not a huge backlog but we have a few machines that we need to ship out that will reduce the losses in Q4 and Q1 or you know, help us do it.
So that will definitely help improve the overall performance and at the same time we’re also getting a strong push in the co packaging business. I won’t say it’s particularly profitable. It’s more to you know, help popularize the product and scale people up so that they start becoming, you know, machine customers and, or do the co packing elsewhere with our package and so on. So I think from that perspective it’s looking positive, you know. Yeah, and I said I’d given a specific guidance in Q1 and Q2 in India will be break even in the packaging business and profitable by Q3 and Q4 and in Q3 and Q4 of this coming year I expect that Italy to be break even.
So there’ll be losses but they’ll be on a declining platform from now on.
Unidentified Participant
Okay, and one last question, like do we maintain the current like meeting growth what you like projected in the earlier calls? So we, we maintain that guidance.
Shiva Kabra
Can you repeat that again please?
Unidentified Participant
So I was saying like we projected mid teens growth, right. 10 or previous con calls. So do we like project we stand on that projection, right. Or do we have certain.
Shiva Kabra
Right now I think we’ve got the nine month figures and so on like some 16 growth or something.
Unidentified Speaker
Yeah, something like that.
Shiva Kabra
So yeah, hopefully it will continue on a standalone basis in that, that zone or something. So yeah, I mean for three quarters and obviously like you know, like I said if, if the, the coding and marking market is doing at a certain pace and then hopefully we’ll be able to grow faster than that. So, so how we maintain that for this year for nine months and of course for next year we’ll definitely see for next year.
Unidentified Participant
Thank you sir.
Unidentified Speaker
Okay, thank you, thank you. Since that was the last question, would you like to give any closing comments?
Shiva Kabra
Just want to thank everyone for participating and really appreciate your time. Obviously I think a lot of questions regarding the gap between the standalone, the consolidated and then because of some tax reasons the, the pat looks a bit poor, but I’m. We are quite convinced that the standalone and the consolidate will start merging in this coming financial year.
Jaideep Barve
Yeah. Thank you so much, everybody. It was nice to have you on the call and keep supporting us.
Unidentified Speaker
Thank you. Thank you to the management team and thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.
operator
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