Control Print Limited (NSE: CONTROLPR) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Jaideep Barve — Chief Financial Officer
Shiva Kabra — Joint Managing Director
Analysts:
Jay Chauhan — Analyst
Unidentified Participant
Madhur Rathi — Analyst
Kumar Saurabh — Analyst
Hardik Bora — Analyst
Dhruv Achrekar — Analyst
Keval Shah — Analyst
Deepan Shankara — Analyst
Saket Kapoor — Analyst
Tushar Talwar — Analyst
Devanshu — Analyst
Presentation:
Operator
Ladies and gentlemen I welcome you all to the Q1 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 June 2025, their plans and vision for the coming year, post which we will open the floor for Q&A. Over to you, sir.
Jaideep Barve — Chief Financial Officer
Yeah. Good afternoon, everybody. My name is JD, and I’m the Chief Financial Officer of Limited. Welcome all of you to the earnings conference call for the first-quarter of financial year ’25 ’26. We appreciate that you’ve taken out time for your busy share room to attend this call. Thanks for being in this call.
MR. Shiva Kabra, the Joint Managing Director of Limited, also joins me on this call. For the first time, join us on this call, more information about our company can be opted by visiting our website. For information, the detailed presentation has already been put up on the website as well as in the investor presentation notification on the exchanges for this call. Now let me provide you some highlights of the performance of CPL for the first-quarter.
On a standalone basis, the total revenue for Q1 is approximately INR109 crores, which is a good growth from approximately INR89 crores in Q1 of last year. For information, the total revenue of FY ’24, ’25, 2024 and ’22 ’23 is INR395 crore INR347 and INR295 crores respectively. Regarding the operating revenue, the Q1 revenue is INR100 crores, which was INR88 crores in Q1 of the last year.
We had an exceptional income of INR3.99 crores. This pertains to the capital subsidy related to the mass lab, which is about 30% of the investment part and machinery. The cost-of-goods-sold is around 43% of the operating income. Manufacturing costs remain approximately at 3%. Employee costs are 18% of the operating revenue, depreciation is about 4% of the Q1 and other expenses are 30% of the operating revenue.
All the costs are in-line with the business needs and in comparison to the earlier periods. On a consolidated basis, the Q1 operating revenue is INR11 crores. This was INR98 crores as for the June ’24 figures. The way forward, we will consolidate the coding and marking business, we’ll increase the installed-base and will provide robust solutions. We’ll capitalize opportunities in the pack and trace segment by more focused marketing and strategies.
We’ll increase revenue in the packaging sector, both in India and overseas through either of machine sales, co-packing and the laminate business. Overseas subsidiaries will continue to be monitored with focused good targets. We have already provided — provided their business plans and they will be — ensure that they’ll be mandated for execution.
Now we leave the floor open for questions. I am sure available to answer all your queries and questions.
Questions and Answers:
Operator
Thank you,. I will request the participants who wish to ask the questions to please use the option of raise hand. I also request the participants to limit their questions to two per participant so that everybody has the opportunity to ask.
We’ll take the first question from Jay Chaohan. Please go-ahead.
Jay Chauhan
Sir, and thank you for the opportunity. So my first question is, you have been very clear that scaling the cost-effective recyclable packaging material is a key bottleneck for Vishay’s business. Especially for the food and sectors. So could you provide some specific like quantifiable milestones for this financial year-on this front?
For instance, like what volume of recyclable material do you aim to produce and at what target cost per pack, do you believe the solution becomes viable for a mass-market cosmetic consumer or be it any customer? Can you please guide you on that, sir?
Shiva Kabra
So Jay, this is Kabra. No, it’s a fair question. So right now our cost per piece for a standard 6 to 8 ml type of a Sash mono dose is about INR2. In general, we are targeting to get down to INR1. As of right now, we’re not manufacturing any material, we’re importing it. I lost your voice
Operator
. We can hear you.
Shiva Kabra
I said as of right now, we are not manufacturing anything ourselves. We are working on a fully recyclable package or it’s still not complete. There’s a speed limitation in that. So we are trying to work on overcoming that. So like I said, right now it’s costing INR2 per piece. Now we’re trying to target to get it down to INR1 by the time we manufacture ourselves or a regular sachet is in the region of INR35 or just so your comparison is there and a thermo form would be in the same region. A thermal form of barrier would be actually probably more expensive, like it will be similar like about INR2, 1.5 apiece because the amount of material being utilized is quite a lot of material. So we’re still working on the recyclable part. We still have to start the manufacturing of the material. We are working mainly on the development of the fully recyclable stack.
And once we do that, then we intend to manufacture that itself rather than the current structure, which is actually not recyclable.
Jay Chauhan
Thank you. That’s it from my side. Thank you.
Operator
Thank you, Jai. We’ll take the next question from Rushikesh. Please go-ahead.
Unidentified Participant
Thanks for taking my question. So my question is essentially on the lines of the competitive pressure. So how are you seeing the competition impacting the V-ships and the mono packaging business right now? And I’ll also put out my second question, like we saw the drop-in the margins and a drop-in the EBITDA at the consolidated level. And the reason that was mentioned in the presentation was that it is because of the higher printer sales that the gross margin has reduced. So I would like to have an explanation on that also, please. Thank you.
Jaideep Barve
So as far as the gross margins dropping, I don’t think it was so much because of higher of sales. I think it was more because of higher expenses that we incurred in the packaging business that what we — so we’re still making a loss in that business, a significant loss. And that’s why there is a — so there’s a loss abroad in CP, Italy, which is where we are doing our packaging business.
And there is also a some sort of a large set of expenses that we’re incurring in India as we develop the business in Asia-Pacific directly from control print in India. And I think those two things are sort of are contributing to a variation in the results. As far as our coding and marking business grows, so I think the track-and-trace business is doing better.
And what I would say like this year should be breakeven if not profitable. So that’s growing. And as the volumes are scaling up, we are seeing like the — obviously like because there’s a fixed-cost that’s there, yeah. And as the volumes scale-up and we get more repeat revenue in terms of contracts, AMCs and stuff like that, or the profitability of that business is increasing.
So that addresses somewhat the gross margin question, but the reality is that in our coding and marketing business, we can increase the margins. We’ve not been taking up some price increases and we’ve undertaken a price increase, which we announced about a month or two ago. So that’s with effect from 1st August.
So practically speaking, it will take one to two months-to roll it out because customers are good at negotiating and all that other type of stuff. But what we should do is start seeing an effect from Q3 in terms of the coding and marketing business margins increasing. We’re also making sure there are — there’s a little bit more tightness in the way we are running things overall.
So that’s why I’d say like where the margins have dropped, which is more because of some expenses that have increased you know in terms of that. Like I said, even on the material side, in the packaging thing as of right now, everything is still being imported. So it’s not like there’s much of a margin in India or elsewhere because we’re buying it from high-cost supplies in Europe and honestly, it’s not that — it’s already much profitable on the material side.
So till we don’t manufacture the material or we don’t do something sharply reduce the cost, it’s not going to come down drastically. So that’s something we’re still working on.
The second part of your question is on the packaging business. If you can just repeat that again for my benefit, please?
Jay Chauhan
No, my question was essentially about the competitive pressure that you are seeing in the packaging business and V-shapes.
Jaideep Barve
So there is no competitive pressure because as a patented technology, so we are competing against different technologies. So some people might use — like would probably be the biggest you know the biggest I think use of single-use packaging. Thermo form is another thing. So when you get your jams and those things or your omel butter and that will cup and you peel off the top, that’s like a thermo form.
Or of course, sometimes people use single-use glass bottles or tubes for expensive types of packaging. So I’d say — and of course in the pharmaceutical sector, there’s a more specialty type packaging also which are single-use. So there’s not apples-to-apples comparisons out here, this apples to orange comparisons. You know, it’s — what I’ll say is this much, 95% of the market doesn’t know that this packaging is there.
So our biggest — in India where control print is present. In the — if I look at the world, I think we like 99.6% of the world doesn’t know there is a packaging that is available. So our first target is to improve our marketing or to improve our reach and also at the same time, we’ve not been over aggressive because like I said, we need to develop some things still.
But at the same time, we also want to make sure that everything is in a — all processes are smooth before we try to really increase operations beyond the point because there were certain development projects going on, which are coming to an end in certain new developments to continuously increase the scope of what we’re doing right now. So that’s continuing.
Unidentified Participant
So essentially, we’re trying to like make the customer aware about this kind of existence of such kinds of products and basically convince them that this provides a better packaging than what they are using essentially right now. So you have a entirely new product is what you’re trying to say.
Jaideep Barve
Absolutely. It’s a different type of packaging. So you can’t compare it. It’s like comparing a Tetra pack to a HDP bottle, you know for packing milk. So Tetra pack is a different type of package. It’s not a pouch, it’s not a HDP bottle, you know, but it’s something new. So it’s — so we’ve made a different type of product and what is — so there’s no indirect analog in the market.
But of course, we’re all competing for the same business, which are all competing for the single-dose packaging business or single soft. So yeah, that’s sort of where it is.
Unidentified Participant
Sir, just one last follow-up question.
Operator
Russukesh, may I request you to rejoin the queue, please?
Unidentified Participant
Yeah, sure. Okay.
Operator
We’ll take the next question from Madhur Rathi. Please go-ahead.
Madhur Rathi
Hi, sir, thank you for the opportunity. Sir, I wanted to understand regarding the losses that we expect, sir. So we mentioned that on the overall level, our track and trade should breakeven and there should be a INR17 crore INR18 crore losses in our packaging business for FY ’23, INR10 crore losses in the packaging business in FY ’26, but sir, in Q1, if I just consider standalone minus the consolidated, you have taken a INR13 crore loss.
But sir, are we expecting what — some kind of turnaround or how should we think about the losses going-forward for the whole year?
Shiva Kabra
So there were two aspects to it. There is one thing which is some sort of a foreign-exchange gain that the standalone business got and a foreign-exchange loss that came in the consolidation. And I think can give you a better explanation about that. The actual loss in the packaging business abroad was in the region of INR4 crores INR5 — about INR5 crores. So we are expecting that in this year-by Q3, Q4, we’ll be at a breakeven of maybe at for that packaging business and we are targeting a loss of less than INR10 crores over the year.
So obviously, we’ve had a certain thing. We have sold some machines for various smaller issues, a lot of those machines are not running online because the packing sizes changed or something else is there. So as we get more machines to start working, the material business in that — in that vertical also increase and that will also start helping us address a lot more of the fixed costs rather in-line with the machine sales.
Madhur Rathi
Got it. And sir, just a second question on the and the mark business, sir, when I go through their websites, their products are — so obviously, there is a complement to our current products. So I’m trying to understand how is the competitive intensity in this business? Because as I understand, there is lot of Chinese competition in these products because of the being of a lower-value item than what a printer would be.
And sir, what would be the market — addressable market size for these products that we are hoping to launch over the next one year?
Shiva Kabra
So I think we have and code you’re just selling there’s less competition. Mark is more print is more digital printing technology in-line for and we are using some of their technologies already Already in India. So that’s definitely part of what we’re doing in our own business and we’re getting some success in our sales on that regard. But their printers would not be selling. I think the cheapest printer would be like at least EUR25,000 or something. So I — I think they’re definitely more expensive than anything we sell. That’s why we’re not importing their equipment or directly copping their design because it’s too expensive for the Indian market. So we’ve just taken elements of their design and incorporated it into our own machines. Codeourage is more end-of-line automation, so it’s more of a solution business. And of course, they do print and apply equipment. And so what we’re doing is we are working with building up a coding and marketing business out there and also absorbing their print and apply technology in India without really affecting what their core business is and what they’re doing and making money and so forth.
Operator
I request you to please rejoin the queue, please.
Madhur Rathi
Sure.
Operator
We’ll take the next question from Kumar. Please go-ahead.
Kumar Saurabh
Hello. So I have two questions. My first question is, currently, what is our capacity utilization at our manufacturing premises? That is one. And is there any need of doing capex soon? And second question is the extension of a previous participant asked. So last year we occurred almost INR14 crore INR15 crore of loss at EBITDA. And it’s good we are taking these new initiatives because that is how growth happens. But next two, three years, this minus INR15 crore, what is your estimate? And I’m not looking for exact number or anytime soon, but two year, three year, four year, what is our timeline where all these three subsidiaries, what is the kind of contribution should come? And if we are not getting desired results, let’s say, after waiting for two, three years, do we have a plan B on this? These are the two questions.
Shiva Kabra
Yeah, so good question. So I think like I said, we had given a two-year plan when we bought, which is now CP Italy. So we’re in the second year, so we bought on March 20 March 24, 2024 officially. Honestly, but this is the first time we’ve done something — we’ve purchased a company from liquidation and stuff. So what happened was maybe the time the optimistic because it just took us six — I mean, frankly, seven, eight months just to get everything running normally, because — and some of the — what happened was they already had an existing base of customers to be honest.
They had like some working printers in the markets, we were expecting about those worth of material sales from the existing customers. But because the liquidation process in the bankruptcy process for a year and a half, those customers couldn’t run their machines because of material supplies where regular support was irregular in that entire period for that two-year period.
So what happened was a lot of those customers went back to their older style of packaging. So you know, and they were unhappy of course for good reason because obviously if you bought a machine and all this. So we thought that those customers will you come back to us and we’ll use that, that actually didn’t happen. So it was a bit of a negative to be honest, maybe you know.
So I think, yeah, instead of like I said, we’re expecting by the Q3, Q4 to be a breakeven in this business across India and Italy, we probably — between the track-and-trace and the packaging business, maybe I think like INR22 to INR25 crores probably what we spent in terms of losses last year funding it, but it will come down this year.
Track and rate should breakeven this year or be profitable. And I think that definitely next year, the packaging business should be profitable, although it’s going to take a longer time because we’re going to continue investing. Right now, we have a sales structure in Asia-Pacific and in Europe. We’re going to have to keep — in all regions of Asia also.
So we’re going to keep expanding that we — in terms of capacity utilization, I think that was the second question. In the coding and marketing business, I think we can go from about INR400 crores of what we are doing right now to at least INR600 crores without adding or any types of the capex or any significant manpower. So I think we have that much in what we have right now. In terms of capex, there may be — because we are working on the recyclable material for the packaging business.
We may — although it’s more of an R&D expense, we might — we might buy 10 crore to INR5 crores of some pilot type of equipment for like lab — our lab lines because we need to do testing, but it’s very slow to get it done outside. So we might try to speed-up that process so that the recyclable material, which is lower-cost can be produced faster.
Kumar Saurabh
Sure. Thanks a lot and wish you all the best and I’ll come back-in the queue if you have more questions.
Operator
Thank you, Kumar. We’ll take the next question from Hardik Bora. Please go-ahead.
Hardik Bora
Hi, thank you for the opportunity. I just had a hypothetical question in the standalone coding and drinking business. Is it possible for any one player to, you know, garner about 40% to 50% market-share in the long-run? And is it economically to why for that additional market-share?
Shiva Kabra
I mean, I think that loan would love to have 40%, 50% market-share the thing is so obviously theoretically, there’s no reason why it’s not possible and it is then smaller countries, you’ll see a lot of times just a single-player who might have 50% 60% market-share and then a few smaller other competitors in certain countries, it’s more for duopoly rather than of four people or something.
So it is there and it is very much possible. But once the market shares settle, which is sort of what the situation is, it’s a bit of a dogfight to keep changing that. We are gaining a little bit of market-share, but we’re not — obviously, I would like to be faster, but — and it’s our — it’s the easiest, most profitable business because we already have a base, we have an engine, everything is best for us.
But yeah, I mean, you know, I don’t know why the customers would want to consolidate to one supply in a major way. I’m to think it from another angle, like I mean, as a supplier, I would like it to be that person, but I don’t know why the customers would feel like, oh, I don’t want to do business with Domino videos yet now and do business with control print and increase my wallet share with them. So not sure about that. I don’t think it’s going to change that fast, if you personally ask me.
Hardik Bora
So that is why the strategy to focus on the larger customers and maybe potentially cross-sell to them something else that might be of value to them. That’s the strategy it seems that we have been taking for the last couple of years.
Shiva Kabra
The strategy for that was slightly different in that we were finding it’s difficult to now manage so many people and there’s a certain cost of people. So what’s happening with smaller customers in India is that the amount of business we get per printer in terms of inks and other things is significantly lower than what we get from a larger customer.
And though at the same time, those customers are more price-sensitive. The large customers are more focused on reliability, on technical performance, on uptime, on service support on having like this a high-level of sales as you know, take-in terms of technical skill and being able to consult them through the entire process, so they understand what are the best technologies in the world, what are the best thing for their specific lines. The smaller customers more interested in, you know, a cheaper supplier.
So in the end, that’s not where our USP is. We are more of more expensive order — yeah, more on the high-end, more expensive.
Hardik Bora
Okay. Thank you. Thank you, always for the elaborate answers. Thank you. All the best.
Shiva Kabra
More high-performance. I say not more expensive more high-performance, okay, we more high-performance.
Hardik Bora
Thank you.
Operator
We’ll take the next question from Dhruv. Please go-ahead.
Dhruv Achrekar
Good afternoon. Am I audible?
Operator
Yes, sir.
Dhruv Achrekar
Yeah. So my question is, what have been the key growth drivers across the international subsidiaries such as the Mark Print Netherlands, Codeology Group from UK and 80 as well over the past years.
Shiva Kabra
I think the three very different businesses. Was an acquisition for us to get into the digital printing space and for us, so they’re doing well. They are growing also about EUR2 something million or whatever and they’re selling more machines. So the ink business out there is growing. So we value it on a multiple of the ink business margin that we’re getting.
So that’s the way we looked at it. Codeology is more of an end-of-line automation provider and we wanted to get-in that space because we felt that a — we wanted their print and apply business of — because we want to add that product-line into what we do.
Dhruv Achrekar
Okay. And the — my next question will be, how are the recent acquisitions including the VP ship, SRL and contributing to the Group consolidated revenue and profitability
Shiva Kabra
No, what profitability would you say?
Dhruv Achrekar
Am I audible?
Shiva Kabra
Yeah, yeah, please tell me.
Dhruv Achrekar
Yeah. So my next question was, how are the recent acquisitions, including VSHEF’s SRL and Codeology contributing — contributing to the Group consolidated revenues and profit
Shiva Kabra
Yes, that’s what I’m saying. So I told you like market is about EUR2 million. They are profitable source codeology. I think they are like 1.23, I don’t know-how many — how much are they 1.3 million pounds or something they are also profitable. And I think — yeah, is the one that is obviously making some large losses because we are investing in the packaging business.
And I’m not sure of the turnover offhand, but if you just take a basic difference in the consolidated and the standalone and most of it is the international businesses approximately. Yeah, correct.
Dhruv Achrekar
Okay. Yeah. Jedip, anything you want to add to that if I ask.
Shiva Kabra
If you want some more specific numbers, definitely is here, she’s going to just tell you right now.
Jaideep Barve
So for the Codeology group, the total group turnover was about 203,000 British pounds and we had a small profit about 13,000 British pounds profit in. Print of the revenue for the Q1 was about EUR413,000 and there is a profit of about 20% on the net profit level. And C, can you — sorry, sorry, sorry.
Dhruv Achrekar
Can you tell me again about the marketing, please?
Jaideep Barve
So EUR413,000.
Dhruv Achrekar
Okay. Thank you.
Jaideep Barve
And there is a profit of 20% market. And CP Italy, we’ve done a loss of EUR384,000 in the Q1.
Dhruv Achrekar
Okay. Thank you.
Operator
Thank you,.
Dhruv Achrekar
Thank you for your answers. Yes.
Operator
We’ll take the next question from Keval Shah. Please go-ahead.
Keval Shah
Hello, yeah. Good afternoon. Am I audible?
Operator
Yes.
Keval Shah
Thank you for the opportunity. So firstly, I wanted to understand the V-ships part. So there are two sub-businesses. One is selling machines and one is selling materials. So firstly, I want to understand that while selling machines, are we profitable in that? And along with that on the materials side, I believe last con-call you had mentioned that once you sell 60 to 70 smaller machines, after that, you would turn breakeven in the material side plus, of course, you are trying to get into cheaper materials business also, the renewable side. So will you reach that kind of installed-base or something?
Will you breakeven on the material side as well by the end of this financial year? Or how do you say when you breakeven on the VE ships? Will it be on the machine side or material side or both? That is my question number-one.
Shiva Kabra
Yeah. So we are making a profit in both. The profit is higher in the machines in this business. The profit is higher in the machines and the materials, a and in terms of yeah, the machines we’ve got — we sold two large machines here, maybe two in Europe and about four smaller machines totally, but only like a couple of them are fully active.
So we are struggling a little bit with all the niggling issues and the print issues and so just some small stuff. And so hopefully, we expected that stuff will start about like three, four months ago. But because of certain niggling issues, you know, some of the machines — our supplies are delayed. So we’ve been like one machine was supposed to be installed like in May, it’s not even reached India as yet and stuff like that.
So we are struggling a little bit with the whole logistics and the final installation. It’s a new challenge for control pint also because we’re normally used to selling machines and getting in and out and like the engineer goes, puts a machine and it’s more standardized, we get-out in two days, we are done. So it’s a new game for us also.
But yeah, the machines are more profitable than the for us, right now, the focus of the materials to get the cost-down, you know and get the recyclable structure, which is especially important in Europe or in America.
Keval Shah
So just to confirm, you said that even on the material side, you are profitable with the higher-cost material that you have right now. If you find a solution of a lower-cost material, then the profitability further increase on the materials business. Is that correct?
Shiva Kabra
So is it the higher-cost material when it goes to the customers costing about INR2 a pack. The margins aren’t particularly high because we’re importing it from Europe. Yeah. And there is a certain amount of wastage. The Italians do make money on the material because they sell it at a higher price than us.
What I said is that we want to get the material cost-down to INR1, which we can do when we manufacture it in-house. And we are waiting because we’re doing a R&D project in terms of a fully recyclable structure, which is also demand from many customers for a full — like a homopolymer fully recycled structure.
So we are close on that, but we’re not quite there. So we just want to get that structure up and running before we really focus on manufacturing it in-house? Right now, we continue to purchase everything from Italy and Europe.
Keval Shah
Sure. And my second question is on the Middle-East side.
Shiva Kabra
And we’re not manufacturing anything whether in CT, Italy or in control, but purchasing it from outside suppliers.
Keval Shah
Okay. Okay, sure. Thank you.
And second question is on the Middle-East part, you have set-up a subsidiary there. So what’s your thought process on the Middle-East market? How big would be the market over there? And from when do you see the sales starting, etc., some thought color on that front also, please? Thank you.
Shiva Kabra
Yeah. So that’s not a large subsidiary of ours. You know it’s going to have like a total of three or four people across Asia, Middle-East and Africa. That’s all we’re envisaging like of focus on that. So what’s happening is we have a bunch of customers here and we have a bunch of verticals in which we are very strong and we’re known so-far like things like steel or cement or things like piping and so on.
So we are just focusing on certain sectors where we are already working, you know, and to try to take advantage of the same myself.
Keval Shah
Okay. Okay, okay. Thank you.
Operator
And I request you to rejoin the queue.
Keval Shah
Sure, sure. Okay. Thank you.
Operator
We’ll take the next question from Deepan Shankara. Please go-ahead.
Deepan Shankara
Good afternoon, everyone, and thanks a lot for the opportunity. So firstly, on the standalone business, we have seen 500 bps kind of reduction in gross margins. So what is the kind of revenue mix we have during this quarter as compared to year-on-year?
Jay Chauhan
Could you just repeat the last thing? I just missed out.
Deepan Shankara
Yeah, revenue mix is split in terms of printer and the consumables and station with the services part.
Jaideep Barve
Sure. So for the — for the Q1 of FY ’25-’26, the breakup between the printers, consumables space and the services is 11%, 62%, 12% and 14% okay and if you want to compare it to the full financial year ’24 ’25 it was 14, 66, 7 and 13.
Deepan Shankara
How it was last year lower.
Jaideep Barve
Last year lower in which sense like see this is a cyclical thing. I mean, we cannot exactly predict and it also depends upon the momentum of production at the customer spaces. So it depends upon how much is produced, so our demand for our consumers increase or decrease. So we take year-on-year numbers for comparison.
Deepan Shankara
Okay. Okay. Thanks a lot..
Operator
We’ll take the next question from Saket Kapoor. Please go-ahead.
Saket Kapoor
Namaskar, sir and thank you for the opportunity. Sir, am I audible?
Operator
Yes, sir. Saket.
Saket Kapoor
Yes, sir. Sir, just putting — if you consider slide number 22, wherein we have shown our brief financials for the consolidated part. So therein, we have seen our EBITDA declining from 20 cr to 18.5. So if you could just elaborate what are the key factors that has led to — led to the same?
And I have a couple of points firstly, sir, to mention in terms for that, sir, when we are mentioning about the bridge —
Shiva Kabra
Can I ask this — answer this question, then we just take the next question. Is that fine? Yeah.
Saket Kapoor
Yes.
Shiva Kabra
Essentially the EBIT that has decreased it’s at a consolidated level or it’s mainly because we had certain losses in the packaging business. I think the track-and-trace in fact, this quarter is close to breakeven, so it was not that last year in Q1 because we had just purchased the company and they had — there were certain reserves in certain other things in-stock, we didn’t actually lose that much money last Q1 or maybe I think comparatively it was less.
Now what’s happened, like I said, is that our coding and marketing business was okay performance this quarter, but to improve the gross margin of our coding and marking business, which have dropped a Couple of percent, we are going for a price increase of — so like I said, starting 1st August, so it should start in a few days. And practically speaking, we will not see the difference before like 1st October. So we’ll really see the difference in Q3 and Q4. But it’s also like — so like I said, it’s many other expenses, certain other material expenses that are increasing as a result of the packaging business scale-up. Our track and trees has definitely turned around because the fixed costs are now at least to that extent being almost by the mono business we’re doing. So that’s where the margins are changing, the gross margins of our coding and marketing business have not really changed in maybe like 1% up or something, but not fundamentally cheap. Consolidation of different businesses that are making this difference.
Saket Kapoor
Yeah. So can you give the number for track and taste contribution for the first-quarter in terms of the revenue?
Shiva Kabra
So we don’t want to give it independently, but 10% of the business approximately in the standalone was packaging and track and race combined. And product consider about, just let me confirm that. I think approximately was about 10%.
Jaideep Barve
Approximately. Yeah.
Saket Kapoor
You mentioned 10% on standalone basis. So what would be the number and consol?
Shiva Kabra
So obviously, consolidated will be higher because then the packaging business from abroad and stuff comes into play. So that would be higher than this. Mark printers, digital printing. So then this it’s more difficult to compare. Jaideep, if you have the number just you can provide.
Jaideep Barve
So Sake jeep, for the CP Italy operations for the Q1, we have incurred a loss of 384,000.
Saket Kapoor
So in rupee terms, how much it will be?
Jaideep Barve
So it will be about INR4.5 crores, INR4.5 croress crores.
Saket Kapoor
One small request to you, jee. Sir, since we are all dealing in Indian rupees gaining, losing money in Indian rupee, if we could just translate that number and provide all the sales and the revenue being translated into rupees, that would suffice lot of questions. And also in the presentation, if we can provide this breakup of sales for, Mark Print and CP going ahead that answers lot of the questions and the margin profile is also cleared, which you are sharing right now during the call.
Jaideep Barve
Okay Sake? Yeah. Sakesh, your point is noted for the next con-call, for the earnings call, we’ll definitely like look into giving you information in that manner.
Saket Kapoor
And also, sir, the breakup of printer consumables players, this is a repeated questions from anybody will give so
Shiva Kabra
I think that the problem is that our competitors don’t have to give this level of information. So obviously, it makes us unhappy. So that’s the main issue that’s there. Like because domino and video domino doesn’t have to disclose how much their digital printing businesses that they will print, you know.
So that’s sometimes maybe don’t disclose less, but we’ll try to give it more to me. It’s not that I don’t think it’s a competitive issue for us, so we will provide that. Sir, in the lifted space, I think so, we as investors and analysts must-have an understanding what the — what narrative you are giving and what path we are guiding.
Saket Kapoor
Are they considing or not or what — and what factors will lead to the confidence of the same. Sir, the Q1 numbers somehow have not gone well with the Street. This is very well-known with the — my enterprise value getting eroded over a period of last two trading sessions.
So investors and analysts must-have the right correct understanding of what the state of affairs are for the existing business and also the future business where we are investing in a continuous manner. And we have already — you have already outlined the factors to us that has led to the lower profit. So that was my reason why we wanted more understanding on the same because that’s going to impact your enterprise value, sir. Domino’s and others are not listed space, so they do not have that compulsion on their on their hands sir.
Sir, second point was, sir, in this quarter, we have seen this purchase of stock and trade line-item also being higher, whether it is standalone or in the console. So what explains this nature to Jaide sir and also the employee benefit costs have also gone up for the first-quarter. Yeah. So if you could explain things.
Jaideep Barve
So the first point was related to the purchase of the stocking trade. So what we have is that in India, in the standalone thing, we got — we got a separate division called Packaging division which purchases machines from and sells it to the local domestic customers in India. So that is the reason why like in this quarter, we have sold two machines.
So the purchase cost was there for these two machines.
Shiva Kabra
And, like I said, as of right now, we’re also purchasing all the materials that we’re supplying. So the machines, even the materials are purchased directly from our suppliers in Europe. So whatever the packaging business essentially is a media trading business. When we start making the materials out here, then that there will be a change and we’ll see some more changes out there.
Saket Kapoor
Sir, one question.
Operator
Sake, may I request you to please rejoin the question.
Saket Kapoor
Please give me opportunity address.
Operator
Sure.
Saket Kapoor
Thank you, Vaya. Thank you.
Operator
We’ll take the next question from Manan Shah. Please go-ahead.
Unidentified Participant
Hi, thank you for the opportunity. Sir, you had mentioned earlier that we were focusing on the pharma segment for our track-and-trace. So any major breakthrough or client addition that you’ve had over here in the current quarter or in the near-future, if you can highlight or give some color on that, that will be very helpful.
Shiva Kabra
Yeah. So primarily we are focusing on two major customers right now. We are still rolling out our solution out there. We have a few different cases going on at smaller levels, but we are fully occupied with these two large customers. So, of course, in stages only when they sign-off then the billing gets complete and things happen.
So it’s — definitely these are the two — now the two large customers both in the top-10 easily of India, if not bigger. And once we roll-out with these two, then we’ll focus on other customers hello.
Unidentified Participant
Hello, Shiva. I think we lost Shiva.
Shiva Kabra
Can you hear me? You can’t hear me.
Saket Kapoor
Yes, yes, yes.
Shiva Kabra
No, no, I don’t know if you guys heard me. I said we have two of the major top-10 customers. We’re doing some innovative things with them. So once we install those — we complete that entire installation and it’s live and they can see what’s in the market, it will then be easier for us to approach other large customers. So there’s some bunch of small to mid-sized projects going on of these two like say more company-wide type sales projects that we are working on.
And once that’s fully online, then definitely will be of a massive benefit to us. There is a lot of technical new things that we are working on and we’re trying to cross each bridge as it comes. So it’s a good solution and definitely quite bullish on that.
Saket Kapoor
Understood. And my next question was on the packaging side. You mentioned that we’ve sold two machines, I believe they sold-in a domestic market. So what are the end industry where we’ve sold these two machines? And also we — recently participated at the CMPL Expo at Geo. So any color or any — how was the response to the expo or any sort of leads that you were able to generate over there, that will be very helpful. Thanks.
Shiva Kabra
Okay. So Tushar, to answer your question, we have four machines or five machines be sold-in India I think like two or three are in honey and two are nutraceuticals and one is in cosmetics okay. So nutraceutical stuff like not exactly farmers, because more like cough like those types of guys. So two nutraceuticals, two in honey and one is actually in the Middle-East, it’s in Gulf, two are in the Gulf or two are not in India, like one is abroad, three are four in India.
Unidentified Participant
Okay
Shiva Kabra
Two are in honey, one is in cosmetics and two are one nutraceuticals. The second part of the CMPLC, it was a very good response actually even elsewhere we’ve been having good response. So what’s happening is that you know, one of the things we have invested in the last year or so as to sort of co-packaging facility for cosmetics in Nalagar and also a co-packaging facility for food in our Nalagar factory.
And this is basically — what we’re doing is getting a lot of inquiries for 20,000, 30,000 pieces, people want to give a sample with the other materials, a couple of lakhs here and there. So more than people purchasing the machine, they want to test the packaging out on the market. So now the problem, I mean if you’re in the packaging industry, you will understand that printing and making a volume which is quite low is very difficult.
But we’ve taken the strategic call recently that we will take those lower-volume cases on more as A marketing cost rather than any great revenue that we’re getting for the co-packaging or any benefit. So — but that’s the situation is. So it’s a positive exhibition from what my knowledge is I didn’t actually attend myself, but this is what I got feedback from the team.
Unidentified Participant
Sure. Thanks. That’s very helpful.
Operator
Thank you, Manan. We’ll take the next question from Tushar Palwar. Please go-ahead.
Tushar Talwar
Hi, am I audible?
Operator
Tushar Talwar
Tushar Talwar
Thank you so much. My question was around actually going back to the pharma side. There’s been some literature which has been going around in pharma magazines and all that, the anti-counterfeiting measures that were put in-place by the government, they’re not really working out as expected.
So my question was that in terms of the two customers that we are working with, are these issues that they are also looking to solve in the course of our pilots or whatever we are doing with them and what is your larger perspective on this counterfeiting issue and how it will pan-out for us in the future.
Shiva Kabra
So this is a very tricky thing for me to answer because I don’t know-how much — like normally, if every customer is assumed even whether we sign an NDA specifically or not like it is confidential, you know still they allow us a specific disclosure.
But yeah, there are some innovative aspects to it. We have like about three or four patent. We have three key patents in our Track and trace division and we are utilizing all three in this particular instance and we’re combining that with our digital printing technologies. So we are really going for a pretty comprehensive solution for the customers, definitely, I can say tell you that in general, in the pharmaceutical space, the counterfeating is one of the key issues that’s there.
We are also working quite aggressively on ensuring that these issues or shortcomings of the current market solutions are addressed. I can’t really go beyond that until I get a specific permission from the customers at hand. And I can’t tell you beyond this.
Tushar Talwar
Sure, sir. No problem. On the second question I had was regarding the comment that you had made that right now we are not sourcing the raw materials. We are not — we are just doing trading in the raw materials right now for the packaging division. And you had said that in the future, we might look into doing this in-house.
With respect to that, I just wanted to understand that when we talk about taking it in-house, are we talking about setting up polymer compounding facilities within our premises or is it more involved or complex capex than that if and when that was to happen.
Shiva Kabra
So right now, like I said, we are still working on we are going to spend a certain amount of money because we need to finalize this recyclable package. We are making progress, but it’s being slow. So that’s what our initial capex is and also we can make pilot levels of production of both of the things. We just want to finalize our exact configuration going abroad because that depends on — depending on that will sort of set-up what sort of line equipment we are ordering.
So it is more of a film and extrusion or sheet extrusion, those types of processes are there. It’s not super complex, but it will require a, you know an expansion of the facility or a separate area because the — the amount of material that’s flowing through in that type of a business would surely be higher than what we do in our inks and whatever other stuff it is.
And in is frankly also a little bit logistically difficult to manage entire country from there for this type of material. So we exporting from here to all the other machines that we sold all over the world. So obviously then it’s not only we’re manufacturing for India, we’re manufacturing for all of our square control print these machines everywhere in the world.
So but I mean again it’s a bit futuristic. We’ve not finished our development aspect and at the same time, most we have some plans in mind and obviously, we are working on certain things. But as like I said, we also want to make sure that the volume is at least enough to — so the first target is to get the pilot stuff done, develop all the stuff and at the same time, cut-down the losses and increase the sales pace so that you know, we’re not just investing and investing and investing then not being able to even utilize the capacity at a fraction.
So that’s obviously something that is there. So right now, our focus is more on investing more on the sales network. Our margins are higher on the machine and in the short-to-medium term, that’s actually going to drive our business more than materials. We can always manufacture the materials and increase our margins whenever we want, whenever we are ready for that.
Tushar Talwar
All right. That’s all from my side. Thank you so much.
Operator
We’ll take the next question from Devanshu. Please go-ahead.
Devanshu
Yeah. Hello, sir. Good afternoon. Can you hear me?
Operator
Yes, Devansh.
Devanshu
Yeah. So two questions. Just the first question, can you talk a bit about the — the people are running or heading the new businesses that we have? Are there people from in-house, are there external hires? Can you talk a little bit about their background and specifically more interested in about the larger new companies that we’ve taken on, so packaging and track and trade specifically. And when it comes to recruitment requirements, you know, are we done with that or are we still hiring people? So when will the employee cost stabilize in that sense?
Shiva Kabra
Okay, so I’m just going to answer your both the questions. So for the — so the track and case business is actually being run by a doctor like an MD type of doctor or and he is someone recruited because he was interested in this space and they had started something. So it’s more of an position where we actually let go for own development and we felt their product was better.
The person on the technical side is more of a blockchain specialist and of course, there’s the rest of the technique in there. So that’s also one of the reasons of course, why the employee costs have increased because a lot of these people are expensive people and so on as compared to you know maybe more standard types of sales and service engineers that we have in the core coding and marketing business.
CP Italy is still run by Christian Guratini and he is a found — he was a founder of Vshapes and also the creator of this technology. He is an inventor himself and he’s on the key patterns of reshapes and he is also running the business overall. So we are trying to supplement that with more managed experience. The person who is running the packaging business in India is ex — the Head of Flex Engineering.
You know, UFLEX had a sort of engine division with the mid packaging machines, he’s the Head of — he was a former Head of Sales for Flex Engineering engineering and yeah, Mark is being run by its power look also been in the business and he was working previously at for many years maybe 15 years or something before he started market brief about those guys or anything else that — and in terms of employee hires so there was some cost of there.
We don’t need people much right now. In fact, we’re trying to focus on managing the amount of people we need. There has been some stuff because in the packaging, there has been a scale-out. So we have got some people who are working abroad at various geographies and certain things like that. So the same thing we’ve added some more people in Italy. So we might need like four or five more salespeople only across the packaging and track and race sectors.
So overall, I don’t see the headcount increasing now. Maybe three, four people if we actually — if you manage — maybe three, four people to manufacture these pilot of materials that we are working on. So I don’t see like a major increase in people for sure. So I think we’ve put on a lot of those employees that are there. There might be some changes up-and-down, obviously the division becomes profitable.
Some of these guys have a performance bonuses and profit-sharing things in their own divisions and stuff like that. So that might increase, but the fixed-cost should not go up now.
Devanshu
Got you. Just a follow-up on this INR100 crore employee cost annual run-rate is good for now to assume?
Shiva Kabra
On a consolidated basis, I don’t think it’s going to be that much.
Devanshu
We did not ’24
Shiva Kabra
24 in the first-quarter, but I don’t think it should remain that much. So I — we can get back to you in more details on that, there is just certain employee cost abroad. So I think it would remain the same, I mean, I don’t know-how much of it is fixed, but I think like it could be — it won’t be more than that.
Devanshu
Sure, sure. And just to show
Operator
Devan, please request you to rejoin the queue. We’ll take the next question from Desha. Please go-ahead.