Control Print Limited (522295) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Control Print Limited Q4 and FY '20 Earnings Conference Call hosted by Asian Market Securities Limited. We have with us today from the management, Mr. Shiva Kabra, Joint Managing Director; Mr. Rahul Katri, CFO. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Khettry. Thank you, and over to you, sir.

Thank you. Welcome, everyone, to the fourth quarter earnings call -- conference call of Control Print. We appreciate you all taking out time from your busy schedule to attend the call. Mr. Shiva Kabra, Joint Managing Director, joins me on this call. Let us start with a brief of Control Print followed by specific analysis of the financials of the current quarter and end with the Q&A session. For those who probably reviewing the company for the first time, the detailed presentation has already been put up on our website as well as in the investor presentation for this call wherein we have given a hyperlink to the company overview. Control Print is in the niche coding and marking segment, which is an oligopolistic market with 4 major players, 3 of whom are MNCs, and Control Print is the only Make In India manufacturer. This gives us the advantage to sell our products locally and compete strongly with the other multinational players. We are the only integrated manufacturer of printers as well as consumables in India, giving us the advantage to share the benefit with our customers. This also gives the confidence to the customers for long-term partnership with Control Print. We have our manufacturing facilities in Nalagarh in the state of Himachal Pradesh for the manufacturing of the printers, and the second plant is in Guwahati in the state of Assam for the manufacturing of consumables. Both the manufacturing locations are state-of-the-art facility to produce good quality products. All our consumables are manufactured in Guwahati plant. And in addition, we have also started manufacturing some printers in that location. We have a strong sales and service team of 350-plus engineers which gives us the advantage to service our customers efficiently because predominantly, the after-sales service is very critical to maintain the customer satisfaction. With 10 branch offices across North, South, East, West and Central India, it gives us the advantage to be in direct contact with all our customers through our own employees and build our relationship for repeat orders and continuous supply of materials. Service support for the printer has to be delivered in terms of AMC or camp as well as the consumable, which our customers have to procure on a regular basis based on their production volume. This gives us a continuous direct interaction with the customers, and we get to know the pulse of the market as well as the improvement that we need to make in terms of enhancing our services. We are having complete end-to-end accounting in our SAP ERP system, starting from PO processing to collections, followed by integration of CRM and other ancillary modules, which gives the confidence to the team as well as the customers. We have a widespread customer base catering to multiple industries like pipes and cables, metals, automotive, food and beverages, pharma, FMCG, et cetera. And we continuously endeavor to customize our products to reach out to other industries to increase our installed base. We have the entire range of products in our portfolio to meet the coding and marking requirements of the industry. The details are elaborated in our company presentation. We are very confident that we have the best-in-class products to meet the requirements of most of the substrates, which gives additional advantage to the customers to do business with Control Print. With a strong foundation, and the 5 pillars that is: man machine, material, technology and finance well-established to augment our business plan, we are continuously striving for greater heights. Let me give a brief analysis of the financials of quarter 4 and 12 months of the financial year '19/'20. There was good momentum during this quarter as we came in from a strong 9-month performance. We were in line to complete our target sales and achieve the highest revenue and profitability of Control Print by crossing the INR 200 crore mark in sales. However, in this quarter, as we all know, we could achieve the similar sales of year-on-year basis and fell short -- slightly short of the INR 200 crore mark due to the nationwide lockdown announced in the peak last 6 days of the financial year. Complete lockdown of the country was unparalleled to any disruption experienced in the past several decades. To be specific, the growth in revenue for the quarter is flat, but increased by 11.6% for financial year -- for the 12 months of the financial year. The reason for revenue being flat is again due to the loss of peak, last 6 days of sales, in March, due to national lockdown. The revenue growth for the financial year has been at 11.6%, reflecting a more appropriate analysis of the performance as we had good volume growth in printers as well as consumables for the 12-month period. Operational profit for the quarter was low due to loss of profit as a result of unexecuted orders worth INR 6 crores at the year-end, high consumption due to change of product mix, marginal increase in raw material costs, and costs incurred for improvement of printer technology as per market dynamics. The operational profit for 12 months, which is a better reflection of our performance, increased by 12%. The EBITDA, the PBT and the PAT decreased year-on-year and the financial year primarily due to MTM loss on exceptional items and OCI as compared to previous year figures where there was a gain. These are notional entries and not real loss and will hopefully get neutralized in the coming financial year. The reason for growth in revenue was due to volume growth of printers as well as consumables, which is a positive sign for increase in momentum of industrial production. We believe it will be good to share some details for better understanding of our operational performance in quarter 4 and the financial year 2019/'20. Probably the revenue and profitability figure at first glance do not reflect very encouraging, but the fact is that we were unable to complete our sales target due to loss of invoicing in the peak last 6 days of the financial year due to national lockdown. I have given some details also in our investor presentation. I think you can refer to Slide 6. As per our record, we had approved sales orders worth INR 6 crores uploaded in the system by the sales team, but it could not be executed in spite of having adequate inventory as the dispatch of the material was not possible. The approved orders worth INR 6 crores, if executed, would have reflected the true operational performance and for the quarter and the year, as it would have increased the revenue and generated additional profits of INR 3.5 crores for the company. We have calculated the adjusted figures for some of the key parameters for a better analysis. This is important because we feel that if these orders were executed, this is what would have been the real performance of the company. It is also part of the investor presentation. So the revenue for the quarter 4 would have increased from INR 46.21 crores INR to 52.21 crores. And the year-on-year growth -- with a year-on-year growth of 13.4%, whereas existing figure shows no growth. So Q4 was also going strong till we had that last minute disruption. The revenue for 12 months for financial year '19/'20 would have gone from INR 194.91 crores to INR 291 crores, which means we would have crossed the INR 200 crore mark. And the year-on-year growth of 15.1%, whereas existing figures shows 11.5%. Similarly, the operational profit for Q4 would have increased from 6.21% to 9.71% -- sorry, from INR 6.21 crores to INR 9.71 crores. And a year-on-year growth of 33%, whereas existing figure is showing a negative growth of 14.6%. The operational profit for the 12-month period would have been INR 37.35 crores -- sorry, existing one is INR 37.35 crores, and the adjusted figure would have been INR 40.85 crores, which means a year-on-year growth of 23%, whereas existing figure is showing only 12%. Similarly, in the presentation, you can have a look that the inventory days would have also improved because the inventory would have reduced and would have had a marginal impact on the receivables. So we believe that these adjusted figures are very important for the understanding of the analysts and the investors because this is what we believe would have been the situation if we didn't have the unprecedented lockdown. Now to continue with the other details. The flagship division, the CIJ, had a de-growth of 4% in quarter 4 due to loss of sales at the year-end, but a growth of 10% in the financial year due to consistent growth in all the first 3 quarters, mainly due to normalized production of some of the industries where we have a strong hold like pipes, cable, steel, food, beverages, health care, and was also encouraging to see growth in some of the upcoming sectors like packaging, agrochemicals, et cetera. The margins are healthy with operational profits at 19.1% and EBITDA at 22% for the financial year, with -- including with some scope of improvement because this year, as I just mentioned, has been a little disruptive. The main drivers for the margins are good revenue growth and stringent cost control. Our product launches of PIJ printers, High-Res Printers and TTO printers continue to grow exponentially, and we are confident of their potential in the coming year. With dedicated national level managers giving these -- who are driving these verticals, with focus on specific sectors, we hope to cement our leadership position in these applications. We have realigned our sales team to specialize in these segments, which will give these products the desired impetus. We have also assigned separate managers to focus on OEM sales and key account -- customer accounts, and the strategy is showing encouraging results and showed good quantum of business. The LCP business although reported a decline, but we are changing our focus to non-LCP business, and the team is confident of generating business in the coming quarters in some of the industries where we have been tagging for business. The High-Res business, which is also handled by the LCP team, has shown good growth of 165%. And this has boosted the original -- the moral of the team and kept the combined LCP plus HR figures on a positive note. Laser business is also showing encouraging results and is climbing back as product technology is being improved and the team has been changed. This has yielded good dividend with 27% growth in Q4 and expected to remain strong during the next financial year. The company has strong free cash flows, and the trend is expected to continue. Considering the strong adjusted figures of the financial year with 15.1% year-on-year growth and revenue growth of 23% year-on-year growth in operational profits, we hope the financial year 2021 will be on similar trends with a quick recovery due to slowdown from COVID-19. The impact of COVID-19 cannot be ascertained immediately, and we will have to watch for a few months for the demand by the industries and consumers though we expect a quick come back. Fundamentally, the company remains strong, and we are continuing to work on our planned strategy as we are confident of the growth potential to deliver positive results. I would like to end on a proud note that Control Print has entered the list of top 1,000 companies on the stock exchanges by market capitalization. That was the brief of the financial results, and now we are open for the Q&A session.

[Operator Instructions] The first question is from the line of Keshav Garg from Counter Cyclical Investments.

Sir, first of all, sir, the promoter holding in 2017, used be 55.9%, which came down to 53.5% and sir, last quarter, again, it fell to 51.78%. Sir, so why exactly are the promoters selling and sir, it really becomes that for outside investors to have confidence in the people running the company only are exiting?

No, I think there are 2 reasons. The promoters have not -- firstly, the promoters have not sold any shares of theirs. The first shift from 55% to 53% was because of QIP, which we did in, I think, January 2018, it is the QIP, and that is where the promoters holding had come down. And recently from 53% to 51%, I think because the promoter grouping has changed as Mrs. Nair -- Ms. Nyana Sabharwal, who was in the promoter grouping, is no longer part of the promoter family. So her exit has reduced it by that 1% that you're seeing now. I would like to reiterate that promoters have not sold any shares.

Okay. Sir, that's very reassuring sir. And also, sir, our company used to be a very high-growth company and sir, we had a very great track record of increasing turnover with increasing margins, sir, but unfortunately sir, since the past 2 years, sir our EBITDA after peaking out at around INR 54 crores in FY '18, then it has fallen for, I mean, last few years. I mean even if we adjust for fourth quarter, the dispatches that could not be made. Sir still, we are -- our margins are significantly lower than what we did in FY '18, sir so what exactly the reason? And sir, do you foresee again reaching our 30% operating margin?

So I would say that in terms of growth slowing down, we're still growing at about 15.1%, which is not something that is very discouraging. So we should not -- and as I mentioned that if it was not for that lockdown, we would have crossed INR 200 crores in sales, which is what we had targeted at the beginning of the year. So I'm not very discouraged based on the revenue. Operating profit, yes, sometimes, it does have some fluctuations. But as of now, we are still at, I think, '19 operational profit, yes, we're still strong. And for the year, it has shown a growth of 23% in this financial year. So there's nothing to worry. I think the fundamentals that you mentioned are strong. It could be some product mix do change at times. And if we sell our consumables by increasing our installed base, the margins will follow them. So -- and there is no major change in our strategy. And I think we should just -- any long-term investor can have full confidence on the company.

Great, sir. And sir, also, are you seeing any hit on our receivables due to maybe some customers holding up and the general disruption in the market?

So nothing as of now that has come back from the team, we did have a meeting with the -- all the branches who are in direct contact with the customers. And from the company side, we extended our support to our customers with the intention that because of this disruption, some customers could be having issues in starting up. So we will not try to put extreme pressure on them for recovery. If we feel that they are good customers in the long term, we will extend some extra credit term. But at the same time, they were clearly cautioned that if you have any doubt on any customer going down or the company's money should not be going bad. So there, we will put our strict credit terms and try to recover our existing outstanding. But we haven't really got any big feedback as of now. So I believe that we want to maintain our relationship with our customers. And this is the period where you have to support each other. It's something that no company has gone through before or envisaged. And Control Print wants to use this opportunity as control -- customer relationship building rather than annoying the customer for a long-term business prospect.

Sir, so our -- basically, customers are sir, basically sir, is it B2B directly? Or sir, are we selling to distributors, who in turn are selling to the end customer?

As I mentioned, we have all direct employees who are in touch with the customers through our branches in 10 locations across the country. We don't have any distributor or [indiscernible].

Okay. Sir, so basically sir, let's say sir, basically, I just wanted to understand who your customer is sir? Like, maybe some FMCG companies who are basically using your printers for basically printing the MRP, et cetera. Is it like that?

So yes, I mean, it's a very basic question, maybe we can handle that sometime later. So you rather stick to mainly the financials. Otherwise, it will be a long discussion. But you're correct, it's basically FMCG companies, which do the printing for their batch number and their expiry date and MRP code.

The next question is from the line of Agastya Dave from CAO Capital.

Shiva, just one question. I understand the INR 6 crore unexecuted order by the end of the quarter. But you have also mentioned that there was a mix change and a hit to the margin because of raw materials. So this mix change is also understandable because you can't control what orders were not executed towards the end of the quarter. Am I right in that assumption? Or is it something which we will see for the remainder of this year? And second, how are things now? Like the level of recovery in various end user industries are all over the place, but what's your commentary? What are you hearing from your customers?

So yes, like you correctly mentioned that product mix is sometimes not in our control, but if we would have done the executed orders, it would have definitely improved because mostly consumables were pending to be dispatched. And that would have increased our profit margin also, which I mentioned. So overall, I think that it's not something to be worried on the long term. We -- I did mention that change in the raw material prices. But that's, again, it doesn't -- very high because we have high margins. So though it is a general statement, we do have some prices increased, but it's not something that we go back to our customers and try to get price increase because of this. So overall, we are able to absorb it through some cost-cutting or other value engineering, and that's a continuous trend. So it's not something that you should be much worried upon. COVID, like, to be honest, April was a challenging month and it was for everybody because there was lockdown all across the broad. But May and June, we have seen good recoveries for our product because most of the industrial facilities have opened up, and we will see the results soon in the next few weeks. But yes, we have -- to be honest, without being too optimistic, we have seen better revenue than we expected considering the all around gloom. So we are on a positive note and hope the recovery will be even quicker. Though it is not peak lockdown level, but definitely better than we expected.

Sir, you also mentioned the receivables part, can you give a similar comment on the pricing part? Are you expecting any pushback or are you preparing for any pushback on pricing? Will that be a difficult thing for the next, let's say, 1 year, where we could see raw material -- the bulk commodity prices going up maybe, but you are somehow not able to pass on. Should we be prepared for that?

I wouldn't give much weightage to it though with some customers regular discussions keep happening, but we don't see a major impact coming on our side of it. We will respect customer request. But at the same time, we are able to balance it with other benefits. So I don't think from Control Print perspective, we will see major impact on our financials. But again, it's something that it's too premature to be sure on. But as a trend, I feel that we will be in a better position than maybe some of the other companies.

Perfect. And one final question. You said that the exceptional items, there is some probability of them reversing. Could you describe exactly what mechanism -- I mean, what things should happen for the hit on the OCI and the exceptional items to reverse? The OCI part, the equity instruments, are you still holding on to them? Or have you sold them? Would that be the reason why we won't see OCI hits?

Both exceptional item and OCI are related, like I mentioned, is related to the MTM, which we did on our equity share and -- that's the reason. And as we all know, that the markets crashed towards the end of the financial year. And as I mentioned, it's only a notional entry for the NPS application. And now since the markets have recovered this quarter, hopefully, we will see a reversal of that, both in...

Sir my question was more on the -- the MTM part, I understand. My question was, are you still holding on to the shares? Or...

Some of them, yes.

[Operator Instructions] The next question is from the line of Vaibhav Doshi from HDFC.

Shiva, I have 3 questions. First, could you walk us through different industries and how they're performing for you, because you operate in several industries, cement, pharma, FMCG? So what's happening over there, which industry you feel is going good, not going good? What's happening over there?

Yes. So do you want me to answer that question? Or do you want to Rahul to answer that question?

Yes. Anyone, anyone.

I can take that for you. So yes, so as I mentioned that our strong hold is in the pipes and the cables, the food and the steel, FMCG segments, these have been quite good for us this year. That is the reason why we had 3 strong quarters in this financial year. And the fourth quarter also was going great for us till the last week of the financial year. So apart from cement, where we have been seeing a decline for us in the last few years all the other segments have definitely shown us a good growth.

Okay. Have they revived post the quarter 4, which were in stress?

It is premature to analyze it, so I wouldn't get into early predictions, but we'll just wait for the Q1 results. Secondly most of the industries are in rural India. They are not in the cities, they are in the peripheries. So we find that all our customers are operational. And even though some cities like Chennai or Guwahati have had extended lockdowns, the company's production facilities are running. So even though it's the branch or the head office or some other offices affected, our main source of revenue comes from the factories, which are operational. And both our own factory, that is the Nalagarh facility and the Guwahati facility are also operational. So for us, dispatches and everything is taking place. Since we all are lockdown to the SAP system, there is no problem in our execution of orders, whether it is at any branch level or at HO, and our collections are also mostly online. We have very little physical cash/cheque collections. So overall, we are not -- work as such is not affected from any site.

Sure. That was helpful. Secondly, during the QIP, you had said that you would be exploring export markets and the money raised will be utilized for anchoring stroke -- enhancing our foothold in growing markets. So how has been the progress over there?

So we did some groundwork in a couple of markets, but there was so much happening in the Indian side that our focus remained here. And now with this global disruption, it's not only India specific. So maybe those plans will be shut for the moment. But we'll have a -- we keep looking at it, if some market opens up, then if it can be a startup...

So was there money deployed in the quarter?

We continue to export in our existing countries of Nepal, Bangladesh, Sri Lanka and to our partners in Germany.

Sure. One last question, if I may squeeze. So in the notes to accounts, you had mentioned there was some disclosures to the payment relating to Videojet. Could you kindly highlight the Videojet number?

Even in the previous quarter, we have discussed about it. It was a court order, which is sub-judice. And in this quarter, we had filed an appeal against the arbitration award, which the court has admitted. And we have deposited INR 2.3 crore bank guarantee for that order. So basically, the initial amount that was reported of INR 6 crores plus interest has quite been substantially being reduced by the court by accepting INR 2.3 crore bank guarantee. So I think as of now, we are in an improved position against that arbitration award. This is -- just to elaborate on that, this is -- the hearing was supposed to be in the month of April, but because of this lockdown, it has got extended. And we hope once it opens up our side of the argument will also be heard and we would like to see the order being reversed in our favor.

The next question is from the line of Ritesh Chheda from Lucky Investment.

Sir, what is the printer population now we have? And how much printers will we add in the year gone by?

So we did the highest printer sales in spite of losing some printers in the last week, in the financial year we sold about 2,400-plus printers. And total population would have crossed 12,000 active printers.

Okay. And our market share would be?

Yes, as per the last, what we had reported was 18%. But since we don't have the latest results of all the other competitors, we're not sure if we have increased as of now. But we hope that with our strong current financial year, we would have gained some market share. But we have to wait for other results to be published.

And we sell to, let's say, steel customers, cable customers, pipes customer, FMCG customers. Any broad mix you can give which can give us some indication when we make some projections for growth?

To be honest, we don't get into the industry-wise details because it's in public domain even for our competitors, and we wouldn't like to share extra information.

Okay. And lastly, any progress that we have done on -- just a minute, there were 2 printer types, which we were -- yes, one is PTI and High-Res printers. Any progress there?

Sure. We think that there is...

There is a lot of progress in both of those printer categories. So we saw a good traction last year. In all honesty, this coronavirus has hit us really at a bad time because we were gaining market share, we had good revenue last year, and I think that we lost momentum going into this year. It's still okay. It's not bad for May and June, although April was a wipe out. But I think that definitely, it would have been a good opportunity for us to pick up market share in this -- not only towards the end of last year, but also in this entire year, if the market was more normal so to say. But still, we will do our best in that. But what I can say is like all the product categories of us are getting a good reception in the market. And that was also one of the causes of growth last year. But I think now the situation is a bit dicey because, obviously, like in the end -- in all honesty, like a lot of people have ordered lines in advance. So people plan expansions 2 months, 6 months or whatever. So I think there are a lot of those things have -- orders from before, they continue the expansions. And I think with the whole FMCG, dairy and those types of food, pharma businesses will continue well. On the industrial side, we're a bit more concerned, like, will cement companies expand capacity at all this year? We will be planning something before. Those orders are still coming in as they had with some expansion before of steel companies, but what's going to happen for the regular. So it seems like it's going to be more packaging-driven, this is what my own belief is. So we have -- we are trying to ensure that our products are more focused on that -- those applications right now in our sales.

And lastly, sir, we have invested a lot in the fixed assets in the last 3, 4 years that was in the data that I'm looking at. Where have we invested in the last 3, 4 years in terms of asset creation?

Is this after the Guwahati plant started or before that?

Yes. So I'm trying to compare between let's say, '15 and '20, so last 4, 5 years?

So '15 onwards, the main addition has been on the Guwahati facility, which was capitalized in 2016. The next has been because of Ind AS coming in, we had to value all our properties at market rates. So that had to come in line. So there was a revaluation done to all the properties. And of late also the -- we have -- there is this concept of Ind AS 116, which has come from the right-of-use of assets wherein even if you have a rental office or a leased asset, you have to show it as part of your fixed asset and not on the rental income. So it's basically accounting entries. Apart from the Guwahati facility, we've not had any major CapEx done. We bought a few offices for our use. But apart from that, it's just been maintenance CapEx and some expansion and debottleneck in machinery. We have recently taken up some expansion in Nalagarh, but that will probably get capitalized more in the next year. But again, it's in a few crores, it's not like INR 10 crores or plus.

Guwahati CapEx was in total?

Guwahati happened in 2016.

What was the quantum of CapEx, INR 25 crores, INR 30 crores?

Yes, yes, around that.

And thereafter, whatever you have done is maintenance?

There is some expansion in all also. And we have put in some more lines, some expansion on the site and everything. It must have been at least INR 7 crores, INR 8 crores since that time, I think. We built a site building for raw material storage, we expanded the finished goods storage. We built some new area there. We put in a bunch more lines for manufacturing the smaller product, we would have spent money. I don't know how much exactly, but we would have spent in crores at least.

Yes. Over the last 3, 4 years, that would be the spend.

INR 8 crores, INR 10 crore?

But a lot of it that you are seeing, to be honest, the bulk of it that you're seeing is basically because of this Ind AS 16. And our rental printers, which were earlier shown in inventory are now shown in assets. So this is part of our business model where we give out printers on rents. So all that gets capitalized, but it's not like -- it's a deferred revenue more than capital expenditure.

Perfect, sir. Lastly, what is the cash in the balance sheet and debt exactly?

Can you come back as others might not get a chance.

Please conclude that question Rahul if he has asked it.

Yes. So maybe -- sorry, you can ask that last part.

I said, what is our year-end debt and the cash in the balance sheet?

So we are a debt-free company. We don't have any debt. And mostly, to be honest, we gave the highest dividend in this financial year of about 2 interim dividends. The first one was INR 3.5 per share. And then in the month of March, we gave another INR 4.5 per share. So total, we gave about INR 8 per share, and most of the cash has been utilized to give it back to the shareholders. So as of year-end, we don't have any debt and there's minimum cash in the book.

The next question is from the line of Deepen Shankar from Trustline PMS.

Just wanted to get some revenue contribution from these printers, consumables and PATS and services division.

So for the full year? For the full year, it is -- printers is about 20%, 21% and consumable is about 55%, 57%, and the rest is sales and service.

Okay, okay. And how has been the capacity utilization of the plants for us now?

So at the Nalagarh plant, which makes the printers, it is at about 75%, 80% of the capacity. And Guwahati, we are in the range of 45%, 50%. We still have enough capacity to expand -- to handle orders and inventory.

Okay, okay, okay. One question on these margins. So we are seeing this mix of printers going higher over the last 2, 3 years and consumables not increasing. So there is some pressure on margins visible. So earlier, we used to do some 25% to 28% kind of operating margin. So now we are around, even for adjusted for Q4, the INR 6 crores and INR 3.5 crore on EBITDA. So then also, we are around 20%, 21%. So when do we see even over a medium term, when are we expecting this EBITDA margins increasing to the levels back to 25%, 28% kind of margin?

Silver lining is that we are selling more printers. And our business in the long-term is driven by installed base. So as I mentioned that 2,400 printers is the highest that we have sold in any of the previous years. This only builds for our future. So we should not get discouraged by maybe a quarter wise margin. In the long term, the printers are the ones which will give us more revenues. And this is what will add to our consumables and things. So anybody looking for a long-term perspective definitely should be happy with the number of printers increasing. And definitely, nothing to worry. We will -- once -- as you mentioned, the consumable percentage increases close to 58%, 60%, you will see that the margins are back on track. So volume -- value-wise, the margins are increasing. Percentage-wise, maybe it's there. So these printers will add to the value. So you'll continuously see an increase. Of course, this might be an exceptional year because of COVID. We can't make any early prediction. But we will be fast to bounce back. And I'm definitely not worried on margins as long as we sell our printers.

Sir, definitely, so we are also happy to see the printers growing. But are we seeing this active printers also growing year-on-year to that extent? Are we are expecting in future these active printers to grow at a faster rate than at current levels?

So let's stick to what is currently. I think currently, we've done -- we continuously -- the printer volumes have increased in the last 2 to 3 years. And like Mr. Shiva said that we have the best-in-class printers, the whole range is covered. We are gaining market share in our new launches. So I think we are on a positive note.

I think that also -- I want to just say that in the last -- and what's also maybe affected margin was 2 things: one is that we were getting before -- it was excise freeze -- I mean, Rahul, maybe you can explain that the Guwahati part. So that also was withdrawn when the GST was launched. There was some conversion. So we had a lot of incentives. That's the reason, basically, we were in Guwahati. Otherwise, we have no reason for Control Print to go to Guwahati. We don't have a problem in Guwahati, but there was no reason to go to Guwahati except for the tax incentives. But because of the GST, the government withdrew those tax incentives. So -- yes, but I mean -- and we're not like a big company, like a Godrej or a Unilever or a Tata Steel or whatever, okay, if this thing doesn't work out, you all set up a factory somewhere else or something. So we were there. So now we are there -- because it was too late to pull out. So that was a thing that definitely affected or rather increased margins at one point of time, but then there was like a 1-year hit, and I think that got over very fast. But the other thing I must say that during the last 3, 4 years, we've invested a lot of money in our product range, in our product development, in research and development and stuff. I don't know whether those expenses are shown clearly or not or something. But it's -- some of those costs will come because you don't really, what do you call, rotate them as an asset because we're expensing them. They would come maybe in cost of goods, somewhere in that line. And in terms of people that we are using or consultants or whatever you're paying, so maybe in terms of salaries, maybe in that SG&A. So I think that we spent a effort and money developing these product lines. Like I said, last year, we were in the benefit of it. Maybe 2, 3 years, what happens is, you build something and it's like 80% there that some things are missing. You make something and someone always want some different feature than what you made. So like I've invested a lot on the AC, and I wanted to make it like 5 star. One of the guy said, "No, I want a inverter function." You make the inverter function, he says, "No, no, people won't like. It should be a different type." Something funky is always there and then you get the product perfectly right. Everything is moving, but -- so it was a good year for us. And I would say that last year, definitely some of the growth that happened was because of the new products getting traction on that. And guess this was -- it's unfortunate this corona has happened but at the wrong time for us. Because this was really our time to really pick up a good chunk of market share is what we felt, and this year was -- because we'll be, like I said, in a long time to sell the first 15, 20 printers, 10 printers is the most difficult thing. Once you have 3, 4 references, it's much easier to go and tell someone that now I have got a better technology for this type of application. So then that sort of builds on itself. So -- yes, so that -- a little bit it's been killed in the last 3 months or so. Like, we're doing okay. Like, I have to say, we are actually not doing as bad as what I thought the situation will be because maybe we are sitting in Bombay, so I'm feeling like totally lockdown or something, at least the rest of the company seems to be working much more. But what I think is, like, there was a lot of investments in visible investments in those situations. And this is the time I think that we'll see the benefit might be in the coming -- I mean, this year is a very tricky year. I mean there's no predictions for this year. I've not seen anything like this in my entire life. But I think if the GDP or the country normalizes in a few months because right now, we're not even -- there's lot of uncertainties as to how long this coronavirus itself will last. I have to be honest, like, in March, we thought in 3, 4 weeks we'll be back at work, everything will be back to normal. I cannot imagine that in 3 months later, Bombay will still be under like a lockdown or something like a restricted situation, whatever you want to call this. So I think that's the essential situation. So there's been a lot of investment that has happened in these other situations. And like I said, there was something in a certain time, which was a Guwahati manufacturing benefit, which got withdrawn whenever that GST started. So I don't know when the GST started and when that benefit was withdrawn, but that...

On 1st July '18. Mr. Shiva, if you compare from 2017 to 2019, that benefit would be at least INR 4 crore or INR 5 crore on our top line as well as...

That was directly on the bottom line because that's just like The Street.

Yes. That was a big impact, but I think we have been increasing our volumes, so some of that impact has been neutralized.

Okay, okay. So as the contribution of these newer printers gets increased and then active base increases, then consumer bills also increases, then we'll see that margin increase, right?

Absolutely.

That's already happening. So you'll see that the volume -- volume-wise, it is increasing. Percentage-wise will catch up, don't worry about that.

The next question is from the line of Devanshu Sampat from Yes Securities.

So just 3 questions. So one, on a very broad basis, right, so in a post-COVID era, there's all the more focus on local sourcing and the whole anti-China thing that we have. So does it change the dynamic for us or any of the other 3 major players in terms of, like, duties or any advantage, disadvantage that you can think of? Or is there something that we're looking to use as a marketing tool or something?

Shiva, would you like to take that?

Hello?

Yes, you would take that or you want me to answer?

Yes, I think if you can just repeat the question, and just make your volume a little bit louder maybe that would be better.

Just 1 second, sir. Yes. Is it more clear now?

Yes, better.