Speaker 10
Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q2NH1FI27 post-earnings conference call of Control Print Ltd. Today on the call from the management team we have with us Mr. Shiva Kabra, Joint Managing Director, and Mr. Jaidi Barwe, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements which may involve risk and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the period ended September 2026, the growth perspective and vision for the coming year, post which we will open the floor for Q&A. Over to the management team. Thank you.
Hello. Hi. Good afternoon, everybody. I'm J.D. Barwe, the CFO of ControlPrint Limited. Welcome all of you to the earnings conference call for the second quarter of the financial year, 26-27. We appreciate that you've taken out time from your busy schedule. Thanks a lot for this. Mr. Shiva Kabra, the Joint Managing Director of ControlPrint Limited, also joins me on this call. For the first-time joiners on the earnings call, more information about our company can be obtained by visiting our website. For information, the detailed presentations has already been put up on our website, as well as in the investor presentation notification on the exchanges for this call. Now, let me provide you some highlights of the performance of control pre-inhibited on a standalone basis for the quarter two of FY2627 revenues. On a standalone basis, the total revenue in the Q2 of FY26-27 is approximately 134 crores. As of H1 for this year, it is 241 crores. Just for information, the comparative figures for the total revenue for FY25-26, FY24-25 and FY23-24 are 460 crores, 395 crores and 347 crores respectively. Regarding the operating revenue, on a standalone basis, it is 131 crores in the Q2 of F526-27. As of H1, this is 235 crores. Just for comparison basis, this was approximately 100 crores in the Q2 of the previous year and 202 crores in the H1 of the previous year. Coding and marking continues to be the most significant business segment. It contributes approximately 94-95% of the total operating revenue. The business outlook for the coding and marking segment for the next half is exciting. With new customer base getting added to our portfolio, we are also in the midst of development in new technologies in printers, inks and cartridges. Furthermore, we are hopeful of improving the contribution margin. This particular segment has seen a steady growth. Pipe, Food, Dairy, Cable, Wire, FMCG, Steel and Wood continue to be our top performing verticals. We are one of the market leaders in Cement, Pinewood, Sugar and Dairy. The business outlook for our Track and Trace division for FY2627 is very positive. We continue to develop new solutions. We have also acquired new customers. We are getting some good traction in the co-packing activities in the packaging division. A pipeline is being generated for the new machines, for the laminate spaces, as well as the co-packing activities. The management of this division is being strengthened and operations are being more tightly controlled now. On a standalone basis, the cost of goods sold is about 41.65% of the operating revenue for the quarter 2. On comparison to the previous quarter, this was 42.32% of the operating revenue. Manufacturing costs are approximately 2.26% of the operating revenue. This is in line with the earlier periods. Employee costs are 17% of the operating revenue Q2 of 26-27. Comparative period in previous year, it was approximately 18% and for the entire FI 25-26, it was 19%. Depreciation is approximately 3.5% of the operating revenue. This remains in line with the previous years. Other expenses are approximately 15% of the operating revenue. Comparative period in previous year and the entire FI 2526, it was about 13% of the operating revenue. On a consolidated basis, the operating revenue is about 144 cores in quarter two of FI 2627. Correspondingly in the quarter two of FI 2526, it was 112 cores. The cost of goods sold is 44% of the operating Compared to the quarter 2 of FI 25-26, it was about 40%. Manufacturing costs remain about 2-3% of the operating revenue. These are in line with the prior periods. Employee benefit costs are approximately 20% of the operating revenue. Depreciation is approximately 3.5% of the operating revenue in Q2, which remains in line with the prior periods. Other expenses are 14% of operating revenue in Q2. Management focus will be now on increasing the revenue for the overseas subsidies. Obviously, we'll also optimize costs in these overseas subsidies. On an overall basis, the management remains committed to optimize the procurement costs and also look at closely into the economy, efficiency, and effectiveness of the operations. This we feel can definitely lead to further direction in the operating costs and increasing the The way forward for our company, we shall consolidate the coding and marking business, will increase the install base, will provide more and robust solutions. We've already implemented certain price increase with reduction input costs and overheads. We feel that our profitability will definitely improve. The track and trace segment is looking very positive. There are opportunities In the domestic market as well as the international market, we aim to capitalize these opportunities by focusing on better marketing and sales strategies. We've got a good pipeline of the orders and the delivery will be in the next two quarters. We expect an increased revenue in the packaging business both in India as well as overseas. However, as I said earlier, we'll focus more and closely with the overseas subsidiaries. We are given the business plans And if we have mandated strictly for the execution, the floor now opens for questions from the audience. Thank you so much.
Operator
Thank you. All those who wish to ask a question, may you use the option of raise hand. In case you are unable to raise hand, just drop a message on the chat window and we'll invite you to ask a question. We'll take first question from Mr. Madhu Ratti. Please go ahead.
Sir, thank you for the opportunity. So firstly, I wanted to understand regarding this consistent delay in breaking even the V-shape subsidiary. So what is happening if you can help us understand every quarter you mentioned that it will get break even in maybe next one or two quarters and then it gets postponed. So if you can help us understand and at what level of investments or losses do we expect to stop these subsidiaries or close these operations down, if you can help us understand.
Yeah, Madhukur Ati ji, your question was that quarter on quarter, the V-ships business, you would like to understand what's exactly going and when exactly you feel the management, you would take a decision on the V-ships business. Is that right? Yeah, Madhurji. Are you audible?
Operator
So, we'll move on to the next participant.
No, no. So, do you want to answer this question or are we just waiting for a confirmation or is it exactly?
No, we can answer the question because he still raises his hand.
No, so Madhuji, I think we've been very clear that, you know, so far, we are more of an execution issue, or there's no demand issue. And the scope of this business is extremely large. So if we need to keep investing in development, you know, from my own perspective, I'm happy. If this is, the more difficult this is, the bigger our moat is if anyone else wants to work. Obviously, we have a patent moat. But in terms of the actual practical copying ability, it becomes more difficult. So normally, it may seem counterintuitive to most people. But we like business which are very difficult to develop rather than easy stuff we can get in. And then there can be like four competitors in it in no time. And it's a me-to solution. So the demand for this product is there. Our execution capability leaves a lot to be desired. But you know, things are improving. So I know that it's not showing up in the numbers, but in terms of where we should be, where we were, where we should be, we are definitely down that road and improving on a year-to-year, quarter-to-quarter basis. So there is progress happening for sure. We are well aware of the sort of return on investment and the rest of the aspect. But like I said, right now, we believe that it's still going to be very lucrative investment for us.
No, so Mr. Kabra, if it is really such a great business, then it should show in the numbers because, I mean, there has to be some endgame. I mean, okay, that this is the duration within which if it does not turn around, that we will think about divesting or shutting down or it is like a government company that no matter how much loss is there, it will just keep on going on and on.
Well, no, Madhuji, I think you're thinking of the wrong analogies out here. I think that, like I said in previous calls, to me, someone like TCS or Infosys has run their business poorly because they missed the SaaS opportunity. They missed the opportunity. They've not developed a product software like SAP or Oracle or something, or even SOLIDWORKS or any of these other types of things. They missed the AI opportunity. They missed other things. Now, in control print, we're taking a conscious decision that we want to invest. We are looking at long-term technology investments. And we want to have IP, you know, protected products. So I'm just doing something, suppose there's Shelly Engineering or something, you know, with their injectable pen or something. I don't know if it developed overnight. Or if I look at Work Heart, for example, you know, the same situation happened where they spent years on new chemical entity development. And it took a long time. Now, of course, we're not doing things at that scale, I have to say. But we are following a very specific sort of thought process where we want to get products which have a high level of IP and a certain mode around them. You know, we are not, you know, in the wonderful companies like Cosmo, Polyplex, or, you know, Max Specialty Films, you know, Topan now. In this type of packaging business also, but, you know, those guys have a different type of USP where it's about a certain type of manufacturing and they're able to scale it up. And they can make those relatively low margin cyclical type businesses work. And, you know, that's all credit to them. But that's not what our core identity is. Do you understand what I'm saying? We've got a business which is mature, which is generating cash, and which we're running extremely well. We want to build three more businesses. One is, of course, an international aspect of our business. One is the track and trace of the Curious Codes business. And the third is the The packaging business. And we're willing to invest in these businesses and create like a sustainable long term, you know, high margin or a high return on capital employed type of, you know, business as a result. So that's the way we look at it. We don't look at it as a, you know, we're wasting money or we're doing something. The question is that, is there a technology that's there? Is that technology going to have a big return? So today, I mean, by some logic, like why should people have invested in the cloud, you know, when Amazon or Microsoft was doing it, I think like, you know, the way the American investors thought about it was very different. Today, people are investing in AI from whatever I can see this Anthropik and Claude and, you know, whatever these other companies are opening, I don't really know anything. But they're all burning money left, right and center. But obviously, there is a certain thought that they have that in the end, they're going to create a long term franchise or something like that. Even Facebook was burning money for years and years and years before they became profitable. But they were thinking with a different type of viewpoint that the first thing was to create a business which had a strong note. And obviously, there was a network effect. So I'm starting to see like the different thoughts everywhere, you know, and if you're looking at a technology investment, you know, I have to think differently. That's the way I look at it. I look very differently in the coding and marketing business, which is also a technology business, but it's mature. And we're seeing the results of that type of business. And I have the option to create two or three businesses which are going to be bigger and maybe give better returns than this business. And if it's going to take a bit of time and effort, it's going to be there even in that tracking case because we've invested more than 100 crores already so far over the last six years. It's just that you don't see it because that's part of the control bill standalone. You know, that's all it is. But if someone says that, did we do a wrong decision? I'll say no. I mean, it's going to have its payoff. And the product we're trying to develop is differentiated. So I'm taking a little bit of time for this answer because I think the same thing might happen to some other participants. And I want to be very clear again that this is a technology development process. There is, you know, it's a bit more difficult in terms of timelines, in terms of optimization, in terms of doing pilots, in terms of many other factors. And I don't know. But at the end, if you are successful, you're going to create something which is going to have a outsized, long term, you know, mode, which can generate like economy, good value for shareholders. I hope that answers that question.
Operator
Thank you. Now, our next participant is Mr. Keval Shah. Keval, you can go ahead.
Hello. Yeah. Thank you for the opportunity. So, sir, if I look at, say, the losses coming from subsidiaries on the PBT level for the March quarter, it was around 12 crores, June quarter around 8 crores, and September this quarter, it was around 5 crores. So this reduction in losses from subsidiaries, is it like a structural thing or still there can be lumpiness and maybe next quarter it can further increase. So just wanted some more detail on this. Yeah.
So fundamentally, we believe that the trend is in the correct direction. But of course, quarter to quarter, there'll be variation. Sometimes, you know, especially in smaller businesses, when we book a couple of big sales or certain other things, it bumps it up and takes it down. But yeah, the overall trend is to constantly reduce those, I mean, or improve the business, improve the sales and improve the business. So, it's in the right direction, but of course, from a quarter to quarter, even a half-year to half-year, the basis, you know, there will be some variations for sure, or positive or negative.
Operator
Mr. Keval. So, we'll take the next question from Mr. Saket Kapoor. Saket, you can go ahead, please.
Namaskar, Shiva, sir. Namaskar, Jadip ji, hope I'm audible. Yeah, yeah, namaskar. Sir, Jadip ji, in your opening remark, you were alluding to some new business assignment And also some something about the consumable part, which will happen in the later half of the year. So can you elaborate further on on your opening remark, firstly, on our main coding and marketing business.
So what I said is that we continue to do a lot of development in our, you know, consumable things as well as the printers. So we like develop new solutions for customers. And they are actually very high value propositions. So you know, like, We are very upbeat about that. And actually, you know, it brings good results for the company. We can't openly say about what exactly we are doing it. But we are definitely doing some innovations in whatever products we offer to the customers.
And in the coding and marketing business, when we do those types of things, you know, it gives us more operating leverage, relatively speaking.
Yes, sir. Actually, there was a background noise, so I just muted myself. So, sir, if we take the EBITDA margin trajectory, sir, what should be that sustainable number and now with the contribution and the operating leverage to kick in going ahead, how should our core business going to perform for, say, how does the outlook for H2 looks currently? And secondly, sir, as the earlier participant also mentioned about the way forward for our contribution from the foreign subsidiaries, if you could just elaborate to us what kind of business environment is currently shaping up and what is our preparation for improving, firstly, lowering the losses and then improving the performance of our investments which we have made in the foreign subsidiaries. So just a ballpark thought process would suffice. And third question also, if you allow, sir, I may ask.
So if I just can take one question at a time, because I'll hear your question before you come to the next question. So your first question, you know, we normally target in our core coding and marketing business a 60% gross profitability. This is including direct expenses like, you know, warranty, wastage, royalty and stuff. It doesn't include R&D and certain other expenses. So it's our own definition of what we believe is a gross profit margin number. So we target about 60% gross profit and about 30% EBIT. Of course, in our case, there's no real interest in all this other stuff. So it comes to the same thing. That's in the core coding and marketing business only. Then, of course, there are investments that we make in other developments and opportunities and other types of stuff. And that reduces the maybe the EBIT margin a bit. The depreciation, I don't think it's very major now, but I'm not sure, you know, yeah. So that's sort of a rough target for our core businesses. And that's what we also target what we would have for our future businesses.
So as far as the second half goes, I think like the because I think the first quarter was a little bit off. I think it was mainly because of the Iran fiasco and all of that. It's still there. It's obviously, I mean, you know, we can predict because these things are still going up and down. It's not a closed issue. But I think, assuming there's no downward surprises, I think that we should be able to maintain a good performance. Like I said, the coding business itself is steady, and I'm expecting, we're expecting that some of the curious codes, pilots, you know, are coming to a conclusion, and hopefully, I mean, I will have some positive news, some negative news, but it will be, you know, one way or the other, it will be concluded, and we'll be able to have an idea of what's happening on them. And on the V-Shapes business, the development is progressing. I don't think we're going to see like major numbers between now and Q4, like in the end of this year. But in terms of the development of our platform, you know, and the gaps that will be addressed in those gaps are really steadily. The international business is developing steadily, you know, and I think we've got the right type of structure in place for that, which can hopefully scale up in the next financial year.
Operator
Thank you. Now we'll take next question from Mr. Pranit Bhomishati. You can go ahead.
Hi, sir. Thank you for the opportunity. So first, I like to, I'm fairly new to the company. So I'm going to ask a few basic questions. Don't mind me. So I wanted to understand since the inception for control print, what exactly happened that God built the company today in terms of technology and industry, let's say if you were to segment it into two decades or the last two decades, What exactly happened? And how did we start? And what changed the industry that we are here today? Could you just give a broad sense on what happened? And what do you think is going to happen in terms of industry and the company?
Mr. Pradeet, you asked a very, very wide and open question. But I'll just try to summarize. See, we started off in 1991. We are into the dish coding and marking segment. When we say coding and marking segment, we do the variable form of printing, which is, you know, like the date code, the batch code, the price, the QR, etc. We have got, till date, we've got two manufacturing facilities in India. We've got 12 offices in India. We've got a branch in Sri Lanka. We've got subsidies in Netherlands, Italy, the UK, as well as in the UAE. Yeah, and we, in the domestic market of coding and marking, we are in oligopoly. So we along with the other three players, we dominate about 80% of the domestic coding and marking. So our business is basically sale of printers, sale of consumables, providing space, and also engaging in after sales, annual maintenance services. So if that answers the question in a nutshell, does it help you or you?
Yes, sir. Yes, sir. Got it. So I'll just ask deeper questions. So coming to the international subsidies, could you explain the idea on why The management chose to go that way. Was it only technology or was it the demand also? That Indian demand has been plateauing. That's the reason we had to go out.
No, so I think there's three very different of all very different specific lines of business here. Just like the same way coding and marking is a specific niche. Like you said, there's one area where we started setting up international operations. There's a CPL MEA. We were in Sri Lanka. That was a bit of a fiasco because, you know, Sri Lanka had its own issues, you know, but now it's profitable and it's working well, and one to others also. So we are doing well in an international business. We've tried to get the right structure in place so that we can scale it up and leverage the control print, knowledge print, and base that we have here. That's one part of it. That's the most straightforward part. That's an extension of our coding and marketing business. But not a broad-based targeting, like what we do in control print in India, where we're there everywhere for everything, but much more specific applications, specific opportunities where we, or industries where we have a genuine technology edge compared to our competition, and therefore we're giving outsized value. Otherwise, to be honest, I would prefer the large local supplier in most cases. And we're not a price competitor. The second part of the business, which is the curious quote, is the track and trace. It's a software logistics type of a business. And that is something which we acquired about five or six, six years ago. We took in a team. We didn't buy the business. We bought the assets, sort of, per se.
And the people. Yeah, the main assets were the people. And yeah, we've been working on that since about six years and really sort of doing a more integrated development between that team, our own, you know, printing team and some stuff that we've taken from Markprint and some cameras. and development work which this team itself has done. So it's a combination of various things, you know, as an integrated solution for the customer. And like I said, I think we've got some specialties out there, which we are not able to discuss as of right now. We've got a couple of pilots going on. We're seeing what the outcome is of that at the end of the day. And yeah, so that's a sort of separate business. It's more definitely pharmaceutical is the main target area there because it's regulatory. compliance there, but pretty much anyone who needs traceability through their supply chain or anti-car-of-the-field solutions, other types of intelligence that they want, their logistics solutions, could be a customer of ours. The third business, which is V-Shapes, is a specific packaging solution. So again, Markprint and V-Shapes and Codiology were all like technology acquisitions. V-Shifts was a certain set of patents. We are buying around a packaging concept, a packaging machine concept for a single snap monodose, and yeah, it's an evolution of the Mitsubishi packaging dispen pack, which is available in Japan, and with some significant benefits, and like I said, we've got a patent mode. The only thing is that the actual, you can say, the actual performance of the machine and the cost element needs to be improved further. And that's what we're working on right now. And so that's taking more time than what we expected, because we've understood a lot of issues, a lot of replacement of the team people out there and so on. But all three acquisitions are fundamentally in Europe with technology acquisitions. MEA, which is our own subsidiary, is fundamentally a geographical expansion. And Sri Lanka has been around for a long time, and yeah, that was the first geographical expansion that ControlPrint did. So that sort of covers, I think, pretty much all the subsidiaries and everything. Yeah, it does. Yeah, I think, so you get an idea. So, yeah, they were basically technology acquisitions, but at least especially for the packaging business, we intend to be a global player. And for even the QG Scores business, you know, we'll be exploring international opportunities once we get these pilots and everything. If we see how successful we are out here, we'll take that call. So, again, I want to be very clear. We have like a ring of patents in that business also. So, even that's a sort of protected business also, say, with our IP layer that we've created around it. Otherwise, we may or may not have been that interested in that specific opportunity.
Operator
Thank you. We'll take the next question from Mr. Samad. Samad, you can go ahead.
Yeah, good afternoon. Thanks for the opportunity. Just on V-Shapes, I think last time you had mentioned that we're working on, you know, I think three aspects, three or four aspects. One was on machine reliability. The other was getting the raw material costs down. The third one was just bringing down the costs in the Italian subsidiary and sort of moving that to strengthening the sales team. And then finally, you know, working on sales growth via co-packing and land-made sales pipeline. So could you, if you could just get into more details on all these aspects and what the progress has been, that would be great. Absolutely.
So going, okay, so the first thing I'm going to start about what we've done. So, you know, if I look at V-Shapes originally, we've got about our cost basis down by about 25% from what it was originally out there, which is why some of the losses have been reducing, we have replaced, so I think from the original people that were there, like I think anywhere between 65%, so maybe 70% of the staff is not there, so we've replaced them with better people, because that was the first thing which we understood, that it's not like the people weren't there, there's some really smart people there, but there's also like a lot of people who are just, you know, not out of control, Let's put it that way. You know, either an attitude or just an aptitude. So, you know, a lot of people will replace. It's a bit difficult in Italy. So it was a bit of a lengthy process because everyone's contracts have to be bought out if they don't resign by themselves and they don't find something by themselves. It took us some time to identify it and that whole thing. So we have got in new people. Almost everyone's on contract. So we have a lot more flexibility. We use a lot more outside consultants now. You know, rather than trying to do everything in-house. So I think there's been some fundamental structural changes where the average productivity per employee and the quality of the employees improved significantly. And like I said, a lot of the excess has been taken out. And the sales team has been boosted, which was zero people, has three, like, pretty good people right now. Now, so that is a fundamental sort of change in terms of the management, the structure and the other stuff. There's still a lot of stuff to be desired. They're still not on our SAP. They still have like, you know, different types of, I mean, they're slower in many ways and not as the quality control and structure and stuff is being built up the way it should be. But, you know, these are, like, big projects because, you know, to do and implement our SAP, there's, like, a task, you know, so we don't know how to do it without stopping everything else for, like, three or four months. And right now, we don't have that type of option. So some stuff that needs to be changed, but a certain amount of improvement that's been done, you know, which is there. The second aspect is you were talking about the machine specifically. So yeah, a lot of issues in the machines have been identified. I think a lot of them are just, you know, stuff where changes happen and they release them without really improving upon it. So a lot of stuff is very basic, ensuring that the drawings are absolutely perfect with the machines that are being built. We've got some specific analysis of where we are finding breakdowns in the machine or inconsistencies. Especially which affect the end customer. That's our priority. So that in terms of, and that's where we've been working upon in terms of fixing it. So we've come up with a bunch of designs in terms of fixes. Now we're going to retrofit those fixes. And then we have a second project. So when we're doing the retrofit, we'll find out probably by the end of this year, not before that, and maybe the actual test will happen in January, whether the retrofits are completely successful. But we expect to improve, you know, get to a 70-80% level of what we should be. Maybe we're at like 30% right now. The third thing that we've done is, you know, we are also, of course, developing that when we take the next set of machines that we have to sell, you know, we have more flexibility because now it's not a retrofit so we can make some adjustments in terms of the design of the machine itself without restarting the machine from scratch. So that's a project that's going on. And our target is to finish that in January or February. So we have a blueprint for the next sets of machines that we would make. And the whole way we develop it is changed. Everything is modeled first. We're checking it all in the software. Everything is in a different way. Then only when we see it on the software, we see how it works in SOLIDWORKS or whatever these guys use. Then only we move to the next level and so on. So that covers, you know, sort of the machine developments. Then coming to the materials, I'm not sure how many of you are aware. We had an Umnuti project in Guwahati, but it's been a bit of an assent. It's been a little bit of a fiasco because they claim that the incentive has run out. So the program has not been stopped, but it's been suspended and we're a little bit in limbo. Now, we have ordered some machines, and they are going to be ready for commissioning or testing soon. So we have to take delivery of them. So right now, in fact, right after this call, I'm going to the factory, and I'm also going here. So we've got, like, two different locations that we've identified with a temporary manufacturing setup. And hopefully that should reduce the cost of the materials, but also, like, give us a lot more consistency and control over the manufacturing. So that was the third one. There's a fourth question you also had. Please remind me of this one.
Increase in sales. How to increase sales?
Yeah. So the sales part is a bit different in that we have some good projects. We just need to streamline the first other parts to be able to really, you know, step on the gas. Like I said, I'm not that type of person. We're not that type of company that would really focus on. So we've got limited projects that we're doing. We will not go out and bombard the market and take on a lot of projects until we feel that we can scale up without having a lot of issues. Otherwise, we're going to multiply the issues because we don't have that level of service and team This thing and these machines are going all over the place. So it's a little bit of an issue.
Co-packing. Yeah, so the co-packing business is going well. That's not a problem. I think that's definitely progressing and we've got like regular orders for that.
Operator
Samad, we'll take next question from Mr. Jayesh Gandhi. You can go ahead.
Am I audible? Yeah, you are. So, my question is relating to track and trace. While I am going through your presentation, it says that there is expected to, I mean, this segment is expected to gain strong momentum. Can you just explain in little detail how are we positioning ourselves here for next two, three years? I mean, what can be the size of opportunity here and what will be our market And one specifically is, is there any deadline for pharmaceuticals also to be included in this from government?
So should I answer this question or is there anything else left to that?
Is there anything that you want to add?
No, that's it. This is the only question I ask.
Okay. So now continuing with the regulatory part, you know, the government had mandated 300 brands in India to implement the full track and trace. Okay. And so 300 brands have started, of which of course we are servicing some. Then they've come out with a mandate, I think sometime in 2027, August, September, but I'm not sure, where they have to implement on the top 1,000 brands of India. There is a third mandate, which is all anti-infectives, which will cover like your antibiotics, antivirus, all those other types of stuff, vaccines, and any type of medicine which has psychotropic or narcotic type properties would also come under these regulations. I think psychotropics and narcotics is also going to happen in 2027, and the anti-infectives, Antibiotics, vaccines and stuff will happen in 2028. I'm not sure of the dates exactly, so take it with a pinch of salt, but 2027-2028 will be two big deadlines because the number of SKUs and brands coming under this purview of the government will increase quite substantially in scope beyond the existing 300 brands. So what's happening is there's been a change in thinking of a lot of large customers where they feel that rather than focusing on putting on three lines, which were in the 300 brands and, you know, doing it, they feel that now the government is increasing the scope of it constantly. So if I have 20 manufacturing lines and anyways, 10, 11 are covered, they're like, just implement it across the board, you know, because slowly or the other, it's going to come across every single SKU is what their belief is. And it doesn't make sense to go for differentiated solutions. Now, the second thing is we've obviously been working on a specific implementation of the track and trace, combining some technologies you took from Markprint, developing upon that known digital printers manufactured here, combining that with some pretty advanced software from our track and trace team, the Curious Quotes team that we bought out. And we've been working on this for like six years now and we've been doing some pilots for about a year and something, like I said, with two top 10 or top five Indian customers. Now we are coming to the end game of those pilots and we are going to, you know, get a feedback of how exactly the field performance is. So we are targeting a certain percentage rate. We're going to see what we achieve in reality and where the gaps, if any, are, or is our solution ready to go because obviously there's been many iterations to be done in the meanwhile. We are waiting for this thing to happen. We believe that there will be a significant anti-counterfeiting, anti-duplication, several other benefits to our solution in addition to obviously meeting all the government norms and there are other types of tertiary benefits that we provide. So I can't give too much beyond this because we are under ND with the companies we are working with, and the project is still in the pilot stage or the development stage. If it's one way or the other, if it's successful, it's unsuccessful, I can then request whether I can disclose this, and then I can decide whether I can talk about it at all or not, because till then we are restricted. You know, we can't discuss this. I hope you understand. We can't discuss any specifics.
Yeah, I got it, sir. Sir, I just wanted to understand what can be an opportunity size here in, say, maybe, say, 28 or 29. Is it going to be larger than 200, 300 crores for a company?
Right now, the market is about 600 something crores, 600, 700 crores. But like I said, you know, out of which ACG, Conjection, Condor, you know, and then there's ProPhase, there's a whole bunch, including us. We also do like a 20-year-old car business even today. So this is a market between 600, max 700, something right now, today. But yeah, it's growing. Like I said, see, this is a government-legislated type business. If the government doesn't change the rules, the market might not grow that fast. If the government, you know, is implementing on the top thousand, right, if from whatever, because it's already been gazetted. Okay, so what I'm talking about and these new SQs coming has been gazetted. So obviously, that's going to increase the market size significantly. Then if people want to go for a solution like ours, you know, it's more expensive because it has more features and more things. And that would increase the market size. So it depends on what you want to do. If you want Thank you.
Operator
Now we'll take the next question from Mr. Parag Hindia. Parag, you can go ahead.
Hello, sir. Good afternoon. Sir, I had two questions. One question was with respect to the latest FSSI issues which are going on for the food industry. So what I understand that the unorganized guys have to, you know, also give packaging dates and other things. So, are we seeing any traction because of the FSSI mandate that the food industry calls for more, you know, like track and trace or maybe like your coding business, which is there? So, do they, you know, require help from companies like ControlPrint? Number one is that. Number two question.
Can I answer that question? Yeah, yeah, yeah. So first, we are not seeing anything much in the market. So I don't think this is gazetted or 100% done as yet, from what I know, because normally we check if there's a proposal, but what matters is it has it come in a gazette, which means an outside regulation. So that's sort of the specific aspect that's there. The second thing is, in general, you know, and I'm not saying it's 100%, but I would say like, 99.99% control is, you know, focused on the largest customers for the most complex needs, you know, and the highest speed production lines and the highest productivity. So we're like, even between VideoJet, Domino, Mark, MMR and us, like we are like, you know, an A group player, like we don't really, we don't normally deal with like smaller customers. We're like, let them start, have issues and when their business grows, So, we will not see that much of a pickup, but so far, from what of my knowledges, I've not seen it on the gazettes. We normally track this type of thing. We're just keeping you posted on that. You had another question, please?
Yeah. And with respect to the international subsidiaries, so the profit, the losses, which were there in the FI 20, was in the range of 20 crores and last year it was 36 crores. This year round, what is the broader losses one could expect from international investments or the subsidiaries?
But FY20, we didn't have any international subsidies.
FY25, there was 20 crore kind of a loss. And last year, 25-26, there was 36 crore kind of a loss on the international business.
Yeah, I guess we are looking more at a curve Of which is trending downwards, you know, and obviously the idea is not to be in a loss or just to be in a profit, but like I said, you know, right now, we're still going through an investment phase, a heavy investment phase in the V-shape, the packaging business, and we are very comfortable because we feel that this is a technology platform, which will give us an outsized return, you know, for the next two decades when we get it exactly to that level we require. But in the meantime, of course, there's nothing preventing us from growing our sales, improving our margins and doing other stuff. And like I said, we are doing some stuff. We have got some equipment where we will be manufacturing our materials. We are working on the recyclable pack. We are working on making the existing machines lower maintenance and higher reliability. So even with the customers who have these machines, they're getting more packs out and more consistently. And so on. So we're doing multiple things here, but we're also working on longer term, you know, projects where we need like high speed machines and, you know, like a lower cost of material and stuff like that. So, yeah, I think the, like I said, you know, the loss is trending now. It's also like we've reduced some structural costs, but we expect that, you know, if things are positive, we expect that to keep coming down because the sales are, Quite frankly low, and you know, as sales increases, it will directly feed to the bottom line out there, because we don't need to add people or cost to service the sales that we're getting.
Operator
Thank you. Now we'll take next question from Mr. Moks Ranka, and I request all the participants to limit the question to one participant. Moks, you can go ahead, please.
Hello. So I, uh, could you please provide a breakup of, uh, uh, uh, like the losses we are doing in our internationally, some specific subsidiaries, like in marketing, Codiology and, uh, CP Italy, like segment wise,
uh, segment wise, or you want to know the company wise.
Uh, yeah, yeah, I'm sorry, company wise, uh,
see, we normally, we do not disclose company But then in case you like, you would like further information that you are free to write an email to me or you can come and visit my office in Mumbai. We can share those results with you. But as a trend is clear that we are on a declining screen in case of the losses. As I can just tell you one thing that Markwind is a company which is, you know, like, which gives profit year on year. So that's probably the least of the worries for us. Middle East operations, which is the CPMEA operations, that has just recently started January 2025. And it's obviously going to pick up and we will definitely have a break even this year. Regarding the coreology and deep shapes business, Shiva has already mentioned twice or thrice in the call that we are closely monitoring the activities, we are optimizing the costs And as it is evident from the results, the losses of the declining spree as of now.
Operator
Thank you. I will take the final question from Mr. Aryan Karam. Aryan, you can go ahead.
Hi, sir. I just wanted to know how you were planning to minimize the losses on your subsidiaries, especially Markprint and the other subsidiaries, Kodiology.
So, Mr. Aryan, I just mentioned, Markprint, in essence, is not a loss-willing company as such. Year on year, it has been giving a healthy profit, not a huge profit as compared to Controlprint limited results, but Markprint is the least of the worries. It's a profitable company, so that's not an issue. The second subsidy which we started, which is very recent start, which is in January 2025, The Middle Eastern operations, we are having a good pipeline of the orders, which will be executed and hopefully, and I'm very positive that by the year end, we will definitely be a profitable entity in the Middle East as well. Shiva has actually mentioned in the call about, you know, the V-shapes and the core logic operations. See, we are doing a concentrated exercise focusing on the way the processes are run, the way the operations are run. We are taking a very hard close look at the operating expenses, including the personal costs. We are also strategizing on the marketing and the sales front. And hopefully we would like to bring a spurt in the revenue, which is basically the top line. Also look at optimizing the costs. And we are seeing the results as of now. We've already You know, like downscaled the number of people in the Italian and UK operations. So the team size has come low. So in the next two quarters, the personal cost would definitely be lower. But as a real thing is that if we have good amount of sales, obviously the top line improves the bottom line also improves, but we are taking one cautious step at a time. So, hopefully, we should be on a better footing as compared to the H1 in the H2 results.
Operator
Since that was the last question, sir, would you like to give any closing comments?
Yeah, thank you so much. On behalf of ControlPrint, I would like to thank all of you for taking out the time and joining us for the call. We hope to continue our best, we'll put our best And we hope to give better results in the edge too. And thanks a lot. And Shiva also would give us closing remarks.
Absolutely. Like I said, this is a technology development platform that we've undertaken. It's a conscious long term decision. And we're confident of our path. If I felt we were down, you know, losing battle, I would definitely think twice, but we are doing well. And I really hope that, and I'm quite confident that we should maintain our momentum in Q3 and Q4, and hopefully end this year well. So thank you, everyone, for your time, and thank you for your support.
Operator
Thank you to the management team for your valuable time, and thank you to all the participants for joining on the call. This brings us to the end of today's conference call. You may all disconnect now. Thank you.
