Control Print Limited — Q4 FY26 earnings call

I think this is a fundamental question for me as a manager and for the shareholders also, or investors, however you want to term it. You see, there are two routes out here. We are in a comfortable position in our coding and marking business. When I look at the results, the profitability has increased on a standalone basis, fueled by the coding and marking business. Even though we have made investments in both the QRiousCodes which actually probably was at least a breakeven this year, I would say, if not at a profit, but it was definitely at breakeven.

Analyst challenged the strategic rationale and financial impact of international acquisitions, prompting management to explain the long-term IP and platform building strategy.

Asked by Keshav Garg

But for the granular approach, like what we've analysed is that since November '25, the new wage code has come into being. And as a result, we had to recast the liability on account of leave encashment and an Gratuity. So, a major chunk of the variance is because we have implemented the new wage code and the hit has been then repeated around. Along with that, we have also done some good amount provision for the sales and service people incentives and also some loyalty bonuses for key management people.

Analyst inquired about the sharp rise in employee costs, leading to a detailed explanation of the impact of new wage codes and incentive provisions.

Asked by Madhur Rathi

So it could be this year also. So what happened was, you know, we had predicted about a EUR 1 million something loss, this like an reduction from about EUR2 million, EUR 2.5 million last year to about EUR1.5 million this year. What's happened is that because of some difficulties in our some design changes or some stuff that we made, we put a bunch of inventory there which still needs to go out to customers. We're not able to build that.

Analyst pressed for a breakeven timeline for the loss-making V-Shapes, and management provided a projection for FY27 while explaining current challenges with inventory and design.

Asked by Vinit Thakur

So that's difficult to say. There are other people in it. So we are a very late entry into the market, relatively speaking. We are trying to offer something which is a very differentiated solution. It's quite technical if someone will have to take the time out to understand what our solution is and how it compares to whatever is the state of the art from other people as of today. But I can assure that any leading pharmaceutical or other similar company will find significant amount of benefit coming to us.

Analyst sought clarity on the revenue potential and market share for the Track and Trace business, prompting management to highlight its differentiated solution and ongoing pilot projects with major pharma companies.

Asked by Vinit Thakur

So what's happening is right now it's not so much about quality control issue. What happens say we made a batch of 10 machines part of them are already sold like so a significant chunk of them are sold. Now the first machine that came was sent to a customer but some issues were there because the testing wasn't as thorough. So then someone else -- the engineer has to go we go in there four times in order to make some changes to the machine. Now it's running fine.

Analyst questioned the persistent quality control issues with CP Italy, leading management to clarify that the focus is now on ensuring all machines are identical and fully stable before customer delivery, rather than initial quality issues.

Asked by Samarth Singh

Yeah. Out of which EUR 1 million is R&D and I'll say like a EUR1 million to EUR1.5 million is all whatever the power and the sales team and a couple of logistics and admin team and couple guys for the production. Yeah there's a few guys production and technicians and that type of stuff. So yeah maybe like somewhere between $2 million to max $2.5 million be like the fixed operating cost assuming like yeah there was no purchasesor manufacturing like we just had people sitting around with R&D types of things.

Analyst sought a breakdown of CP Italy's operational expenses, and management provided an estimate for R&D, sales, admin, and production costs, totaling EUR 2-2.5 million annually.

Asked by Samarth Singh

So I think for me the thought is very different. Like I said it's not that the coding and marking business is bad we have that capacity in us to do much better. I personally feel I have the juice in me to still be motivated to work and do something rather than being like no I'm getting the comfortable growth in the coding and marking business and I want to focus more on my lifestyle and that other type of thing. I think our team is still strongly motivated to keep doing pushing our own boundaries and then we understand that there's a certain lumpiness up and down that's going to come, the size of company that we are.

Analyst questioned if the focus on new technologies implied a slowdown in the core business, prompting management to reiterate their strategic vision for IP ownership and long-term growth beyond traditional coding and marking.

Asked by Hardik Bora

Okay, so the benefits are you get INR7.5 crores back on a INR15 crore investment plant & machinery. If you go beyond INR15 crores, you still get only INR7.5 crores back. So it's capped at that. The second benefit is that you get a 5% interest subsidy on your term loan for a period of six years. The third benefit is that equivalent to the plant and machinery investment, you get a excise or rather a GST refund of the same over 10 years. So suppose I invest INR50 crores in plant and machinery, I'll get back INR5 crores of GST refund every year for 10 years.

Analyst requested details on the incentives for the new Guwahati facility, which management provided, outlining the financial benefits and rationale for the expansion.

Asked by Saket Kapoor