Control Print Limited (NSE: CONTROLPR) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Jaideep Barve — CFO
Shiva Kabra — Joint MD & Whole-Time Director
Analysts:
Arnav Sakhuja — Analyst
Madhur Rathi — Analyst
Saket Kapoor — Analyst
Unidentified Participant
Deven Kulkarni — Analyst
Presentation:
Operator
Ladies and gentlemen, I welcome you all to the Q4 and FY ’25 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 JD, 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 detail us about the business and performance highlights for the period ended 31st March 2025, the growth plan and vision for the coming year, post which we will open the floor for Q&A. Over to the management team.
Jaideep Barve — CFO
Hello, everybody. I am JD Burway, the Chief Financial Officer of Limited. Welcome you all to the earnings conference call for the 4th-quarter of the financial year 2024 of Control Print — 24/25 Control Print Limited. We appreciate that you’ve taken out time from your busy schedules to attend this call. Thanks for that. MR. Shiva Kabra, the Joint Managing Director of Control Prin Limited, also joins me on this call. For first time join us on this earnings call, more information about CPL can be obtained by visiting our website. For information, the detailed presentation has already been put up on our website as well as in the investor presentation notification or the exchanges for this call. Let me provide you some highlights on the performance of CPL for the Q4 of FY ’24-’25 on a standalone basis. Revenues from operations. On a standalone basis, the total income for Q4 is approximately INR114 crores, which is a good growth from approximately INR98 crores in the Q4 of financial year ’23-’24. The total revenue for the entire financial year ’24-’25 is INR395 crores. Just for information, for ’23, ’24 and 2023, the total income was INR347 crores and INR295 crores respectively. Pipes, food, dairy, steel and metal, cable and wire are few of our top-performing business verticals. We have finalized the staffing and sales strategies to build-up and ramp-up the businesses for the tracking trace and packing divisions in FY ’25-’26. Our outlook towards the sales and profitability of these two divisions is positive for FY ’25-’26. Expenses and profitability levels, the cost-of-goods-sold on a standalone basis is around 41% in Q4. There is a slight improvement from the Q3 of the current financial year. It was about 43%. On an annual basis for FY ’24-’25, the cost-of-goods-sold is approximately 40%, which is in-line with the last year. That said, the management remains 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 and overall profitability. Manufacturing costs remain at 3% of the total revenue for ’24, ’25. It is similar to the compute years of the last two preceding years. Employee costs are 14% of total revenue in Q4. In comparison, this was 17% of the total revenue in the 3rd-quarter. That said, on an annual basis, this has remained steady at 17% for the current year and the previous year. Other expenses are 14% of total revenue in Q4. In comparison, this was 15% of total revenue for the 3rd-quarter. This remained steady at 13% and 14% for the current year and the previous year, respectively. The EBITDA growth was 10.4%. The way forward for us, we’ll definitely push forward in the track-and-trace and packaging segments. We’ll have focused marketing and sales strategy and capitalize on the given market opportunities. We will monitor the revenues from both these divisions, both in India as well
As overseas. Overseas subsidiaries will be continued to be monitored with focused growth targets. Business plans have already been mandated for execution. For coding and marking, the installed-base will be increased, focusing on increased larger market-share. With this, I will leave the floor open for questions.
Questions and Answers:
Jaideep Barve
Thank you, Jedi. All those who wish to ask a question may use the option of raise hand or you can drop a question in the chat window. Also, we request all participants to limit the initial questions to two per participant. Participants can now raise hand to ask their questions. We’ll take the first question of Arnav Sakhoja. You can go-ahead.
Arnav Sakhuja
Hi, thanks for taking my question. So in Q4, we had a slightly lower gross margins, which was because of higher share of sales of printers. So I just wanted to know, going-forward, what is the level of gross margin that we can expect in our business?
Jaideep Barve
Well, we are looking at the gross margins on a closed basis. But honestly, it all depends on the sales and the product mix. So if the consumables percentage of sales increases, obviously, the percentages would go up. So it also depends — it’s a combination of two factors. One is like optimizing of the costs. And secondly, on the breakup of the product mix between the printers, consumable spares and after-sales services. Shiva, you want to take this ahead hello Shiva, how you doing can continue. Yeah. Yeah. So I guess I’ve answered your question. Okay. And also just wanted to ask one more question. So in Q4, we saw a negative tax — tax expense of around INR45 crores and this is also reflected in a deferred tax asset. So what tax-rate can we expect going-forward? See, I’ll tell you, our Guahaki project was under Section 80i, so we had those benefits and we were eligible to claim the MAT tax entitlements. So what has happened is that in our MAT, we had a credit of about INR49.57 crores. And since now there is a virtual certainty that we can realize the same out of profitability in the next two, three years and the project entitlements will seize — already seized as of today, so we recognized as a deferred asset. We are positive that like in the next two years, we will make sure that we don’t have to pay any tax and the deferred tax asset would be used for that.
Arnav Sakhuja
Okay. Thanks for answering my questions.
Jaideep Barve
Yeah. Thanks..
Operator
We’ll take the next question from Madhur Rathi. Please go-ahead.
Madhur Rathi
Sir, thank you for the opportunity. Sir, I wanted to understand regarding this or coding and marking codeology that we acquired and we had — they had some products that we were missing. So what is the — like a growth plan for this segment going-forward, sir, how big is the opportunity in India? And sir, can we expect the margins in this segment to be similar to our India coding and marking business? And sir, second question would be, sir, on the track and trees that we are — like we are pushing further going-forward, sir, how is the revenue model and margin for these segments? Is the additional cost added on the printers in the beginning or is it more like a software as a service kind of a revenue that will be getting going-forward, but in earlier features, the cost of — the cost of the COGS or gross margin might be declined. So on that front.
Jaideep Barve
Thank you you want to take this question? Hi Shiva Vive I’ll take this question
Operator
Yeah, please continue.
Jaideep Barve
Yeah. So, your first question was related to the business. Now the as a company, it provides a holistic solution. So it is much more in addition to the pure coding and marking business what we do. So it involves like the conveyor systems, the coding and marking, the end of line print and apply systems. So it’s a holistic solution what we offer in the euro. It will be beneficial for the Indian company to like synergize and make sure that those products and those solutions also applied in the Indian industry and that would be a unique proposition for our business. And regarding the growth for the Codeology Limited performance in the UK, it had — there was a bit of recession for them in a year and a half before, but now it has been ironed out and there is good order pipeline with us and we believe that like the next year would be a good profitable business for the standalone codeology UK operations. Regarding your query on the track-and-trace,
Madhur Rathi
Are we ready to begin?
Jaideep Barve
Yeah. Hi, you want to talk about track-and-trace, Pishiva? Yeah. So asked the question about like how are we capitalizing on the track-and-trace opportunities? And yeah, would we see like a reduction in the costs for that business.
Shiva Kabra
Sorry bother, I think my audio got disconnected without me that. Oh, I’m ready anytime if everyone can hear me.
Operator
Yeah, Shiv, we can hear you. Am I audio got disconnected. I don’t hear anything for the last two, three minutes. One question queue to line-up or something is happening, whatever, but Shiva. Shiva. Shiva, are you able to hear me now?
Shiva Kabra
Yeah, I can hear.
Operator
Okay. So there is a question being asked,, you can repeat that.
Jaideep Barve
Yeah. So Shivab, Madurji is asking a question about the opportunities in track-and-trace going ahead and would we see a reduction in the operating costs for this segment
Shiva Kabra
Yeah, so, the track-and-trace business has two components to it. The first is the compliance which is the essential which is the essential element that everyone needs to — needs to meet. So everyone has to be compliant with the new government rules and also for certain export markets, these rules are in-place. Now in that market, there are four major players of similar to how Domino and Nimaj are there. The — I’ll say ECG, you know, which is also a well-known company, India Jackson, Vision and to a certain extent Pharma Secure and, these would be the four major players in this business. Then there are some smaller players who do have like a fair amount of sales, but I would say that these are the four key players in this business. So for the compliance perspective, these are the four players that are used by most of the large customers. And in terms of what we need to provide is, obviously we are providing a compliance-based solution, but we’re giving some extended benefits beyond. We’re giving some extended benefits beyond compliance to a lot of these customers and that’s sort of what our USP is. So if you’re anyways implementing the solution and you can get a lot more benefits out of it, then that’s sort of where we are coming in. And it — there is some stuff that we’ve got also got three key patterns in this area, which we’ve been working on. On a technology platform, we are trying to come in on a sort of technological superiority basis and compete with some of the established players. This previous year was more about I don’t know why my mic is disconnecting every now and then. But the previous year was about establishing ourselves in the market, establishing our solution and obviously there were certain holes that we had to fill-in terms of providing the best
Madhur Rathi
So we can’t hear you.
Shiva Kabra
Okay, I just got disconnected and reconnected again. No shorts up. But previously was more about establishing ourselves. The market itself is quite large and is growing. Right now, I’ll see against the pharmaceutical market is the addressable market
Jaideep Barve
I think Shiva we lost you can’t hear you
Shiva Kabra
Okay I’m just reconnecting
Jaideep Barve
Yes
Shiva Kabra
This thing doesn’t work I’ll just connect on from the zoom from my phone but so my the thing is that the addressable market is…
Operator
I think there’s a problem at your end I suggest you connect from the phone. In the meanwhile we’ll take the next question until Shiva can join back then.
Madhur Rathi
So I was — yeah, I have a sub-quarter regarding sir, what would be the market size for this truck and trades currently? And a sub-question would be, sir, regarding the revenue and the cost front, sir, are we adding the track entry solution to the revenue at the start of the — whenever sales are done or it’s more like a software as a service model and initially the cost of production or cost regarding the employee cost of software would be higher
Shiva Kabra
Logging in again for my phone so just admit me in okay no actually I said I’ve been logging in from my phone so just admit me on the phone please
Madhur Rathi
Yeah continue mother? Yes. So I wanted to understand regarding what would be the addressable market for this segment. And what would be the rate which had —
Shiva Kabra
Sorry about that guys. I just got disconnected out there. Can you hear me now? I hope this is…
Madhur Rathi
Yes, sir.
Shiva Kabra
Fair enough. Okay. Yeah, the market is quite large in terms of the attracting trace. We are estimated to be about INR400 odd crores as of right now. Like I said, it’s mainly geared towards the pharmaceutical sector and certain other regulated sectors. So there are certain things like agrochemicals or and which would include fertilizers, but especially pesticides and seeds, which are also govern under this. And now even one to other new sectors like explosives and some other types of things have come under this category. So I’m apologizing again because I don’t know why I’m having these speaker-related issues or my mic and but I guess now I’m just connecting from my phone. So the market is there. And definitely we are expecting a significant traction because we had a good response last year. We were implementing some projects and I think that was more of a proving ground that we had to do with some major customers. Now the type of pipeline that we have is significantly better than what we had. And more importantly, our experience and understanding of the market is much better. And like I said, we have highly-differentiated solutions compared to the four existing providers of — and obviously, it’s something — I’m going to wait for us to maybe, you know, have some more sales. I need to speak also to some customers to see if we can disclose anything because it’s — these are confidential projects that when we work on these types of things. But we’ve got a good platform there.
Madhur Rathi
So on the revenue model, sir, this INR400 crore market size, sir, is this only the equipment market or equipment plus the software part of it? And a sub-question would be, sir, how are we pricing this? Are we adding the whatever solution or software that we are going to provide in track-and-trace at the start of the sales on whatever equipment plus whatever cost is there or it will be more of a software as a service model and that will help us in margins going-forward.
Shiva Kabra
So there are two components to this. There is an equipment component. Obviously, as you know, our primary business to supply the printers. So obviously, there’s the printers, there’s vision systems, there are some certain types of mechanical conveyor systems, ejection, rejection mechanisms, also some agglomeration so that the primary is connected to the secondary is connected to the tertiary. So it’s a more of a — and in certain cases, this whole situation can be more complex. It all depends on the production line or that the customer has. So when you talk about INR400 crores to INR500 crores, that’s the size including the equipment. And over-time, the software part of that business is increasing. So I mean, this is just an estimate of mine because you know, again, ACG especially has — who is the biggest in this business has other businesses, Optel is a global provider. So this is our estimation of what the business size is. But it’s growing. But — and this is in India. Essentially, what happens when you sell a piece of equipment or so this thing, you sell the software with it and then you charge for the software on a per code basis, a per print basis like a per QR code basis or you charge on a — an AMC for the line for the year. So that normally depends on how the production that’s there on that line, but also the amount of what the cost of that specific line is. So you can say in general, if you sell a line for INR100 rupees, normally the EMC charge would be INR15 to INR20 would be the software charges, which would be a recurring charge after the first year.
Madhur Rathi
Got it. Sir. Sir, just a final question from my end. Sir, regarding the losses that we have been incurring in our subsidiaries. So should we expect that INR4 crore to INR5 crore per quarter to be the bottom number or — and going-forward, it should improve or how do we should — how should we see this going-forward?
Shiva Kabra
Yeah. So like I said, in the original platform, we had discussed the packaging business, so the losses are largely in the packaging business. The track-and-trace would have a relatively much smaller-type of an investment and that’s happening in India. That’s not happening at a consolidated level. So that that’s a sort of different business platform compared to what we are doing right now. And definitely, we are expecting, like I said, it was like a two-year plan for turndown. I do want to say that we bought the company on I think March 24 in 2024. So literally we just bought at the beginning of the year and it’s taken some time for us to just get the operations to a normal set of operations. So I do see that we’ve got a better type of a pipeline and growth there. That’s going to take some more time to turn-around. What we are doing is we’re getting a better results, a set of results that we’re expecting this year, but we’re going to continue investing in that business. I’m expecting that the operational losses will come down, you know, but what we’re going to do is we’re going to try to be focusing on scaling up that business. So in terms of a cash-flow situation, it might not be any different. But in terms of operational losses, I think we lost about — or the losses, Jay Deep is on the call,, you can answer this, but I think it was about INR20 crores up approximately, if I remember right in the year gone by. So we definitely expect that to reduce. Over the course of the year, like if you look at it overall annual basis, right now, we have to understand that we are selling more machines and the machine sales and the revenue associated with that is sort of lumpy. So that’s a bit up-and-down in terms of what sort of profits we derive from that. But as the number of machines increases and these machines get online, then the materials business will be a stabilizing factor-in that business. But so-far what’s happened is that the machines we sold, we’ve been taking a long-time to sort of dispatch them and install them. So we’ve sold one machine which we just installed in the Middle-East, like I think about a month ago. We’ve got two more machines, one which is just commissioned right now in India. We’ve got a third machine which has been sold, but about six months ago, but we’ve not been able to dispatch like it’s on — it’s been shipped, but it’s not been delivered and installed. So what’s going to happen is as these machines start working, we should also start getting some materials business. Of course, that’s a lower-margin, but it will stabilize that situation as and when we get more-and-more machines installed or so that’s expecting better results definitely than last year, but we might — on a cash-flow basis, we might continue investing in that business in most likely our call. There are things that we still need to build-out there.
Madhur Rathi
Got it. Sir, just a final — another question.,
Operator
May I request you to rejoin the about the next question from Kapoor. Please go-ahead.
Saket Kapoor
Yeah., sir. Thank you for the opportunity. Understood. Sir, when you mentioned that say the burn rate will be closer to this INR20 crore INR25 crore. But what should be the revenue quantum that we can expect from — I think so this year,
There has not been a major change. It is, I think so the employee cost and the other overhead costs that are getting — hitting the bottom-line. So if you could just give us some color how that performance is going to be? And firstly, sir,
Shiva Kabra
In one second, Saket, you just hold-on to this question. Question, just wait for two minutes. But just if you can repeat this question because it wasn’t clear to me, Matth, something about the overheads of the — and the operation expenses. Are you talking for the standalone business or the consolidated business?
Saket Kapoor
Only for the consoled part sir. Consoled partner, sir, I’m revenue generation CASA the current year today you are telling that we can curtail the losses or curtail the run-rate to INR20 crore, but what would be the revenue pile looking like for the consol business?
Shiva Kabra
No, no. So I think that we are maybe going to slightly increase the expenses in terms of employee expenses on a consolidated basis, but we expect the revenue growth to kick-in to some extent. And obviously, the margin on that revenue is — should be good and that should help curtail the consolidated losses.
Saket Kapoor
And sir, secondly, to the track and press solution part of the story, sir.
Shiva Kabra
So just to get the first thing, we’re not really trying to reduce the amount of people and costs further from what we have right now. We’re not trying to increase it massively, might increase by two, three people here and there, but not overall. But like I said, what we are looking at is to grow the revenues and that’s what we’re expecting to see this year-on a consolidated basis.
Saket Kapoor
Correct, sir. So the track and trade solution part of the story is totally domestic, that is, we are catering to the coding business where it’s an addition to what we are doing in terms of the consumable supply. Is that understanding correct for the Track and trace solution business? It is
Shiva Kabra
No I wouldn’t say it’s part of our coding business. It’s definitely a separate division or vertical for us and is viewed differently by the customers because for them software expertise, integration expertise, printing expertise and vision system expertise, all four are equally critical for them. And of course, it’s a compliance-based business. So to understand all the entire compliance angle, especially in pharmaceutical is quite important for them. So I wouldn’t — I wouldn’t say like I think that the fact that we have mastery of the printing element is a good selling point, but it’s not a necessary point. I don’t think people are interested in taking the solutions from Domino or control if we didn’t have a strong — if the overall package is not strong. So to understand it is what we’re giving in terms of the printing is definitely one part of that solution, but it’s not the — it’s not a sufficient aspect for the customer to think. It’s not ancillary — it’s not a part of the coding and marketing business. It’s a separate business.
Saket Kapoor
It’s not a part of the package to the customers who we are supplying the printers and the consumables.
Shiva Kabra
No, no, definitely not. There’s a lot of elements to that specific type of installation. So it’s way too complicated for most customers to look at.
Saket Kapoor
Yeah. And sir, here the market size is INR400 crores, that is the total target margin
Shiva Kabra
To INR500 crores. So most of it is, of course, some part of the equipment and then some part of it is now a lot of people have installed-base, so they also have a certain number of AMCs and software charges coming from the number of lines they’ve installed. So this is our estimation of what the business size is.
Saket Kapoor
Correct, sir. And sir, now
Shiva Kabra
INR400 crores, but it could be bigger than that also because we don’t have the exact disclosed figures from our competitors, especially not for the Indian market only.
Saket Kapoor
Okay. Just to conclude for the track and taste part, so taking into account the groundwork that we have done and taking into that ballpark number to say, 00, INR500, what is our — what are we answering in terms of our market-share in terms of top-line in, say, two to three years down the line, where do we think we will be placed — our company will be placed in this segment.
Shiva Kabra
So like I said, there are four major players, which on a technology basis, there are even other secondary players, but I won’t say like then they’ve got a good sales — but I wouldn’t say that their technology platform is the same. So like I said, ACG, Associated Capsules Group, which is a well-known company in India and it’s a very good company is the biggest player in this business than Jackson Vision, Optel and Pharma Secure. So the four of them are in this four good competitors. Like I said, we need to prove technological superiority in our solution with additional benefits to the customers versus these four. And that’s what our focus has been in the previous year for that, we’ve also had to do certain more development works on other types of things to make sure that our solution has a sufficient benefit because you have to understand that today, I’m just giving an idea of course, like just night like a name. But suppose Dr Eddy’s has machines from you know, a supplier, he is not going to change you know, a compliance-based thing for like a saving of 20% on the equipment normally or 25%. It’s — there’s going to be something bigger as a delta for him to move and evaluate a new supplier and then integrate that new supplier into his line and his systems because everything is connected to his ERP, his software and his compliance also. So for us, it’s more about creating that sort of delta in terms of giving the customers that we are targeting like a much superior solution and sort of taking them away from compliance into different areas where we can serve their requirements. So I think last year was approving and an understanding of what we can do and also certain developments that we had to do in the last year and a half to actually make our solution better. We’re still doing certain developments, but now I think we’ve got certain areas or certain platforms, which we can definitely scale-up and which have a clear edge compared to our — the four major other competitors in this business.
Saket Kapoor
Right, sir. One more question.
Shiva Kabra
So it’s difficult to see two, three years down the line because we believe we’ve got something superior. We’re working with some customers. We need to put — install it, prove it. And if people are getting a sort of strong ROI and they see that visibility, then people will definitely pick it up in a strong way going-forward. And if they don’t see that, then yeah, we still got a good solution, but then we’re just like another supplier and we’ll still do okay, but it’s normally like a resource.
Saket Kapoor
Yes, sir. I got your point, sir. And for the packaging, the V-shape part of the story also, sir, if you could just throw some more light for what kind of the target market, hello.
Shiva Kabra
Yeah.
Saket Kapoor
Yeah, sorry. Sir, I was looking for the feedback from the packaging part also. What are we eyeing in terms of current market and in this — what is in the supply-chain, what are the key raw materials and how are we aligning the raw-material supply-chain for the same thing?
Shiva Kabra
Yeah. So in the packaging business, we are still working on stabilizing that. We had a — I’d said like we need a two-year plan to stay — to stabilize that business. I think in the track-and-trace, definitely we should see that we are coming to that level of maturity and this thing. In the VSHIPS business, definitely we’ve got some good solutions. We continue to develop the platform and we’ve got newer products that we’ve developed in the meantime. Now as far as single-dose packaging goes on mono dose, it’s — there’s a huge market for it. So this is a much, much bigger market than the coding and marketing business that we’re in. What we’ve got also is a highly premium product and it’s differentiated. Now the question is whether we can — it’s also more expensive. So it also — it depends on the customers who want a premium package. For them, it’s a benefit that might be there. But with the INR2, the INR5 ketchup and shampoo is not really going to probably benefit from what we are offering. So right now, what we’re doing is we’re just trying to create more of a market. I think that the basic knowledge and awareness of our product is extremely low. So I don’t know like I don’t remember in our study those four pieces of marketing and all that very long over. The thing is right now, we just need to reach-out to a lot more people, we need more marketing of presence in terms of helping that create our growth. So like the awareness needs to increase, you know, most customers which are not even aware that there is a solution like this or those customers are aware, might not — might think it’s like a — it might not be aware that it’s a serious industrial solution that can operate at high speeds and high volumes and can compete directly with single-use packaging of stuff like thermoform or tubes or glass bottles or of course, sashes and stuff like that. So right now in terms of the marketing, we’ve got some salespeople in-place. We’ve got certain other things in the marketing that we’re working on in terms of at a ground level in terms like just websites
Websites, SEO, other types of things that we need to increase upon like our own presentations and so on. And we have to target very focused market. So because the cost point is higher, we are targeting more things like nutraceuticals or honey stuff where it’s not a very cheap product. So people can afford to spend slightly more on the packaging if it’s premium and it’s giving them that type of visibility like maybe cosmetics, serums, things like that or moisturizers rather than standard shamp — the INR2 sharp. So like — so there is a market and definitely we have had a few sales as they get installed and we see more products coming to the market. I’m hoping that itself will create like more awareness. So the main thing I think is to sell more will help us sell more if — so the initial part is always the more difficult aspect. And like each state in the beginning is a lot more effort. What we can do and which we’re working on is to try to see for some reason, our lead times and other things always seem to be a bottleneck. We need to reduce that. So from the time we get an order to the time we customize the machine for those specific products to the time it’s delivered and installed, that time is reduced. So the faster it the — the end-product comes out-of-the market, the more the awareness of our package will be. And again, this is a — these machines are again manufacturers are similar to our printers. They’re much bigger. There’s a lot more mechanical aspects to them, whereas we use more hydraulics. So maybe — so there’s like a lot more — there’s a lot of stuff going on in there. It’s a pretty sophisticated type of a machine. Our parts are purchased, some are machines, some are they saying a lot of them are custom-made and then a lot of electronics is purchased from standard guys like of fun and Siemens and those types of people, drives and so on. So there is a bunch of stuff, some of it is there. The programming is what makes it work-in the specific way that we require. There’s not like that many custom suppliers that we rely upon. As far as the materials go, that’s still something that we’re working on. That’s also been a bottleneck for us. Our core material is, you know, got an aluminum layer-in it for a perfect barrier. We are trying to work very aggressively to come with a sort of recyclable material and we’ve done pilot projects on that and it’s working well, it seems. And if that is the case, then we need to try to scale it up. So definitely one of the big issues in this business is that suppose for a 10 ml packet, if the cost of the packaging is INR2 and if we can reduce it to INR1, which is our longer-term target, then the market — addressable market can increase quite significantly. And the other thing we need to do is go from a non-recyclable to a recyclable package. So those are the two aims in terms of the materials specifically. And we’re doing other developments in the longer-term also for biodegradable and other types of things for other things. But this is the immediate target in this year.
Saket Kapoor
Thank you, sir. I’ll join the queue, sir. Thank you. Core business question.
Jaideep Barve
Thank you. Thank you. Thank you, Mr Saket.
Operator
We’ll take the next question from Manan Shah. Please go-ahead.
Unidentified Participant
Yeah, hi. Thanks for the opportunity. Sir, my first question was for the track-and-trace and the Curious goods part of the business. I believe one of the problem that we solve through this business is counterfeits and there is a big luxury market which faces this problem. So you spoke on the pharma side for this business, but what are your thoughts on exploring or are we exploring or do we have a solution for this part of the business where there is already a problem for which we have a solution.
Shiva Kabra
So Manan, what we are doing is one of the things I discussed in terms of a differentiated technology platform. What we’re targeting very aggressively is one of the things is the anti-count feeding platform and also the supply-chain management at a different level. So we want to give those additional options to the — to our customers along with, of course, meeting all the compliance requirements from L1 to L5. So that’s not an issue. But in terms of, to be honest, the only market we’ve really explored is the pharmaceutical market. The only other markets that we’re exploring are where control print itself is operating and we’re also telling some of our customers in other businesses like plywood or cable and wire that we do have such a solution of the price points are very different, expected amounts people are willing to pay in farmers will look very different than what it is in other types of businesses and customers. So right now — to be honest with you, like I say like 90% plus of the effort is in the pharmaceutical business. It could be that we can explore other areas. And I think definitely luxury cosmetics or luxury-goods in general could be an area as of right now, because pharmaceutical is regulated, they have to do it and they are looking for solutions. So that sort of — considering the amount of bandwidth we have, we’ve not been focusing on creating new categories right now.
Unidentified Participant
Okay, understood. And my next question was on the business. I believe our capacity over there is approximately 40 units per annum. So if you can highlight how many units have we sold last year and at what sort of sale or do we breakeven and I mean to understand what are the levers to breakeven? Is it primarily the sales that will help us breakeven or there are other levers to the business which can help us breakeven over there?
Shiva Kabra
Yeah. In terms of the capacity of what we do in V-shapes, it really depends on the types of machines we are selling. It could be as few as like 15 all the way up to 40. It depends on whether it’s a standard twin or what we call the prime due or the NEXO machine right now or is it something more customized? So if there is a pharmaceutical machine, then they have — everything has to be purchased individually from the beginning. So the whole process becomes significantly longer. To answer your specific question in terms of the sales, we sold three machines last year, out of which none were installed last year because of some delays in supplies from our side and so on, because we just need to get some things. It literally took us six months-to get things stabilized before we could really start focusing on-sales and the other side. So we sold most of the machines towards the back-end of last year. I can’t tell you what’s happening in this year, of course, and I’ll keep you updated as and when we do more things. So we sold three, I think at about — I mean we have done a calculate. It also depends on what sort of mix of models or machines are sold and then also how many machines are running and the materials with. So I think we have like about — Jaideep, I mean I’m just like I think we did a calculating 60 or 70 machines or maybe less or more, but I think something like that of the twin prime, the smaller machines, we have like 60, 70 of them, I think we should be breakeven on the material business. Obviously, what we said on the machines will be an additional revenue and an additional margin. So it’s — it’s a combination business. We do make more money on the machines than we make on the materials, but then the materials is something that will be used year-by year. So the margins and the volume margin is high on the machine upfront but the material would be like a consistent I mean over the next 8, 10, 12, 15 years you know for this machine life and that would be like more of a consistent order that we could get from that.
Unidentified Participant
So you are saying just to summarize that at — so we breakeven around 60 to 70 units, right?
Shiva Kabra
So I’m saying of the small type of machine. Now what happens is last year we sold two big machines. So one big machine is about, say, like gives you about 2.5 to 3 times usage of the small machine. So what I’m going to say like it really depends on where we are setting again and what the thing is. So when we are — I’m trying to like standardize everything, so I’m talking about the two two-track machine, but we sold like two eight track machines and one or two-track machine. So the eight track machine normally give you at least about 2.5 times to three times amount of business as a small machine and it’s only bought by customers who have products which are running continuously. So in a way that would — the — you could also consider equal to selling six small machines because one machine you sold and the two big machines would be both like accordingly five small machines. So it’s a — it’s a combination as and when we get a better idea of the breakup of the bigger machines and smaller machines, we can keep you poster on that.
Unidentified Participant
And we also provide co-packing services under this segment. So any success on that side or?
Shiva Kabra
Yeah. So we have some customers that we are doing it, including like I think some people see like Bombay shaving, of course, like I’m only saying this name because he himself has put it on his own X and Twitter and typed another handle the disclose a customer. So I think Bombay is supplying it to Taj and some other hotels. So that’s also like a something we’re looking at keenly because that will get more awareness for this. But in general, I’ll be very honest, like we are not very fond of co-packing services. It’s something that we’re just doing because we have to give samples and do certain things for the customer. And that’s why I think somebody asked for something about the work-in progress.
. I remember something. And so the reason or we created some additional space in so that we can have like a license facility to pack foods and cosmetics and so that we can just do this core packaging, but that’s separate from our main coating and marking factory. But yeah, so it’s something we do, but it’s more from the view of that it’s sampling, it’s other things. If you keep coming to me month-after month, I’ll be like, you’ve got to buy your own machine and make your own arrangements. So it’s definitely part of what we have to do to help popularize the product, but it’s not really our main focus because we’re not like a contract manufacturer, so to say. It’s part of the — but we need it — we need to do it to help popularize the product.
Unidentified Participant
Got it. Understood. Thanks. I’ll get back-in the queue.
Operator
Thank you, Manan. We’ll take the next question from Bhargav. Please go-ahead.
Unidentified Participant
Yeah, good afternoon, sir. And congrats on a good performance. Sir, my first question is on our standalone business. So if I look at the printer installed-base as on FY ’20, it was about 12,000 and now we are closing in at 21,000. So we’ve had a consistent 10% to 11% CAGR in terms of the printer base. But if I look at the gross margins in the standalone business, we have seen a sort of some pressure on the gross margins. So we look at raw-material cost as a percentage of revenue. In 2020, it was about 37% and now it is about 42%. So how should we look at gross margins? Are we facing some competitive pressure, which is resulting in this gross margin being under pressure?
Shiva Kabra
So like I said, in general, we don’t change our margins at all.. So what happens is our products selling prices and our margins are about fixed. Now what happened last year, I do think the rupee deprecision against the dollar, two, three of our things that we buy from Taiwan and one to other countries besides the US itself are linked to the dollar, so there might have been some slight cost increases. I think the rupee was a little bit down last year. We’ll take countermeasures this year in terms of some price increases and certain other things. But, so normally what happens is we meet like once a year or twice a year as a managed — set of managers. And when we meet, then only we go-ahead with certain other types of strategic decisions like price increase and stuff. But so we normally maintain our margins throughout and it’s about close to 60%. Now what happens is sometimes there’s a different set of product mixes continuous injured printers have the highest margins you know and also our PSO printers some of the other printers have lower gross margins but then they require less costs in terms of selling and servicing them. So when we duly look at it on a net basis, there’s not that much difference, but on a gross basis, there may be some variations of the same. So it could be that the product mix has changed. I need to look at this very closely what you’re talking about. But in general, for every individual product-line, we don’t reduce our margins. Our gross margins or we don’t increase them either. We keep them as it is. If there is a major change, it will be because of product mix. Sometimes there’s some temporary change. Again, I don’t know, 2020, is that the COVID year also you’re talking about specifically?
Unidentified Participant
Yeah. I mean just three months of COVID, so like —
Shiva Kabra
So I’m not again very sure what happened in that area. So I’ll have to look at over longer trend-line, but in general, about 60% overall gross margin is what the company targets and we are normally somewhat close to that. I mean,, you are here, just give some better idea on this?
Jaideep Barve
Yeah. So for the cost-of-goods-sold, I mean for the last — since 2022, we are remaining consident at 41%, 40%. So this year also, we are — and it’s about 40% for ’24, ’25. It’s similar to the line of last year and the year before last. So that kind of consistency we are maintaining. And again, as rightly put up is that it also depends on the product mix. I mean, the higher the number of consumables if we sell, obviously the profitability is going to be higher. So
Shiva Kabra
And the product mix in terms of the line of printers, different printers have different margins, gross margins for them, although the network works out similar.
Unidentified Participant
Sure. And secondly, do we share what is the revenue run-rate in the track and raise business? Because I see about INR20 crore INR22 crores is the burn which we are doing in the subsidiaries. So if we are not sharing that number, just wanted to know what’s the guidance on this burn rate? Will we see reduction or will it stay around these levels for the next two years?,
Shiva Kabra
The and trace division is part of Control standalone, so you don’t see it in any subsidiary. The subsidiary that you’re talking about, is that ICIPL? Can you just repeat which subsidiary you’re seeing in there?
Jaideep Barve
Talking about the V-shapes thing about the burn rate of INR20 crores you seeing.
Shiva Kabra
Yeah, yeah. So that’s in the packaging business that has nothing to do with the track-and-trace business. The track-and-trace losses were part of control standalone.
Unidentified Participant
So is it possible to highlight what is the loss in the track-and-trace business? Do you share that or don’t share it?
Jaideep Barve
No, we don’t — we don’t give divisional performance. It’s part of our internal MIs, so divisional performance we don’t give.
Unidentified Participant
But revenue run-rate, a monthly run-rate or yearly run-rate, do we have some idea or
Jaideep Barve
Bhagav, at the moment, we are not mandated to give a segment-wise analysis at the moment. So when the time comes, we will definitely give in our financial statements.
Unidentified Participant
Sure, sure. And this burn rate, is there a possibility of reduction or we are at or we will stay at about INR20 crores INR22 crores
Shiva Kabra
I just agree — answer that. I think that as the revenues increase this year, we would expect that we should reduce that operational loss significantly. But we don’t know exactly where we’re going to-end up. It’s just like I think it’s like May end or something. So as we know in the next 10 months, I think we should — like I said, even what we sold last year will definitely help contribute this because it’s just — I mean, out of three machines, one just like literally started a month, month and a half ago and one is under installation, one is going to be installed in another month from now. So yes, so some things that we need to improve here. Obviously, as we sell more machines, I think that will give us some more revenue and that will also give us a more consistent aftermarket business of the materials, which will be a consistent earning. But yeah, I think we are expecting to in general, we can — we’ve got the cost platform that we need largely. Like I said, across all our subsidiaries, including CP Italy. But what we might — we might add one or two people just more on the sales or marketing side, not really — we don’t need anyone anywhere else in — across markprint, Codiology, CP CP8 or elsewhere or even in the track increase, we might just add one or two more sales guys. If you look, we get the right type of fit. So we’ve got some people, we might add that one or two people to help just give us that extra thrust if we feel we get that right type of person. Other than that, we’re not going to see any major cost increases unless there’s some unforeseen issues that happen. So in that case, as we sell more, we should get some more operational leverage and the SG&A will be spread over a bigger revenue base. So the gross margins would really flow-in to the reducing the losses.
Unidentified Participant
Thank you very much and all the best.
Operator
Thank you,. We’ll take the next question from Gaurav. Gaurav. Please go-ahead.
Unidentified Participant
Yeah, hi. Can you hear me? Gaurav, can you be a little louder, please? Sorry, is this better? Yes, it is better. Please go-ahead. Okay. Thanks. Hi, sorry. I just have three relatively basic questions, slightly new to the business. What is — do you all-share or maybe could you give us an indicative sense of gross margin, let’s say, across different verticals, whether it’s consumables or printers? And the reason I’m asking this is going back to question, let’s say, in FY ’18, ’19, gross margins were almost north of 65% with a lower consumables mix. And today that’s a lot lower with a higher consumables mix. So just trying to understand how do we think about gross margins, let’s say, on a three, five-year basis.
Shiva Kabra
So like I said, I think overall we — we were targeting about 60% overall. There was a certain period, which — again, I’m not sure which you referring to, where from Gohati, we were getting certain additional benefits from manufacturing out there, okay. So that boosted our gross margins because we were getting certain tax benefits that we used to accumulate straight to the bottom-line or bad our gross margin up further. We still get — we still get some, but then the amount
Amount reduced quite sharply at 2018, 2019 or something like that. So we got some benefit for a couple of years and then it reduced. So like that could have been a change, you know. Again, I will say that at a certain point of time, which to — our CIG was like 85% of our business, you know, and was — so like at, I’d say like till about five years ago, LCP Valuate and CIG was probably like 90% of our business. So as a result, the margins were higher because we were more for — even though we have like had theoretically six or seven products, we never actually really focused on selling the thermal transfer or the thermal ink jet or even the PAZO for that matter, whereas now they are performing a significant part of our growth. So those issues could be there. Like I said, in every individual product-line, we don’t change the margins there — if there are certain cost increases or certain other types of things that happen, we normally also would increase the prices in proportion. But in general, our overall target would we expect from the mix of products that we are selling should be about 60%. Like I said, different product groups have different margins, you know. But on an overall basis, like I said, certain product groups also have lower operational costs. So on a net basis, we think that everything would be the same.
Unidentified Participant
Got it. And just second question was on the consumables component, like let’s say, ink or any example you want to take-over there. Just trying to understand how pricing has moved. So let’s say on a per cartridge or per liter basis, just given that the business is very sticky, is this — is this a segment where you can take, let’s say, 5% to 7% annual price hikes or just trying to understand how pricing is — how pricing moves in that segment?
Shiva Kabra
So some of our competitors have been a bit more aggressive in terms of increasing prices than us. I think I’ve disclosed that in the past and there’s now I’d say more of a pricing gap between, you know, a little bit of a pricing gap between our three competitors and us. So-far, we’ve not taken a very aggressive stance on that because we are getting a fair volume growth. And like I said, last year, the rupee depreciated, so this year we probably looking at some sort of a price increase. So in general, it’s been more for us genuinely, if we feel the costs have increased, that’s when we’ve gone for a price increase, we’ve not really used as a revenue lever. It’s something that we need to discuss internally of whether we need to do that. And like you’re right, so the product is sort of inelastic or sticky, but it’s not being used so-far by us. So it’s something we need to discuss deeply inside, I think as a strategy if this is a method we want to go down or not. Fair enough. So I mean, there are cost increases normally pass them on with a little bit of a lag. So sometimes you might see the margin dropping 1%, 1.5% and then it comes back because sometimes like in the COVID time, there was a lot of certain cost increases in this thing, I think because we depreciate a little bit unexpectedly compared to what we expected, prices increased a little bit and then we’ll recapture that by some price increases. So it’s more like in-line. It’s not a fundamental degree of increasing our margins and revenue, but it’s more to capture like a justified cost increase on our side.
Unidentified Participant
Got it. So I mean, it’s fair to imply from that, that there is a fair pricing umbrella that you can still work towards in terms of working upwards versus where your direct peers are.
Shiva Kabra
Compared to them, yes, compared to them.
Unidentified Participant
Okay. Got it. And just my last question. Again, partly approaching this with less context. But it seems like there are a few businesses which are in an investment phase like V-shapes and let’s say track-and-trace over the next few years, next one or two years. And then there is a core marketing and coding business, which is quite stable. So you mentioned that you probably give this investment phase one to two years more and then sort of decide as to where we go from there. So let’s say if we were three to four years out from now, right, and you’ve decided to keep some — some business, some businesses invest in others, et-cetera. How should the business look as it — what is the in terms of how do you think the business should look in terms of size and margins once you made those decisions and where, let’s say, a few years out from now? Thanks.
Shiva Kabra
It’s is very difficult to predict. So like I said, in the core track-and-trace business, we’ve — I mean rather calling and marketing business, we’ve got a history of what that business is like and we know that the industry is going to grow at about 9%, 10%, 11%, stick to us 10%. But we believe we’ve got a slightly better product mix. So we should do 10% maybe a bit more and we’ve done that over the last two, three or four years or something like that. So hopefully, we can continue that. And like I think it’s not only that we’ve got more digital printing things. We’ve integrated some of the mark print products, some of their technology in India, certain other types of things that we’ve done. So we are also advancing on that front. We’ve done a lot of innovation in the highways. We have some three key patents in the thermal ink jet and we’ve come out with a new product, which is not going to be successful because the ink development is still not complete, but we would have a leading-edge product if we did have the ink developed in time. But so we are working on — we’re definitely doing our investment in the coding and marketing business on the core side, but these are R&D expenses that we were taking anyways and we’re just continuing them. So we’re still trying to maintain our competitiveness in that business and try to grow a bit faster. As far as the other businesses, like I said, go, I think we are working on a platform of technological superiority or and that’s what we want to establish both in the track-and-trace we also like a premium player compared to the other players that I mentioned. So what we need to do is we need to offer a sufficient delta, you know of at least 30% plus in terms of value to the end-customer for him to consider changing platforms from what he’s using right now to us. And in terms of you know the packaging business, again, like I said, right now, the market awareness of this product is very low. I obviously, it was fundamentally my decision to look at this thing and invest in it. And I think that there is a massive scope in it. But like I said, like we are still in the early stages and we are struggling and we are working to make our things run smoothly. And my focus or what control printer is bringing, of course, we’ve got some differentiated technology, we’ve got some other stuff. And especially in the packaging business, what we feel is we know-how to make a business run smoothly and scale it up consistently, especially if it’s a technology-based business. And that’s sort of the type of management that we want to — and that type of a process-driven skill that we want to bring in into that packaging business. But in the end, these are markets that are slightly different than what we of which I’ve been working in personally or even some of the other people. So it’s very difficult for us to give a view from three, four, five years out, but I think in the coding and marketing business, we are quite confident that things should work smoothly. Like I said, in other things, we’re still building out. And honestly, even if you’re successful in-building out, that just means you have to continue reinvesting and building out because right now we are even in the packaging business, the only places we are targeting is some part of half of Europe and India. So we’ve not even got our marketing act together outside of that whereas actually is a global business. So even in the track-and-trace business, the idea would be, if you can prove it in India, we can again take that solution elsewhere to certain other geographies and see whether we can exploit that. But if we’re not able to do it here where customers know us and they give us a better reception, then it’s going to be difficult for us to do that as well.
Unidentified Participant
Thank you very much.
Operator
Thank you,. Sir, since we are running short of time, we’ll take the last question from the line of Kulkarani. Please go-ahead.
Deven Kulkarni
Yeah. Hi, can you hear me? Yes, please. Okay, okay. Yeah. So can you share the split of like printer revenue, consumable revenue for this quarter?
Jaideep Barve
Yeah. For this quarter, the breakup between printers, consumables, space and service is 14%, 58%, 11%, 16%.
Deven Kulkarni
Okay. Thank you. And how many printers did we sell-in this quarter?
Jaideep Barve
836.
Deven Kulkarni
Okay, got it. And last year this number was 630, right? The number of printers sold-in the Q4 FY ’24, yeah.
Jaideep Barve
It was actually more, it was 868.
Deven Kulkarni
Okay. Okay. Fine.
Operator
Thank you, David. Since that was the last question, I would request the management to give their closing comments, please.
Jaideep Barve
Thank you everybody for joining on the call.
Shiva Kabra
Yeah, absolutely. I think thanks everyone. A lot of great questions, a bit surprising because I think more questions on the track-and-trace and the Curious Codes business and the packaging business than the core coding business. But yeah, I think if there are certain things that people would want us to put up, I think we’ll try to add those additional details, we have a pretty extensive ERP, so we get a lot of data. So if people need some specific question and we feel it’s not compromising our secrecy or our competitiveness, then we are glad to share that. So thanks everyone for joining. I really appreciate your time during the working hours and best wishes.
Jaideep Barve
Thank you, everybody. Yeah, thanks.
Operator
Thank you to the management and thank you to all the participants for joining this conference call. You may all disconnect now. Thank you.