Control Print Limited (CONTROLPR) Q4 FY23 Earnings Concall Transcript

Control Print Limited (NSE:CONTROLPR) Q4 FY23 Earnings Concall dated May. 02, 2023.

Corporate Participants:

Jaideep Barve — Chief Financial Officer

Shiva Kabra — Joint Managing Director

Unidentified Speaker —

Analysts:

Karan Bhatelia — Asian Markets Securities — Analyst

Gunjan Kabra — Niveshaay Investment — Analyst

Darshan Jhaveri — Crown Capital — Analyst

Abhishek Agarwal — Naredi Investment — Analyst

Naysar Parikh — Native Capital — Analyst

Devanshu Sampat — Individual Investor — Analyst

Raj — Arjav Partners — Analyst

Karan Bhatelia — Asian Market Securities — Analyst

Deepan Sankara Narayanan — TrustLine Investment Solutiosn — Analyst

Harsh Beria — Individual Investor — Analyst

Ashok Shah — LFC Securities — Analyst

Rajnish Behl — Individual Investor — Analyst

Pawan Kaul — Compound 26 Capital — Analyst

Saket Kapoor — Kapoor & Company — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Control Print Limited Investor Call for Results Discussion of 4Q FY ’23, hosted by Asian Market Securities Limited.

This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the Company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.

Actual results may differ from such expectations, projections, et cetera, whether expressed or implied. Participants are requested to exercise caution, while referring to such statements and remarks. [Operator Instrutions]

I now hand the conference over to Mr. Karan Bhatelia from Asian Market Securities Limited. Thank you and over to you sir.

Karan Bhatelia — Asian Markets Securities — Analyst

Thanks, Arvind. Ladies and gentlemen, good evening and welcome to the Control Print Limited’s Fourth Quarter and 12 Months FY ’23 earnings conference call. posted by Asian Market Securities Private Limited. From the management side, we have with us Mr. Shiva Kabra, Joint Managing Director and Jaideep Barve, CFO.

Now, I would like to hand over this call to Jaideep sir for his opening remarks. Post that we shall open the floor for Q&A. Thanks. Over to you.

Jaideep Barve — Chief Financial Officer

Yeah, hello, good evening. My name is Jaideep Barve and I worked as a Chief Financial Officer of Control Print Limited. Welcome everybody to the earnings call for the fourth quarter of the financial year 2022-23 of Cootrol Print Limited. We appreciate who have taken out time from your busy schedules to attend this one.

Hope you and your loved ones are safe and healthy and wish you all a happy financial new year. Mr. Shiva Kabra, the Joint Managing Director of Control Print Limited also joined me on this call. The detailed presentation has been put up on our website, as well as the investor presentation before this call. For those who are probably reviewing the company for the first time, Control Print Limited was founded in 1991. It operates in the niche coding and marking segment, which is an oligopolistic market, with four major players, out of which three are MNCs, and we that is Control Print Limited is the only Make-In-India manufacture.

We have a manufacturing facility in Nalagarh, which is in the state of Himachal Pradesh for the manufacturing of printers, and in Guwahati in the state of Assam for the manufacture of certain types of printers and the consumables. Both these manufacturing locations are state-of-the- art facility, where we produce good quality products.

We manufacture and supply a wide range of printers, such as CIJ, TIJ, high resolution printers, thermal transfer overprinter s, laser printers, et cetera. Apart from these printers, we also manufacture and supply consumables like ink, ribbons and cartridges. The industries that we serve are cables, wires, pipes, cement, sugar, dairy, FMCG, [indecipherable]

We have a strong sales and service team of 350 plus personnel across over 10 plus branches across India. Our domestic presence is served through 1,600 cities in India with over 2,500 pin codes in it. As of today, we have an installed base of over 7,500 [indecipherable] which enables the sale of consumables across the wide set of the printers. Post printer sale, we believe there is a continuous demand for consumables, over this time which typically lasts for about five to eight years, depending on the operating conditions.

Moreover, our Company has a robust net worth, to ensure we provide high uptime and a good after sales service which eliminates customer concerns. We also offer end-to-end ERP system which is SAP, which supports our financial, production, [indecipherable] sales and the CRM. This ensures maximum transparency in accounting, sales and after sales, as well as the total controls of the inventory management and the orders received [indecipherable]

Our systems and processes gives [indecipherable] confidence to the teams, vendors, customers, bankers also the investors. We periodically conduct training programs to ensure that all our employees remain proficient in operating and maintaining to our machines. We constantly endeavor with customers or products, to reach out to other industries [indecipherable] install base, with a strong foundation and five pillars, like man, machine, material, technology and finance, we’re well established to augment our business plan, which we feel we have conducive timing for better and bigger heights.

Let me give you a brief analysis of the standalone financial statements of Control Print Limited for the financial year ended ’22-’23. On the overall position, India has marked its position as one of the fastest growing economies globally. This growth trajectory is expected to continue toward 2023 also.

Toward end of 20222 the manufacturers had scaled the production mainly on the rise of rising international, domestic demand for Indian products. This trend also was observed in the fourth quarter of ’23 indicating a sustained improvement in the business environment. Coding and marking systems, we have crucial world in the manufacturing and supply chains for both industrial as well as consumer goods. According to certain industry reports, our industry in India is expected to witnessed a growth with a CAGR of 9.85%.

Food, beverages, healthcare, electronics, chemicals, construction, automobile industries are expected to be the major growth drivers of the coding and marking market in India. On the opportunity side, we feel that there are certain rules and reguations, which require companies in the FMCG food and the pharma sectors to give more information to those consumables about the products on an industry from where it is manufactured. We ourselves have also gone into certain global collaborations during the course of this year. In December 2022 we entered into JV agreement with a Italian company called V Shapes, which is areas in the manufacture and sale of packaging machines is also famous for its eco friendly single use sachets.

In July 2022, we acquired a company in Netherlands, called Markprint B.V. This company is [indecipherable] of high-speed printing that produce origionally and and it’s well established at the local market. This is effecting the area of [indecipherable] for packaging and industrial applications. We believe that partnering and having a synergy with Markprint we will be able to offer better solutions and diversified portfolio.

On the revenue front, the operating revenues for this quarter was around INR85 crores. The overall operating revenue for FY 2023 is INR291 crores which is an increase of 15% from the previous year’s operating revenue of INR254 crores, while our main products happen to be CIJ printers, it is hardly to go back the non-CIJ printers, also showed [indecipherable] printers in this year.

We continue to expand our footprints in dairies, cement, [indecipherable] industries. We have also launched new prodcuts during the cours of this year. On the expenses front, we can note that consumption which is also good sold, it has remained steady, approximately over 40%. It’s more or less in line, as compared to previous financial year.

However, we can definitely hold for improvement in reducing this in the coming financial year with optimized buying strategies. Manufacturing as well as operating costs are at a consistent rate of around 3% of sales, this is in line the prior years. Our employee costs are around INR50 crores, which we see a decline of 2.5% as compared to previous financial year, which is largely as result of the increased space at this current year. Drepreciation is steadily at 5% to 6%, and our other expenses are in the range of 13% to 44% as in the last two years.

The Q4 EBITDA, PBT, PAT and EPS exceptional items grew by 10.9%, 13%, 18.2% year-on-year respectively. While these are [indecipherable] we always feel that there is still a good considerable scope of improvement. We aim for better revenues, higher revenues, and also enjoy the higher terminal sales. The way forward for us is high consumable sales with improved industry production, new launch products during the year, focus marketing plans. We have a [indecipherable] sales team which will be given targets.

We’ll focus on the key accounts, also try to put more focus on the installed base and increase our larger market share. And also look at the European companies’ applications we’ve done so as to achieve better pace and synergy in this year. The floor is now open for questions. Thank you so much.

Questions and Answers:

Operator

Thank you. [Operator Instructions] The first question is from the line of Gunjan Kabra from Niveshaay. Please go ahead.

Gunjan Kabra — Niveshaay Investment — Analyst

Hi, thank you for the opportunity. Sir, I have — I’m actually competitively new to the company, so wanted to understand the business model, like what is the active printer base that we have today and what’s the number that we expected to reach in next two years?

Jaideep Barve — Chief Financial Officer

I didn’t get the first seconds, ma’am.

Gunjan Kabra — Niveshaay Investment — Analyst

Sir, I’m saying I’m competitively new to the company and wanted to understand what is the active printer base that we have today and what’s the number that we expected to reach in next two years?

Jaideep Barve — Chief Financial Officer

See we’ve got the import, there is another 70,000 printer base at the moment, And if you look at where we [indecipherable] growth every year to get your numbers.

Gunjan Kabra — Niveshaay Investment — Analyst

Okay. Sir, how do you estimate the requirements of the consumable to the printer? Like if I wanted to understand that if you’re selling one printer today, then what’s the consumable that we can estimate in terms of our ink requirements on printer that is coming? And if we are selling a printer, is it certain that say for next five years to six years the consumables for the ink requirement for that printer is being — will be catered by us and that sale is like, going to be there? So how can we estimate that ink requirement?

Jaideep Barve — Chief Financial Officer

Okay, So the way we see it as, if we sell a printer to a customer and it operates in normal operating conditions, because it is same as the production package is. And without any abnormal wastages seems that like it’s going to enjoy use the printer for the next five to eight years. So we can can rest assure that the consumer gives business or we can get some one particular center which is for the next five to eight years.

Gunjan Kabra — Niveshaay Investment — Analyst

See five to eight years is fine, I mean the printer’s life is — would be around five to eight years, but the —

Jaideep Barve — Chief Financial Officer

Once he purchases our printer, so he has to definitely buy the consumer goods from us.

Gunjan Kabra — Niveshaay Investment — Analyst

Sir, that is correct, but if I’m talking about say if we order a printer somebody, but how much ink, like how much worth of ink will be sold for one year on one printer is what I’m trying to understand that metric I wanted to understand.

Jaideep Barve — Chief Financial Officer

Well, let me tell you is that like, we are in the oligopoly and so we have the machine run rate or conditions for the ink, at this moment it’s a little bit confidential data because it’s the operating oligopoly.

Gunjan Kabra — Niveshaay Investment — Analyst

Okay. That’s it’s, no, not an issue. And sir how much, like if you can bifurcate our revenue from how many, like different sectors, what is the contribution like major sector is contributing how much revenue? And if sector wise also, the usage of or the consumption of ink changes with different sectors if you can tell me, explain me that.

Jaideep Barve — Chief Financial Officer

On the overall basis, our line of business is consumable-centric. And then what we can do is that we can choose let’s about 55% to 60% of the business comes from the sale of consumable, and see about 15% to 30% comes from the sale of printers.

We also have something called as service income, which is the annual maintenance contract or comprehensive maintenance contracts what we do. So about 10% to 15% comes from that business. And from the sale of spare what we do, that is about 8% to 10%. So that’s a brief distribution of that entire business, what we do.

Gunjan Kabra — Niveshaay Investment — Analyst

Sir, I’m talking about sectors, I mean how much is FMCG, how much is pharma, how much is plywood and [indecipherable] which these sectors contributing? I’m talking in terms of that.

Jaideep Barve — Chief Financial Officer

We do not I mean if you look at this, there’s no major concentration or business sector wise, but we believe that pipes, food, dairy, these are the top three segments for us and that contributes about 30% of the business for us. The others having at least almost about 6% to 7% each.

Gunjan Kabra — Niveshaay Investment — Analyst

Okay, okay. Sir, what would be the total capacity of consumables?

Jaideep Barve — Chief Financial Officer

Capacity as in?

Gunjan Kabra — Niveshaay Investment — Analyst

In tonnes or in — in tonnes if you think.

Jaideep Barve — Chief Financial Officer

60% usage of the capacity.

Gunjan Kabra — Niveshaay Investment — Analyst

Sorry,

Jaideep Barve — Chief Financial Officer

60%.

Gunjan Kabra — Niveshaay Investment — Analyst

So that’s the utilization, right?

Jaideep Barve — Chief Financial Officer

That’s utilization.

Gunjan Kabra — Niveshaay Investment — Analyst

You cannot tell me the total capacity of how much capacity.

Jaideep Barve — Chief Financial Officer

[indecipherable] share with you.

Gunjan Kabra — Niveshaay Investment — Analyst

You cannot share that. Okay. Okay, Sir, so any metrics on which you can guide us that, okay, this is the number of printers, so like last year, if we sold around 3,000 printers so this year if you’re selling then, how can we estimate that then how can we estimate that okay, this is going to be the total consumable sales, it’s not like if you want to tell, but anything like metrics that we can judge on or not anything from that sort if you can say.

Jaideep Barve — Chief Financial Officer

If we have a year-on-year let’s say about 10% growth in the number of printerse what we sell.

Gunjan Kabra — Niveshaay Investment — Analyst

Correct.

Jaideep Barve — Chief Financial Officer

Same area, that we can do.

Gunjan Kabra — Niveshaay Investment — Analyst

That you can do?

Jaideep Barve — Chief Financial Officer

Yes, yes, we can do that.

Gunjan Kabra — Niveshaay Investment — Analyst

Okay, Thank you so much and good luck for your future endeavors.

Jaideep Barve — Chief Financial Officer

Thank you so much.

Operator

Thank you. The next question is from the line of Darshan Jhaveri from Crown Capital. Please go ahead.

Darshan Jhaveri — Crown Capital — Analyst

Hello, hi, sir. Congratulations on a great set of numbers. Hope I am audible.

Operator

Yes, you are audible. You can go ahead.

Darshan Jhaveri — Crown Capital — Analyst

Yeah. So, sir. I would just like to know that we’ve been growing at a pretty good rate currently. So what would be our revenue target for the like upcoming year, maybe next two years. And are our margins stable at 25%?

Shiva Kabra — Joint Managing Director

So I will answer that question, if that’s fine. But we don’t give any projections or targets out. So I can’t tell you anything obviously we hope that continue having sustainable growth. I think as far as our margin goes, like Europe also obviously in the kind of — of course there might have been I don’t know what happened in the COVID times or something sort of that, but it’s been sort of consistent over an extended period of time. So we’re pretty sure we can maintain that. In fact, on a bigger base it’s much easier to maintain the markets. But as far as the revenue it’s not possible for us to project just right now.

Darshan Jhaveri — Crown Capital — Analyst

Okay, sir. Shiva sir, okay. So I would also like to know if our JV and the new acquisitions, so how have they been contributing to the business. Are they more margin accretive or how is the demand in Europe? So could you give some color on our acquisitions?

Shiva Kabra — Joint Managing Director

Yeah, so as far as the acquisition goes, I think Jaideep has got the numbers. It’ll give you a better I idea, but it’s been consistent since last year and they were about EUR2 million odd in turnover target, if i’m correct approximately, and some good profit contribution. So that was Markprint. So we are still working on integrating some more of the products which we have experienced it delayed and actually just if I need to see the first set or so of printers and now we’re going to test them on certain applications here. So yeah, it, — so far it’s not been bad, but it’s not been like, the integration has frankly been a bit slower than expected on both sides they’ve been busy with — [indecipherable] were busy with some other things.

And as far as the joint venture goes, it’s a bit early, just actually we’ve activated everything now, and yeah it’s not actually contributed to the bottom line or the top line at all, but it’s looking active now. And now it should actually give us some, maybe some numbers in the coming quarter, maybe not in this quarter, but we should start seeing some business being done in the coming quarter.

Darshan Jhaveri — Crown Capital — Analyst

Okay. So the that they might contribute from —

Shiva Kabra — Joint Managing Director

Like, all of these types of things that we do it’s — I understand the excitement that everyone has, like normally we go pretty normal term planning horizon in a lot of these type of strategic activities. So, it could [indecipherable] we’ve been looking at a 3 to 10 year type of a thing so obviously that is from a different,

Darshan Jhaveri — Crown Capital — Analyst

Okay. That helps sir. Okay. Thank you so much, sir. And all the best for the upcoming quarter. So thank you.

Operator

Thank you. The next question is from the line of Abhishek Agarwal from Naredi Investment. Please go ahead.

Abhishek Agarwal — Naredi Investment — Analyst

Good afternoon, sir. Sir, my first question, something will run by maintaining a cash balance of INR50 crore, for which you have also made investment this is a good thing, but why have you invested in direct equity? Why you don’t — why you did not go through a mutual fund? And also you are not an investment company and it is not our job, so what is [indecipherable] please tell us.

Hello? Hello?

Shiva Kabra — Joint Managing Director

Jaideep, do you want me to answer that or you’re getting that?

Jaideep Barve — Chief Financial Officer

Yes, sir, I got your question. We know we are not a financing company, but the reason why we are keeping them in the investment [indecipherable] is that, we are always in the look out for new acquisitions, and we would like to keep our funds ready, whenever the acquisition happens to be a good one for us to invest and the legal [indecipherable] operational, financial [indecipherable] properly, the target [indecipherable] so we get your funds through investing over [indecipherable] so that’s the reason why [indecipherable]

Abhishek Agarwal — Naredi Investment — Analyst

I agree, but why you have direct investment in equity?

Shiva Kabra — Joint Managing Director

Yes, this is SHiva Kabra, we’ll just say that so what — we’ve gone through this before I think, it will be someone it’s our concalls in the past let me just go through which I don’t want to stop that. But I think we’ve announced clearly that normally we’re keeping this current cash sort of liquid balance of odd INR50 crore, and, beyond that we would be redistributing the money unless there’s some immediate acquisition or investment in line. So I think we’ve been clear with our policy, our distribution policy, I mean, of course, and there can be an endless amount of questions as we discussed in the past, whether it should be in a liquid fund or it should be an FD, whether you should keep it in a mutual fund or this thing.

We felt we looked at it very closely as discussed, Mr. Kabra had also given this, the Board discussed this in the AGM, one of them, and they said there is in renowned past history, we’ve on average done reasonably well. We were expecting that this money is going to be consistently available because we are generating cash. So even if we use it for something, we’ll rebuild that cash balance so there’s no like direct pressure on requiring this money for some immediate thing. And considering that we’ve gotten a reasonably better returns to consider the dividends and investment, and also I will point out that the dividends we get through, we can redistribute tax free I believe it’s whatever the variable extinity. But — so we’ve done a calculation on that we felt we were getting a reasonable risk, whether I think compared to this. But like I said, it’s not like our main business. We’ve made that very clear. Once we get to a certain level, we will redistribute the remaining money either in whatever form the Board decides it for, whatever form the Board decides.

Abhishek Agarwal — Naredi Investment — Analyst

So in future you also invest in direct equity continue?

Shiva Kabra — Joint Managing Director

No, I think that we discussed that at Board level. Like I said, in the past we’ve had a certain — when we valued in the past we had a better return on that. And in the future, there’s no reason where we will take a specific take on it. We’ll see what we feel as best. I think the Board has given a clear direction which we’ve communicated, which is that we will be — if there’s excess cash and there’s no specific acquisition or investment that we are looking at, we will return that, I think that’s what I can say from that — to me covers almost all those questions.

Abhishek Agarwal — Naredi Investment — Analyst

Okay. Thank you so much, sir. And there’s a second and last question. What is capex plan for FY ’24?

Shiva Kabra — Joint Managing Director

It’s margin I think the depreciation normally covers the capex, so something like that. Did you you get my answer? I said that normally there’s not really much capex at all our business, so the depreciation normally covers the capital investment if any. So it’s — the products should be about the same as what I’d say. Jaideep, anything you want to add out there,

Jaideep Barve — Chief Financial Officer

No, there is nothing [indecipherable] Shiva. No, nothing major is planned as of now but then [indecipherable] depreciation will cover it.

Abhishek Agarwal — Naredi Investment — Analyst

Okay. Thank you so much.

Operator

Thank you. The next question is from the line of Naysar Parikh from Native Capital. Please go ahead.

Naysar Parikh — Native Capital — Analyst

Yeah, hi, Shiva and Jaideep. Congratulations and thank you for taking question. So, my question — couple of questions first is, can you just talk about what were the printer sales in Q4 and the full year?

Shiva Kabra — Joint Managing Director

Jaideep?

Jaideep Barve — Chief Financial Officer

Yeah, you’re talking about just a Q4 or [indecipherable]

Naysar Parikh — Native Capital — Analyst

Yes, Q4 and full year, both, tell me number of printers sold in Q4 and full year?

Jaideep Barve — Chief Financial Officer

Like the Q4 we were sold about approximately 950 printers. And [indecipherable] 2,200 to 2,300 printeres in the year.

Naysar Parikh — Native Capital — Analyst

Okay. And i mean i know you don’t give future guidance, but just as you’re looking for this year in FY ’24 but how are you seeing the traction on this especially, in context of the competition because what we understand is, competition also going very aggressively, both in terms of the new technologies they’re bringing in, people they’re hiring, et cetera. So, what is the sense of competition and how do you see the printer sales say from FY ’24 just directionally, if you can talk about that?

Shiva Kabra — Joint Managing Director

Yeah, so I can’t comment, but I mean, the competitive intensity is the same as what it was in the past. Like we have maintained, before also that essentially the bigger customers in India are the ones who want to take the least amount of risk will go for either us of course Videojet and Domino, Markem-Imaje. And we are competing pretty well with all three of them. And as far as — so we don’t see any like major change in any the competitive intensity. But of course, yeah, the first month has been fair, I can only talk about April so far. So we obviously see how the rest pans out, but it’s looking positive so far, like the cases, and I mean, it’s looking in line with last year so far.

Naysar Parikh — Native Capital — Analyst

Okay, got it. And even with mix of printers between CIJ, TIJ Laser, can you just [indecipherable]

Jaideep Barve — Chief Financial Officer

Naysar, don’t ask us about the breakup this is true capacity of information time. We have those numbers ready, but the breakup of the CIJ and non-CIJ will be confidential as of now.

Naysar Parikh — Native Capital — Analyst

Okay. And in terms of you did talk about your packaging JV, I just want to understand what is the modest offer do you have there? Like, would you be — is it a JV company sell together or do you have like distribution rights in new sell or how does that work?

Shiva Kabra — Joint Managing Director

So essentially what we — they have is we make some packaging machines, which have some unique features to it. And the packaging materials also proprietary to the machine, [indecipherable] tetra pack type of a thing, the tetra pack sell the machine and they also sell the tetra pack tricks on top of this machine. So that’s something similar. And what we are doing is we will be manufacturing some part of the range of machines here not entire thing, but some part of the range. And we also will be — I’ve already started working on manufacturing the proprietory packaging material, the flexible packaging material out here.

So we made one type, there’s another type which is fully recyclable, and that’s stillfew months, this takes time, make sure everything works perfectly. And that’s — second thing we have to get done in place. And, the third one which is compostable one, which is still like quite far we have started working on that. So basically we’ll make the materials out here or rather we get it sourced for ourselves from some specific manufacturers. And we Will sell it directly to the customers in India, and our areas of operation. And we will also be making the machines ourselves in our factory in Nalagarh. So that’s the scope of the JV. And this is covering India in a few neighboring countries,

Naysar Parikh — Native Capital — Analyst

And the economics is how — is it — do you have to pay certain royalty or is there a profit share or any —

Shiva Kabra — Joint Managing Director

No, no, I mean, they have the equity in this company, right? So that’s —

Naysar Parikh — Native Capital — Analyst

Okay.

Shiva Kabra — Joint Managing Director

[indecipherable] see whatever, I don’t know what they — obviously we’ve made some profits and we might have to reinvest it and all, but eventually, I’m assuming if there’s an upsell plus they’ll get I know that equity will be valuable and they can get dividends of it. So — yes.

Naysar Parikh — Native Capital — Analyst

Right. And it’s a 50-50 JV, right?

Shiva Kabra — Joint Managing Director

It’s a 70-30, it’s, right now it’s 90-10, because we’re still meeting RBI permissions and some compliances. So right now we own the Company, we still have to get some clearances before we can issue the equity to them, for 10% and they will take it up to 30%. This is the rate. So they have to pay in then to take it up from 10 to 30. So that’s the — it’s a 70 30, eventually it’ll be 70-30, right now it’s a 100% with us because we still have to get some clearances.

Naysar Parikh — Native Capital — Analyst

And how big is this like Company in terms of the — are they like just — is this new technology just getting started or is that like — is it a big thing in their own market or something like that?

Shiva Kabra — Joint Managing Director

It’s pretty nascent.

Naysar Parikh — Native Capital — Analyst

Okay, got it. And, on a track and trace, right, I think you were talking about that also. So, are we able to get any of the products like finalized on that and when can we see sales of that actually picking up?

Shiva Kabra — Joint Managing Director

We’ve had some sales recently, so it is picking up, and of course because of the pharmaceutical industry requirements, the demands are increasing out there. So yeah, we are getting some benefits of that. Yeah, but it’s in process it’s a ready product, it’s a ready solution from our side so anyone calls up we have a solution ready.

Naysar Parikh — Native Capital — Analyst

Okay. And,lastly then maybe I’ll come back to the queue — in the line again. In FY ’25, your target was 400 now with where you stand today and with all the JVs and everything that you have, how do you look at it? Is that something that you’d still achieve, you’ll go above, beyond any sense?

Shiva Kabra — Joint Managing Director

I mean, we can’t say anything. The Board had set us a $400 crores target, so it’s not relevant with the other ventures that are there.

Naysar Parikh — Native Capital — Analyst

Okay.

Shiva Kabra — Joint Managing Director

So, obviously, we have that target was set to us. But I mean, I do want to say that it was a Board that was down in the AGM to the shareholders and obviously then it’s become [indecipherable] thing. So yeah but obviously that means there is expectation from the Board and w’re working towards that.

Naysar Parikh — Native Capital — Analyst

Understood, no, that makes sense.

Shiva Kabra — Joint Managing Director

Standalone number so it’s not anything to do with obviously it’s easy to buy a company of INR50 crores and to that target, but that’s, what it was a standalone in total number. Our target — I think this will be 292 or something, 291, and so that’s the number we have to pick to 400 actually.

Naysar Parikh — Native Capital — Analyst

Okay. Got it. Okay. Thanks. Thanks, Shiva you. I’ll just come back if there’s something. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Devanshu Sampat [Phonetic], an Individual Investor. Please go ahead.

Devanshu Sampat — Individual Investor — Analyst

Yes sir, thanks for the opportunity. Just so Jaidee sir your voice is slightly muffled, so please request you to I mean adjust your voice accordingly. So Mr. Shiva this is a question for you, right? So, can you tell me what’s your cash and cash equivalent right now as of March end?

Unidentified Speaker —

I can, I couldn’t hear you again. Please repeat that.

Devanshu Sampat — Individual Investor — Analyst

I’m saying that cash and cash equivalent currently?

Shiva Kabra — Joint Managing Director

Yeah. Jaideep you have those numbers, but I think it’s there on the balance sheet right there. I think we had about INR70 crores between cash, liquid investments, whatever, financial investments of different sorts,

Devanshu Sampat — Individual Investor — Analyst

Okay. So around INR70 crores.

Shiva Kabra — Joint Managing Director

But the exact number was published so if someone looks at the, it’ll be there as cash, bank balances and investments and all three of them are liquid. So —

Jaideep Barve — Chief Financial Officer

It’s about INR15.5 crores.

Devanshu Sampat — Individual Investor — Analyst

How much, sir? INR15.5 crores.

Shiva Kabra — Joint Managing Director

So I think [Speech Overlap]

Devanshu Sampat — Individual Investor — Analyst

Total investments in excess cash almost basically was around INR65 crores, INR70 crore, if I’m not mistaken, right?

Jaideep Barve — Chief Financial Officer

Yeah. Which includes the either sales, yes. So i’m just talking —

Devanshu Sampat — Individual Investor — Analyst

Okay. So one question I have, there was a call — there was a comment that Mr. Shva had made, right? So, I believe we should have returned everything in excess of INR50 crores, that we should have maintained. And we’ve only paid out about INR15 crores in dividend, which is, if I look at a payout ratio which is lowest since 2016. So I’m a little confused because, the payout should ideally move up, right? Because we have more money, than what we had sought to keep this in this cash-and-cash equivalents, and so is there any change from what Mr. Kabra mentioned earlier, that we’ll be returning all the money, about this number. You mentioned that we’ll be needing some funds for some acquisitions. But shouldn’t that INR50 crore amount be taken care of that? [Speech Overlap] whatever numebr is above INR50 crore is what will be for acquisition. I am a little confused sir, can you help clarify this?

Shiva Kabra — Joint Managing Director

So I will clarify that again. What I did say was that the Board will take money in the most tax-efficient manner possible. I do want to say that there is a expectation of a dividend that if you give x then it’s there every year. So, maybe there is views that maybe other methods might be more tax efficient or more suitable to that earned cash cut.

Devanshu Sampat — Individual Investor — Analyst

Okay. So that’s something that we can still expect some announcement from the company soon [indecipherable]

Shiva Kabra — Joint Managing Director

Yeah. So if the same continues and for the [indecipherable] there in the Q1, you could see. I mean, yeah, we are generating about anywhere around, INR45 crore to INR55 crores of free cash this will obviously with regarding to the cash balance we have right now. So —

Devanshu Sampat — Individual Investor — Analyst

Sure. Okay. I got your message. Thank you very much. And wishing you all the very best. Thank you.

Operator

Thank you. The next question is from the line of Raj from Arjav Partners. Please go ahead.

Raj — Arjav Partners — Analyst

Hello? Am I audible?

Operator

Yes. You’re audible.

Raj — Arjav Partners — Analyst

So sir, my question is, as you said, the — hello am I audible?

Operator

Yes, sir. You’re audible. You can go ahead.

Raj — Arjav Partners — Analyst

Yeah. So, what you said is the average life of printer is five years to eight years, right? So how much is the amount of total ink?

Shiva Kabra — Joint Managing Director

Let me, i think that’s slightly incorrect, strongly between between eight to 12 years.

Raj — Arjav Partners — Analyst

Eight to 12 years?

Shiva Kabra — Joint Managing Director

It can be five years, definitely it remains steel and some other industries, printer life is about five to six years only. But on average, I’d say like in a food or dairy or a pipe company it’d be between eight to 12 years.

Raj — Arjav Partners — Analyst

Eight to 12 years. Okay. Sir, in those eight to 12 years’ timeframe — [Speech Overlap] Understood. So in those eight to 12 years time so how much is the amount of ink, which you can sell it to your client on a roughly basis? But you’ll understand that different clients have a different rate of [Speech Overlap] No, no I understand, but still, just on an average, just a very rough figure would be good.

Shiva Kabra — Joint Managing Director

Yeah, Jaideep has got that number. I think it’s there in the presentation of — Jaideep?

Jaideep Barve — Chief Financial Officer

We have the numbers, but Shiva just because we are the only company who don’t share these numbers.

Raj — Arjav Partners — Analyst

You don’t share numbers, it’s fine. All right. Other question was what is the average amount of — hello? Am I audible?

Operator

Sir, you’re audible.

Raj — Arjav Partners — Analyst

Yeah. So, what is the average ticket size of a printer?

Jaideep Barve — Chief Financial Officer

Average?

Raj — Arjav Partners — Analyst

Like, average order size of one single printer?

Shiva Kabra — Joint Managing Director

Also it goes from about a lakh to about 4.5 lakh on average, like the standalone range in those.

Raj — Arjav Partners — Analyst

1 lkah to 4 lakh, right?

Shiva Kabra — Joint Managing Director

Yeah. 1 lakh to 4.5 lakh.

Raj — Arjav Partners — Analyst

Understood. And in this AMCs, which you have, so can we expect to hire EBITDA on AMCs?

Shiva Kabra — Joint Managing Director

So our businesses you can clearly break it up into three parts, or rather two parts, like the sales of the printers, and what we call the install base business, which is broken up into further two parts. One is consumers part and one is the service spares and filters part. I think approximately what is it — I think 21% of our business is something 20%, 21% or something like that,

Raj — Arjav Partners — Analyst

20%, yes.

Shiva Kabra — Joint Managing Director

That Is aftermarket business and definitely, I mean, there’s no secret that we’ve made to the, almost all our margin is earned on the aftermarket business.

Raj — Arjav Partners — Analyst

Sorry, I didn’t get you.

Shiva Kabra — Joint Managing Director

I said, there’s no secret we have made, even that almost the entire gross margin is earned on the aftermarket business and not —

Raj — Arjav Partners — Analyst

After market Is the highest one. All right.

Shiva Kabra — Joint Managing Director

So [Speech Overlap] the spares, services filters and the consumers are fluids [indecipherable]

Raj — Arjav Partners — Analyst

All right. One more thing if I could squeeze in, that in this JV opportunity, which you spoke about. So how big can that opportunity actually grow? And how much — likehow are investors supposed to look at that opportunity?

Shiva Kabra — Joint Managing Director

I mean, right now, it’s just an opportunity. So till we don’t make anything concrete out of it, it’s not possible to comment, I think.

Raj — Arjav Partners — Analyst

So can we expect in future calls you will be able to give, uh, some clarity on this?

Shiva Kabra — Joint Managing Director

Maybe, towards the back end of this financial year, could be much better.

Raj — Arjav Partners — Analyst

I can understand,. All right. And also can we expect FY ’24 growth rates to be similar to the historical rates, right? Because since you are not going to do any more expansions and all those things.

Shiva Kabra — Joint Managing Director

So it’s not possible to for us to know, like, I mean I think this question was asked so I mean we —

Raj — Arjav Partners — Analyst

No, no but you can always give a tentative answer to question,

Shiva Kabra — Joint Managing Director

Yeah, April has been good in the number of cases is active is not bad. It’s in line with what’s happened so far last year. But [Speech Overlap] what would’ve happened in the [Speech Overlap]

Raj — Arjav Partners — Analyst

All right, sir. Thanks all the best. See you in the upcoming call hopefully. Yeah bye.

Operator

Thank you. The next question is from the line of Karan Bhatelia from Asian Market Securities Limited. Please go ahead.

Karan Bhatelia — Asian Market Securities — Analyst

Thanks for your opportunity. Shiva, I think last year, most part of the year we had supply chain challenges. So how do you see the situation shaping as of now?

Shiva Kabra — Joint Managing Director

No, it’s definitely improved, what’s a positive. Still some delaying issues for sure. But, I’ll say like, yeah, it’s down like 80% the issues that have been resolved, So, there are some things we are having, but it’s been resolved to a great extent. So that definitely helped us in the last few months I think,

Karan Bhatelia — Asian Market Securities — Analyst

As I expected. And on the cost escalation, are we able to pass on whatever cost increase we had keep for last year till now or we’re still negotiating with our customers for that?

Shiva Kabra — Joint Managing Director

No, we have started on the price increases. I think I mean the majority would be true, but it might not be completely done.

Karan Bhatelia — Asian Market Securities — Analyst

Right.

Shiva Kabra — Joint Managing Director

So it’s still in process, but I’d say that the majority of costs, price increases have taken place in the last few months.

Karan Bhatelia — Asian Market Securities — Analyst

Right. And Jaideep sir, if you can help me out with the breakup of INR291 crores in printers, spares, consumable, mask and others?

Jaideep Barve — Chief Financial Officer

So, if you can say, if you want in pure percentage shares, I can only say that about 18% to 20% is in printers, about 57%, 58% is in consumables, spares contribute about 8% and the service income below 15%. We also have a small portion of the mask business is only 2%. So that’s the entire two cycle on break ups here.

Karan Bhatelia — Asian Market Securities — Analyst

Right. Thanks. That’s it from my end. I’ll join back in with queue.

Operator

Thank you. The next question is from the line of Deepan Sankara Narayanan from TrustLine Investment Solutions. Please go ahead.

Deepan Sankara Narayanan — TrustLine Investment Solutiosn — Analyst

Hello. Good evening everyone. Thanks a lot for the opportunity. So firstly, in the opening remarks, you mentioned that there is some increased regulation for, FMCG and pharma sector to put more information on content, production, batch space, et cetera. So, any deadlines mentioned for sectors when this could get implemented, which could be a driver, key driver for our growth?

Shiva Kabra — Joint Managing Director

So if I cover that question, you might have seen that recently, you have to print like the price per gram or the price per hundred ml or in something like that. So that’s been a sudden thing, which then increased the amount of information to be printed. So in some cases where people were changing the pack size, they have to know the printer’s information.

The second situation was regarding the pharmaceutical industry where, there were some regulations where they had to, print they had to trace their — thier product through the supply chain, through QR codes full track and trace system where we have supplied a bit, but that has been delayed by the government, the regulation has not been withdrawn. so the journey for this year, I believe in August it has already been postponed. I don’t know exact details of when it’s been postponed to. But the pharmaceutical industry is very strong probably but it has been postponed. But it’s not been withdrawn.

Deepan Sankara Narayanan — TrustLine Investment Solutiosn — Analyst

Okay. So second — so Q4 though there has been good improvement in gross margin, but EBITDA got impacted because of our sharp jump in other expenses. So what is the reason for that sharp jump, any extraordinary thing was there?

Jaideep Barve — Chief Financial Officer

So if you look at the other expenses, as a percentage of the sales, we don’t have much of an increase, but yeah, we can look up to view that particular segment as a we have still improvement in the coming years. So this run rate will be continue. But we can always look out for cost optimization, which will definitely have like focus on the next year. So we have a better margins in the next year in that.

Deepan Sankara Narayanan — TrustLine Investment Solutiosn — Analyst

Okay, thanks a lot and all the best.

Jaideep Barve — Chief Financial Officer

Yes, Thank you.

Operator

Thank you. The next question is from the line of Harsh Beria [Phonetic], an Individual Investor. Please go ahead.

Harsh Beria — Individual Investor — Analyst

Hi, congrats for the good set of results this year. In your presentation, I think on a slide it was mentioned that the new products, that new products are being introduced for industrial and non-industrial verticals. Can you talk a bit about these new products?

Shiva Kabra — Joint Managing Director

Yes, so these are some more specialized, applications that where we find something like 15 products or rather employed some technologies for like some more specific types of applications. So [indecipherable] in marking more for certain thigns in the wood sector, or a private sector. So this is when people want to do something beyond the standard. So what we did is, we did in coding and marking if you really look at it’s like batch numbers, date codes, expiry dates and might be other stuff. But then a lot of customers also relied on some branding, and of course with thier track increase for printing QR codes and tracking thier barcodes and tracking their materials with supply chain.

So on on the branding front of course with a lot of customers, we are looking at, at a different options which is to print or maybe multi color or and even higher resolutions and the one better quality of codes, and so on. So we’ve got some different products that we have been working on developing. And also like it’s a very nascent stage of the sales part. But of course, it’s something that because obviously what happens if somebody is spending, I am getting an idea, so if I’m assuming 100 rupees printing. So what I can do I can rely on volume growth or I can try to go back to the customer and offer him something better and maybe he is going to pay INR200 for that also. So we work on both fronts, so basically the idea was to see if we can upsell also to some of the distinct customers, so maybe they are willing to I don’t know pay for more appropriate. Okay. So this is ain line with what w’e been doing, like buidling a software team to maybe track the supply chain and giving customized services, to end customers. So this is kind of in line with that. So that is part of our track increase thing and that we’re developing, and we’ve actually had some more successes on that front, in the recent past, like I said, also maybe more through the pharmaceutical industry requirements. So that of course has some different aspects of the software, aspect that we are working on and of course we combine the software and the hardware and also all the other things so it’s like a single point of contact for the customer. But this is — I’m talking more on the printing side only like with the printers, but giving some more options to the customer. So whether if we — the product stands out more in terms of the branding that we do.

Harsh Beria — Individual Investor — Analyst

Got it. Can you talk a little bit about your Sri Lankan operations, how it’s doing right now?

Jaideep Barve — Chief Financial Officer

Yeah, Shiva, I’ll answer this question. With the the Sri Lankan operations we have regrouped our team over there. And the sales are like got on a very high growth, but some sales are happening. And week on week we are expecting sales — new sales both in consumables and in spare parts. And the intent to like, review the situation again and try to employ new people, both the sales and service, and try to revise operations in a much more focused manner.

Harsh Beria — Individual Investor — Analyst

And my last question is on our inventory. It’s commendable how well we have done, on optimizing inventory in the past few years. What is the optimized inventory base, for our business?

Jaideep Barve — Chief Financial Officer

See inventory will obviously depend upon on some final depreciation. If you look at the sales anyway a lot of purchases happened in the last 15 days of March in this year. So [indecipherable] find a substantial increase in the inventory as compared previous year. otherwise, it’s still a line that whatever the cost of goods sold you’re having what the [indecipherable]

Harsh Beria — Individual Investor — Analyst

So for region our target of INR200 crores in standalone sales, can you do this with INR70 crores to INR80 crores of inventory?

Jaideep Barve — Chief Financial Officer

Well, we are, like, what we do is that because of so many tensions like the Taiwan-China tension or the Ukraine-Rissia tension, so the stuck — global supply of key components like, boards, and wafer or the chips, that was quite constrained. So from a risk mitigation point of view, we tried to build up the stocks so that you, like, we don’t fall shortage of anything and we keep on delivering our printers to our customers based on the orders.

Harsh Beria — Individual Investor — Analyst

Perfect. Thanks for the clarification. That’s it from my side.

Operator

Thank you. The next question is from the line of Ashok Shah from LFC Securities. Please go ahead.

Ashok Shah — LFC Securities — Analyst

Thanks for taking my questions. SIr, very — i’m very much thankful, for excellent performance. Sir, in the presentation,we had stated that, we are serving 2,500 pin codes, so how many pin codes to be pending to be sold? And also, sir, already 17,000 printer, we have got install base, so can you throw some lights on, how many printers of our competitor are in markets? And also do we know same data about our competitor also, or they are not disclosing data or it’s not available for us. See our three competitors are closely held subsidiaries of the foreign counterparts, so very little information is the public domain. So there are [indecipherable] entities so not much of information we can get about their operating statistics. So is it fair to disclose so much data from our side because we may be facing some competition over data to our competitors?

Jaideep Barve — Chief Financial Officer

See this data what we share based like not a confidential data, whatever we can like restrict we are restricting.

Ashok Shah — LFC Securities — Analyst

Okay. And sir, during the quarter how many new customer we acquired?

Jaideep Barve — Chief Financial Officer

In terms of customers, we can’t say it, but, during the quarter we would’ve sold, We had sold 950 odd printers. See we have blue chip clients of our customers there, who keep on giving businesses because they [indecipherable] but yes to answer your questions, we have made over into new customer and that is what i can tell you on this call, we can’t disclose the names to the customer or the kind of volumes we have done with them.

Ashok Shah — LFC Securities — Analyst

Okay. And, sir, one suggestion, last three AGM was held virtually so currently new physical is allowed, please hold AGM physically if possible. Thank you, sir.

Jaideep Barve — Chief Financial Officer

Okay, fine.

Operator

Thank you. [Operator Indstructions] The next question is from the line of Rajnish Behl, an Individual Investor. Please go ahead.

Rajnish Behl — Individual Investor — Analyst

Yeah, good afternoon, and congratulations on a good set of numbers. So I have two, three questions. One is like, what is the current market size of the printers and how much is our market share? And second, is on your — you told that have kept some cash for the further acquisitions, so it’ll be on the printer side or you’ll be diversified to some other sector?

Jaideep Barve — Chief Financial Officer

Yeah. Shiva, you would like to take this question?

Shiva Kabra — Joint Managing Director

Yeah, I’m going to answer this question. So as far as you know, the thing is we are in the coding and marketing business, and basically, that is a sort of sub-sector of digital printing. We have the peeling point that — and one of the reasons of the Mark Print acquisition is we want to get into some more higher-end applications in the coding and marking space or it’s beyond coding and marking. It’s sort of in an undefined sphere. But you can say it’s like a higher-end version of coding and marking. And that’s definitely a diversification that’s happening.

And yes, we have spent on the acquisition to do it, and of course, we also beefing up our own internal development capabilities to meet up some of those applications. We have diversified in the packaging sector, where there’s an overlap of our customers, and this is through the V Shapes Joint Venture. And we have diversified into the track and trace, which is an integration of our printers all the way down into the software.

And also, we are now working on fine-tuning it so that essentially what we were doing was we would providing traceablity to the customer and now we are actually working on actually dissolving customer issues, so which could mean inventory control through fee four. It could mean preventing of diversion of goods from one area to another area. It could mean dealer incentives or other types of incentives that are managed through the system and so on. So then of course to get in touch with the end customer and to resolve the issues besides, of course, anti-accounting.

So there are diversifications which are related to our core business, but I wouldn’t say like the major diversifications in the end, we are just selling more solutions to the same set of customers. But yeah, there is — it is a diversification. All three would be considered to be — whether you’re talking of the track and trace and providing the full solution, whether you’re talking of getting past coding and marking into like more higher-end digital printing type of a solution or whether you’re talking of the packaging industry, the specific reshapes actually that we have started, all three of them are diversions and strictly defined would be close, but not exactly our current business.

Rajnish Behl — Individual Investor — Analyst

Got it. And how big is the total market size, and what is your current market share for our current business and how big is the market for coding and marking space?

Shiva Kabra — Joint Managing Director

Yeah, so Domino — we are number four in the industry. We think the gap between us and number three players now — we are still number four, but the gap between us and the number three players are quite small, at least on a standalone basis. We are — we’re just a little bit less than them, but not that much less. And yeah, so the four of us of mine would be about INR1,400 crores to 1,500 crores in sales. That’s what I would think. And no, about INR40 crores, INR50 crores in sales is the four of us. The total market will be in the region of INR1,900 crores. It’ll be INR1,800 crores or INR2,000 crores, somewhere there.

Rajnish Behl — Individual Investor — Analyst

And how are the coding and marking space market size now?

Shiva Kabra — Joint Managing Director

Yeah. So that’s why I said the four of us combined about looking about the INR40 crores and INR50 crores is my rough estimate, give or take like INR50 crores plus minus, and the entire market would be some between INR1,800 crores.

Rajnish Behl — Individual Investor — Analyst

Understood. And coding and marking space, because this is high technology business and this operating margin will be far than your current business or will be similar margins will be there?

Shiva Kabra — Joint Managing Director

I didn’t understand that question. Could you repeat that, please?

Rajnish Behl — Individual Investor — Analyst

The operating margins for coding and marking space of business will be similar to your current business, or will it be higher?

Shiva Kabra — Joint Managing Director

Would be higher in the coding and marking business.

Rajnish Behl — Individual Investor — Analyst

Okay. And another question is on the V Shape business. When do you think you will start to– start a review for this business in this financial year or next financial year?

Shiva Kabra — Joint Managing Director

I’m expecting to have some revenues in our drawing during this year.

Rajnish Behl — Individual Investor — Analyst

Okay. And in last phone call, you said you are going to bring some technology from the marketing to the Indian market. So what is the status on that and how big market we can capture through marking business line? Because it’s different from our current business line?

Shiva Kabra — Joint Managing Director

So that’s a bit delayed. I had mentioned earlier, we just about got a full set of printers from there and now we will be running it at some customers and see lots of customizations we need for the Indian market. Obviously, the cost needs to come down. So yeah, frankly it has been slow, slower than what we promised and what we expected. But it’s still moving for all the operators, it has been much slower than what we all expected.

And the more teams on their side and on our side, there’s not that much extra manpower being available or resources and bandwidth available to focus on every single thing to do. So yeah, I’m hoping that the coordination is much better this year and we at least have more for developing phase this year than solving the benefits from the next financial year.

Rajnish Behl — Individual Investor — Analyst

And last phone call, you said you have been to invest some more money in marketing, so what is the status? Have you already invested more money or you have to invest that money?

Shiva Kabra — Joint Managing Director

So they already have a final attach with them in marketing itself. We were looking at it to grow further and that’s something we need to discuss with them, but they do have financial resources themselves and also like a surplus cash balance on their side. So yeah, that’s the ascpect. Jaideep, if you want to add more, I’ll give some specifics.

Jaideep Barve — Chief Financial Officer

That actually works on — yeah, that actually works on the operating margin. I mean, the net profit margin is 15%, so they do cash at the moment augmented operations. But in case, I mean, whatever they need, if they want to expand in to European markets or the American market, we’ll be obviously there to help them out in case substantial thing coming out.

Rajnish Behl — Individual Investor — Analyst

Okay. Thank you. Thank you for your answers. And the last question on the like — you have surplus cash on books. Are you thinking for any buy that for the like tax-efficient purpose?

Shiva Kabra — Joint Managing Director

Yeah. We’ve mentioned that the Board will be looking at different things and then you have the resources. We come above that INR50 crores limit. We did do an acquisition, so we wanted to do that, of course, in case there are other things in buying material, things concrete, then we’ll talk about that also.

So yeah, I mean, obviously, like I said, that’s the more decision of what to do, but there is excess cash on the books and there’s no capital investment or acquisition. We will return that.

Rajnish Behl — Individual Investor — Analyst

Thank you very much for the detailed answers and I wish best of luck for this financial year.

Jaideep Barve — Chief Financial Officer

Thank you so much.

Shiva Kabra — Joint Managing Director

Thank you.

Operator

We have the next question from the line of Pawan Kaul from Compound 26 Capital. Please go ahead.

Pawan Kaul — Compound 26 Capital — Analyst

Hi. My question was around the fact that you mentioned that the industry is an allogamy industry. So how difficult or how easy is it for you to kind of source customers and what is the decision-making process for a customer when they are procuring these printers?

Shiva Kabra — Joint Managing Director

So typically, customers tend to stick to one or two suppliers that are established. And what happens is that if they have some new requirements, which or that’s normally when they look at somebody else, everyone occasionally has issues with their service and supplies or rather not their supplies, but their services and their printer performances. And at that point of time, if the customer experiences downtime, then they will look at changing. In general, the single most important decision-making factor for a customer is what the perceived reliability or the actual reliability of the product and the service.

So what they want is they want the product, they want these printers to work, and they don’t want that their line goes down at any cost because of our printers or this type of coding and marking. So that’s a single most important decision-making factor. And on a second note, yes, the market sort of or the customer sort of perceive the four of us as the fourth available, if they don’t want to do experimentation.

Pawan Kaul — Compound 26 Capital — Analyst

Understood. And are a lot of these printers kind of off the shelf or are there a lot of customization built in? Because you mentioned earlier the price point is doing one to four, like for each printer, so would it be mostly…

Shiva Kabra — Joint Managing Director

Yeah, that is a range of printers. But yeah, they’re largely off the shelf. The inks change in case to case, but the way we install it on the line is what really changes from every customer to from one. So like I said, we have a range of printers, like we have like six different lines of printers, and in that, we have multiple printers or different models for different — so we have like a range of products.

It’s like we have air conditioning and you’ll have like window AC and split AC and cassettes ACs and the VRF type ACs or whatever, and you’ll pipe it. So like depending on what the different people require. So I guess it’s something like the similar situation here. We have a range, but yeah, there’s sort of standardized products and then the way we install it on the line, the inks that are there again to somebody even mentioned that in the beginning about the ink capacity, but we have like about 50 to 70 different types of inks that we sell.

So there’s no capacity. It’s more about barrier. And yeah, there is a capacity, of course, but you know, it’s not difficult for us to increase capacity because we already have that set up. And so running eight hours a day, we can just run 10 hours a day. So the– but you look, create the ink, qualify the printer to make sure it runs reliably to make sure that it’s bought for 12 months and even if you — people forget to use it and then use for another 13 months and it still works perfectly. So those all are different — much more difficult things to do. That’s it.

Pawan Kaul — Compound 26 Capital — Analyst

And when you look at, in terms of planning your production schedules, what kind of visibility do these customers give you? Is it like a three-month, six-month kind of visibility that you have on your audit book?

Shiva Kabra — Joint Managing Director

For the woods or rather the consumer presence, so obviously it’s more like X stock, like it’s a customer’s expectation, unnecessary specialty, and then we tell the customers that for these things, we’ll only make it to order and then the customers know, but the standard 20 teams would be available X stocks and the printers normally — yeah, customers expect 4 to 12 weeks for delivery, depending on the situation, depending on the type of product or depending on whether it’s a project or it’s just like a replacement and some various factors.

Pawan Kaul — Compound 26 Capital — Analyst

Understood. And last question. Interested in the fact that it’s in polygamy industry and only for players, so what do you think would be the barriers to entry in this industry? Or is it easy for anyone to kind of set up operations in this industry?

Shiva Kabra — Joint Managing Director

So I think reliability and perceived reliability is the most important thing. Obviously, first, the person needs to have a technology of a high level. And what I’m saying is like we provide like- we measured our uptime, we’ll give like 99.4% something uptime and I mean the gap between us and say like some of the Chinese or the other types of guys has reduced and some of the other people also have good products, but it’s like you can’t just provide the uptime to product, the service, the spares, the expertise that they’ve built over generations, even if two engineers leave, you have to replace them without losing a beat and so on and so forth in that given area.

So it’s about having that entire system so that the customers basic feeding is that I like you, as long as I don’t have to call you, because some things are going wrong. So that’s the thing the customers think about us. So obviously there’s a technology barrier and then the second thing is I do believe — if you ask me personally, I think that it’s not high value enough for customers to frankly care about and explore multiple alternatives outside us. Because this is — it’s a small part of it as project, so they’re not going to overthink about this is what my personal view is. So once they feel that they’ve got like, say, two suppliers that they believe in, then sometimes they’re not even interested in the third or the fourth one.

So even that’s sometimes a challenge for us, because if some customers already satisfied with, say, dominant mark and mark, they might not even consider us a video jet, until they want to replace one of these two because they have — they’re not happy in between. And the same for us in both cases. So that’s the sort of situation that’s there because yeah, it’s like a minor thing, so it’s not like a major cost or a major production cost by any stretch imagination or a cost of a product. So it’s — it has a limited also unless the printer doesn’t work and the line stops.

Pawan Kaul — Compound 26 Capital — Analyst

Understood. Thank you. Thank you so much for taking my questions.

Operator

Thank you. [Operator Instructions] Next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead.

Saket Kapoor — Kapoor & Company — Analyst

Thank you for the opportunity. Couple of points on the balance sheet part. Jaideep sir, please explain this goodwill account of INR10 crores. This has been generated over the last year, last year it was INR48 lakhs and this year, it is INR10.21 crores.

And secondly, sir, we have also seen this manufacturing and operating cost, line items going up from INR1.5 crores to INR3 crores. So this is only in commensurate to the revolution operations or what should we look into?

Jaideep Barve — Chief Financial Officer

The first question first, the goodwill that comes in the converted financial statement and it is basically coming from the acquisition what we’ve done in Netherlands, that pertains to that entity, so it is marking goodwill, which we have [indecipherable].

Saket Kapoor — Kapoor & Company — Analyst

Okay. So the Netherlands acquisition, what is the — what are we holding the equity percentage in terms of equity?

Jaideep Barve — Chief Financial Officer

We are holding — Control Print Limited holds 100% of the shelves in controls and VD, which in turn owns 75% shares in marking VD. So marking VD, when they have started out and in the process of their existence from 2015 onwards, they have the business of accounts, so which it has been like capital, our mix of accounts,

Saket Kapoor — Kapoor & Company — Analyst

This will get amortized whenever, what should be the end user of the same, how is this line item going to?

Jaideep Barve — Chief Financial Officer

Their accounting policy, they are saying it’s going to be above over 10 years and I would imagine it’s about six more years to go for that to happen.

Saket Kapoor — Kapoor & Company — Analyst

More six years?

Jaideep Barve — Chief Financial Officer

Six years more.

Saket Kapoor — Kapoor & Company — Analyst

Okay. Sir, then this will flow to the P&L part or only the reserve?

Jaideep Barve — Chief Financial Officer

Amortization will go to the P&L part.

Saket Kapoor — Kapoor & Company — Analyst

Right, sir. There will be an impact on the P&L on the consulted number going by?

Jaideep Barve — Chief Financial Officer

P&L numbers.

Saket Kapoor — Kapoor & Company — Analyst

And the consulted number, sir. This year there is any impact of the same?

Jaideep Barve — Chief Financial Officer

No.

Saket Kapoor — Kapoor & Company — Analyst

Yes, sir. On accounts of goodwill amortization?

Jaideep Barve — Chief Financial Officer

Yeah. It will schedule this year, right?

Saket Kapoor — Kapoor & Company — Analyst

Yeah, it is goodwill and what is next time — sir, totally to INR15 crores of the year. Is it same as it was last year?

Jaideep Barve — Chief Financial Officer

Yeah.

Saket Kapoor — Kapoor & Company — Analyst

So there is no such impact?

Jaideep Barve — Chief Financial Officer

Maybe we’ll come back to you on this topic.

Saket Kapoor — Kapoor & Company — Analyst

Okay. Shiva sir, I think so it’ll be increasingly consumable percentage that now we should be looking forward with the install base, crossing the 17,000 number now. So the growth drivers would we be increased number only that should be what — that should be number that we as investors should be looking, going at, that should grow from here, the percentage in the revenue mix?

Shiva Kabra — Joint Managing Director

Yes, I definitely agree with you. But in the end, we still have to sell the printers to sell consumers. So in regard, obviously, it’s not effective. I mean, at the end of the regular customer, besides what he wants to print once we supply him the printer. So we have no choice in that.

Saket Kapoor — Kapoor & Company — Analyst

Correct, sir. For the innovative code part, how the performance of that JV or that subsidiary? How are they performing, I think to — they were to be aligned to our Indian operation. So once we update and any investment we are going ahead with the innovative also?

Jaideep Barve — Chief Financial Officer

Innovative goes back about INR8 crores of revenue detail. And if you add up depreciation, then in fact, it is ending cash profit, a minus cash profit about INR30 lakhs. But then that company has got a good potential to grow. So the next year, the positive turnover is about INR30 crores for them.

Saket Kapoor — Kapoor & Company — Analyst

Okay. INR8 crores is what we got from Innovative and from the market, the Middleland one, what was the…

Jaideep Barve — Chief Financial Officer

INR9 crores for May.

Saket Kapoor — Kapoor & Company — Analyst

And it continues to be bottom line?

Jaideep Barve — Chief Financial Officer

Yeah. So typically…

Shiva Kabra — Joint Managing Director

I think marking was only from July, right?

Jaideep Barve — Chief Financial Officer

July, 5th of July.

Saket Kapoor — Kapoor & Company — Analyst

Correct, sir. So it was not for the full year. Impact on the bottom line, sir?

Jaideep Barve — Chief Financial Officer

Impact on the bottom line [indecipherable] it is about — let’s say about INR2 crores additional.

Saket Kapoor — Kapoor & Company — Analyst

This is for the Mark Printer?

Jaideep Barve — Chief Financial Officer

For Mark Printer, yes. INR2 crores of additional ones.

Saket Kapoor — Kapoor & Company — Analyst

Correct, sir. For the depreciation part, I’ll get back to you later. This is once I get connected and sir, only V Shape part of the security, sir. This would be only the equity, the benefit will be pertained to the shareholders only in the form of the profit that will be generated the JV. So operationally, we won’t be consolidating any numbers from them. It’ll be only the performance, the equity part that will come into place?

Jaideep Barve — Chief Financial Officer

Are you talking about the V Shapes JV?

Saket Kapoor — Kapoor & Company — Analyst

Yeah, V Shapes JV part. Yes, sir. How will their-

Jaideep Barve — Chief Financial Officer

V Shapes JV got in corporate in the 26th of March, 2023.

Saket Kapoor — Kapoor & Company — Analyst

Right, sir.

Jaideep Barve — Chief Financial Officer

For the six days of time, there has been no financial transaction in that company.

Saket Kapoor — Kapoor & Company — Analyst

Correct. And next year, sir, will it be only a below line item wherein we’ll be getting the profit or the loss number as JV contribution or a top line and the — all the numbers will be to the top line?

Jaideep Barve — Chief Financial Officer

Shiva, you want to take this question?

Shiva Kabra — Joint Managing Director

And that’s completely so — you are saying that will it contribute to the top line or the bottom line? I mean…

Saket Kapoor — Kapoor & Company — Analyst

Yes, sir. Will it close to the top line part or will it be a single line item just as it has been came with the contribution from JV as we have seen…

Shiva Kabra — Joint Managing Director

Consolidation question, I mean, it would be up to you and the auditors. I really don’t know. I’m assuming that we would — it’ll be consolidated in our statements because we own 90% of it. I mean, 100% of it right now, it’ll be 90%, then 70%.

Saket Kapoor — Kapoor & Company — Analyst

Correct.

Shiva Kabra — Joint Managing Director

I believe the rule that it’s more than 51% something when we consolidate it, but I’m not sure.

Saket Kapoor — Kapoor & Company — Analyst

Correct, sir. What should be the charge money? What’s the business plan for this year on V Shapes?

Shiva Kabra — Joint Managing Director

No. Saket, we just started this business. We are marketing areas looking promising, but it’s too early to save. I think there were some questions on the coding and marking business, and I said it’s difficult to predict down the line, so — and business. So I mean, on something new, it’s really difficult for me to…

Saket Kapoor — Kapoor & Company — Analyst

Last two more points. Sir, firstly, on the royalty, like any division in the royalty related that we are expecting and about the internet [indecipherable] printers, which we were to launch the goodwill, anything on that one? Sir, am I there online? Hello?

Shiva Kabra — Joint Managing Director

I couldn’t hear that question clearly, if I don’t recall.

Saket Kapoor — Kapoor & Company — Analyst

Yes, sir. I’ll come again, sir. Partially on the royalty part. When is the division due, sir?

Shiva Kabra — Joint Managing Director

Can you repeat that again? What is — what do?

Saket Kapoor — Kapoor & Company — Analyst

The royalty division.

Operator

Mr. Kapoor, sorry to interrupt you, but your line is breaking. Sir, the audio is breaking from the line.

Saket Kapoor — Kapoor & Company — Analyst

Okay. Hello? Hello?

Operator

Yes, Mr. Kapoor. Please go ahead,

Saket Kapoor — Kapoor & Company — Analyst

Sir, I was speaking about the royalty part, when is the royalty percentage division due and about the product launch in terms of the IoT printer, what we have?

Shiva Kabra — Joint Managing Director

Our contract with PBA is till 2026, so the royalty percentage should remain the same or 2027, but at least for the next few years, it’s the same. I don’t — so I don’t foresee the percentage of the royalties changing much up or down. And of course, as the percentage of non-CIG business increases, that is substantially royalty free, if not up to entire royalty-free. So yeah, as a percentage of revenue to royalty should decrease slightly. But yeah, as a percentage of CIG business, it remains the same and at least forcibly for the next two years because our partnership is well on both sides and we’re happy with it.

The second question, again, if you could just repeat it, Saket, please?

Saket Kapoor — Kapoor & Company — Analyst

Yes, sir. On the Internet of Things type printers, the printers of IoT base?

Shiva Kabra — Joint Managing Director

So in all of printers, which are new automatically the land cabling of the wireless or something is enabled, wireless we tend to use less because it’s not totally reliable and continuous communication. So if we need to have a controller separate and the risk intelligent printed, we just have to send in the message once and the printed can continue, then it’s useful. If we need to send data back and forth, then we don’t tend to use RS-485 or LAN, but it’s already there in most of our products, as each generation keeps updating user interfaces, other features, so on and so forth.

Saket Kapoor — Kapoor & Company — Analyst

Right, sir. And any further update on the video jet case and the liberty chemicals, the land part? Anything you want to share or the status?

Shiva Kabra — Joint Managing Director

No, nothing. No movement. That hurt, to be honest. Like it’s really quite stagnant, to be honest.

Operator

Thank you. We’ll take the next question from the line of Naysar Parikh from Native Capital. Please go ahead.

Naysar Parikh — Native Capital — Analyst

Yeah, thanks to the follow-up. Just a couple more. One is that the pharma and F&D side, when you’re trying to obviously grow, how are those verticals doing for us? And are you seeing any more traction over there?

Shiva Kabra — Joint Managing Director

Yeah. So I think it’s been doing pretty good. I think like dairys become a pretty big industry for us from a pretty minuscule industry. And of course, we put a lot of focus on that. Pharmaceutical, we’ve not had that much traction now because of the track and trace and the fact that we give an entire solution end to end. We are seeing some more on the track and trace side other than just selling printer side. We are seeing some more traction there. And personal care, we’ve always been strong in for some reason without being strong in the food beverage and pharmaceutical space. So the personal care, we continue to do well, if not do better and — food outside of dairy is a bit of a black spot or whatever.

But yeah, when we are working on different things, it’s improving, but it’s like — I mean, of course, we say things like pool and all, but actually, it’s very sub-industries or specific application type thing that’s there. So for us, bakery would be very different from dairy, which would be very different from very doing, so each thing is there and gradually improving is what I say.

Naysar Parikh — Native Capital — Analyst

Yeah. And building products would be how big for us, like what percentage would be building products for us today roughly?

Jaideep Barve — Chief Financial Officer

So building product, actually — yeah, sorry, Shiva. You can take it. No worries.

Shiva Kabra — Joint Managing Director

No, it also depends on how you define it, like what is improved? Is cable and why part of building products? Is it like five-quarter building products? Is it like pain? So like what I think is — the thing is this construction that you use is such a broad category that — it really depends on how you define it or it’s the main part of building product something else. So you know that what I’m just saying is like the thing is that is something that you have to understand market construction materials and it could be different from your thing. And Jaideep, now, you can answer that question.

Jaideep Barve — Chief Financial Officer

So the thing, as I said, for the building as well for you what I would consume that you must seal or the pricing load or the construction material, laminate, it’s about five tunes. So all of these people together, we get sufficient into this kind of industry. This is the building segment industry.

Naysar Parikh — Native Capital — Analyst

And what percentage of revenue that would be?

Jaideep Barve — Chief Financial Officer

Revenue is skewed. All over [indecipherable] concentration, I can really pinpoint to anything. So you are right. We do have a major concentration of business, except for the pipe industry. But otherwise, it’s more like 10 minutes.

Naysar Parikh — Native Capital — Analyst

Okay. And generally, I think last year we had done around INR1.4 lakhs for printers. If we look at like consumable spare services, maybe all put together. So going forward, how do you see that number shaping up? And are you looking at any price increases or are you seeing competition take price increases and on the consumable side? And do you think that we could see some price pop in FY ’24 and in general, how will that INR1.4 lakhs number shape up in your sense?

Shiva Kabra — Joint Managing Director

Yeah. So it’s not possible to predict anything. Because like I said, we had undertaken some price increases and I don’t know if the INR1.4 lakhs reflects that or not, or to what extent. But the thing is that we’ve got a basket of products, that number sort of quite misleading. Because if I take all printers, all printers don’t give us the same amount of business for printer.

And like we said, for proprietary sakes, we don’t actually disclose the business, the aftermarket business for type of printer that we receive. Again, because you are aware that some of our competitors are…

Naysar Parikh — Native Capital — Analyst

No, that is fair. That is fair.

Shiva Kabra — Joint Managing Director

So it depends on the mix of the basket of products that we are selling. And because we are selling, a lot more non-CIG products, especially the thermal inject and a lot of them are used to print on the cartons. So what happens when you say if you make a pack of — it’s like it is for four cans and then the four cans then tax on a cartons and we’re printing on the cartons. So the cartons, printing is we sell a large number of thermal injects especially and that tends to have less business for printer because you — although the printer is quite large, you also have less cartons as compared to the primary product.

So the secondary printing, so even like that can change the mix a little bit slightly download, but the price increases are the other things that shift to slightly. So it’s a bit in balance, but it’s very difficult for us to predict. And there’s no — we can’t target it because the target is to increase the overall volume of install base business rather than we can look at the specific averages, which means we sell what we can sell as easily as we can sell it rather than get obsessed with maximizing the averages.

Operator

Thank you. The next question is from the line of Karan Bhatelia from Asian Market Securities. Please go ahead.

Mr. Bhatelia, your line is in top mode. Please go ahead with your question.

Karan Bhatelia — Asian Market Securities — Analyst

Am I available now?

Operator

Yes, now you’re audible.

Karan Bhatelia — Asian Market Securities — Analyst

I’m saying ready. Other manufacturing expenses are INR16 crores in this quarter, definitely higher compared to last year and previous years. So which of the cost element has gone up?

Jaideep Barve — Chief Financial Officer

Hello?

Shiva Kabra — Joint Managing Director

Yeah. Jaideep, you want to get back to that question?

Operator

So we can’t hear the audio.

Karan Bhatelia — Asian Market Securities — Analyst

Jaideep?

Operator

We can’t hear the audio from the line. I’ll disconnect and rejoin the line, sir.

Karan Bhatelia — Asian Market Securities — Analyst

Yes, please.

Operator

Ladies and gentlemen, request you all to please stay connected while we reconnect the line for the management. Thank you.

Ladies and gentlemen, thank you for patiently waiting. The line for Mr. Jaideep Barve have reconnected.

Karan Bhatelia — Asian Market Securities — Analyst

I’ll repeat my question?

Jaideep Barve — Chief Financial Officer

Yeah, please.

Karan Bhatelia — Asian Market Securities — Analyst

Jaideep, other manufacturing overheads in this quarter is INR16 crores, which is slightly higher compared to any other quarter or any other year. So what explains this? Which expense has gone up significantly?

Jaideep Barve — Chief Financial Officer

What are you talking about? Not the manufacturing overheads, other expenses, right?

Karan Bhatelia — Asian Market Securities — Analyst

INR16 crores for this quarter?

Jaideep Barve — Chief Financial Officer

Yeah, this is the other expense, right?

Karan Bhatelia — Asian Market Securities — Analyst

Yes.

Jaideep Barve — Chief Financial Officer

So other expenses, basically, their reason is if you look at the expenses compared to same, your ratio is about the same.

Karan Bhatelia — Asian Market Securities — Analyst

I don’t see that because the ratio is somewhere at 19%.

Jaideep Barve — Chief Financial Officer

No problem. It is 14% if you take it on sales process.

Karan Bhatelia — Asian Market Securities — Analyst

How is it possible? Other expenses is 19% of sales. If I get INR16 crores on INR84 crores, it is somewhere at 19% compared to much lower numbers for any other quarter historically. So just wanted to understand which cost element under this basket has gone up significantly.

Jaideep Barve — Chief Financial Officer

So basically, it’s about the same. I mean, as compared to sales, it’s more of the sales. I mean, we are looking at better economies, better rationalization of the cost, which should definitely go down in the next year. But I’m not — I’m seriously concerned that if your count is 16%, I mean [indecipherable] 16%.

Karan Bhatelia — Asian Market Securities — Analyst

I’m arriving at 19%.

Jaideep Barve — Chief Financial Officer

Oh, 19%. Okay. So basically, you’ve added — have you — I think there’s a grouping of expenses that you might have done.

Karan Bhatelia — Asian Market Securities — Analyst

Yes.

Jaideep Barve — Chief Financial Officer

The answer is you like — it’s pretty much the line item, but there is sufficient opportunity for us to optimize it much better way. So it might be next year also.

Karan Bhatelia — Asian Market Securities — Analyst

Yeah, that is correct. That is going ahead, right?

Jaideep Barve — Chief Financial Officer

Yeah, going ahead. Nobody, there’s not much of a difference.

Karan Bhatelia — Asian Market Securities — Analyst

Okay. And on the mark business, I believe for FY ’23, the total yearly sales is not more than INR5 crores, INR6 crores?

Jaideep Barve — Chief Financial Officer

Yes, it is.

Karan Bhatelia — Asian Market Securities — Analyst

So how do we take this business going ahead? Any outside contact?

Jaideep Barve — Chief Financial Officer

See, we can’t plan, right? Anything depends on the COVID situation and the government initiative in complicating the mark, so this is pure quite thing, depending on the health awareness and the conditions. So at the moment, we do not have much visibility on that. But at the end of day, just pure hygiene factor use of is like it started, so wherever possible we got like six customers, like Amazon or some of the supermarket and people ordering us. So unless there’s a major pandemic coming in, we can’t have any visibility of the mark.

Karan Bhatelia — Asian Market Securities — Analyst

And we’ve capitalized the entire investment we made historically?

Jaideep Barve — Chief Financial Officer

Yeah. We have capitalized it and then [indecipherable].

Karan Bhatelia — Asian Market Securities — Analyst

Okay. Thanks for the detailed answer. Any closing remarks you want to make, Jaideep, Shiva, or anyone?

Jaideep Barve — Chief Financial Officer

We would just like to thank all of you for supporting our company and [indecipherable] and we hope to see you in the next quarter. This will be the first quarter for ’23 to ’24. Thanks a lot.

Shiva Kabra — Joint Managing Director

And yeah, from my side, also thanks to everyone, I think in a lot of kind words and great questions coming up. It’s good for us to get a lot of points of view. Like I said, there are some things. It’s difficult for us to project or predict. We don’t — we avoid doing that. I know that that frustrates some people and something we can’t share very detailed information because our competitors are not obliged to do so, and we don’t want to be impactful to them for certain reasons.

And as far as some things also — like I said, we’ve got a longer term viewpoint, when it comes to lot of strategic initiatives, like whether it’s the V Shapes or the digital printing or the track and trace. We’re looking at over — when we are looking at these types of investments, we’re really looking at whether this would benefit us in 2030 or something like that.

So I understand there’s a lot of questions, and of course, we are also looking at whether we are going in the right direction, but in general, we’ve got a cycle longer on things because what we want to do, we want to make sure that we are able to execute in the longer term. And it’s not short-term driven. So just an idea because I know that there’s not as much movement as some of these things as what everyone would want, but we just — we have a different sort of tagline in some of these cases mentally.

So obviously, unlimited amount of bandwidth. So maybe that’s why it’s something we need to improve upon. Thank you.

Operator

[Operator Closing Remarks]