Good afternoon, ladies and gentlemen. I'm Felicia, Moderator for the conference call. Welcome to 5paisa Capital Q2 FY23 earnings conference call. We have with us today the management on the call. As a reminder, all participants will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone telephone. Please note this conference is recorded. I would now like to hand over the floor to management. Thank you, and over to you. Thank you. Very good afternoon, everyone. Myself, Prakarsh Gagdani. I'm the CEO and whole-time director of 5paisa Capital. I welcome you all for the Q2 FY23 investor call, along with my colleague, our CFO, Mr. Gourav Munjal. Since Q2 FY23 has been a milestone quarter for our industry. This quarter we have hit 100 million Demat accounts as a country. I feel this is a very important and a solid start, and it is a matter of time that investment in capital markets will be a preferred investment destination for every household in the country. For 5paisa also, it has been a milestone quarter as we've not just crossed 3 million customer mark, but also achieved our highest quarterly profit. Speaking of business, one of our focus was always to improve the quality of our customer acquisition, along with reduction of customer acquisition cost, which is CAC. We are happy to say that we have succeeded in this and our CAC, which was around INR 895 for last quarter, has now come down to INR 574, which is a 36% improvement as compared to the previous quarter. Our efforts in identifying the right source mix, improving entire onboarding journey, improving the do-it-yourself customer journey, and also the straight-through processing cases has helped us reduce all these costs which are associated with account opening. We continue our effort on the same, but we now feel that our cost of acquisition will stabilize and be in the range of around INR 500-INR 600 in the coming quarters. Further, in Q2 FY23, our broking income improved by 3%. However, our total income was down by around 4.5%. The drop was majorly due to the reduction in our margin funding book, which was associated with, directly associated with the overall market sentiment in the first half of the quarter. Our overall turnover has also gone up to INR 1.69 trillion, our ADTO, which is 25% growth quarter-on-quarter. We've not just seen improvements in our ADTO, but also in market share of derivative segments. Along with our broking business, our cross-sell business has also seen improvement. We have seen our subscription product, the user base has grown by 6%. Our mutual fund AUM improved by around 14%. Our mutual fund SIP improved by almost 71%. With all our efforts in focusing on revenue, improving cost efficiency and also product development, we have succeeded in achieving our highest quarterly profit in this quarter of INR 10.75 crore, which is 45% growth quarter-on-quarter, and almost 672% growth year-on-year. Talking about our product, we focus a lot on enhancing features in our mobile app and our web platform, which will benefit traders. I am delighted to share that we have launched a dedicated trading terminal for our derivative traders. We call it as FnO 360. This platform is built with the philosophy of providing the data and tools which shall help the derivative traders with better decision-making for their day-to-day trading. Investors will also be able to trade, view their order, positions on the same platform. There are various features in this platform that we've launched which will benefit derivative traders. In addition to that, many new features like MarginPlus as a product, One-tap Rollover, Quick Reverse, all these features were launched in this quarter. This has helped to improve our mobile app rating from 4.2 to 4.3. Lastly, we will continue our journey on improving our product, our efforts on reduction in cost, and at the end, to improve the entire trading experience for our customers. I'm confident that this all will help us to accelerate our revenue and profitability in coming quarters. I open the call for questions, and I'll be more than happy to address them. Moderator, can you open the forum for Q&A? Sure, sir. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. We will wait for a moment while the question queue assembles. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. First question comes from Deepak from IIFL Securities. Please go ahead. Thank you for the opportunity. My question is regarding the impact of the recent regulation on funds paying back to the customers on first Friday of every month or quarter. What has been the impact of this on your margin book and second, on your other income? See, quarterly payout was always there because they were anyways doing it on a rolling basis for customers. That has not changed. What has changed this time is that on one particular date, you know, the funds are paid out. Now, typically, if you see the funds which have gone out on seventh of October quarterly by people who are actively trading. A certain amount of such funds are already back where customers are trading, and I don't see a very material impact of that on our revenue. As far as the margin funding book is concerned, obviously that is not impacted because those are the customers who are already are into debits and are using our, you know, funding facility. There was no impact on that side of the business. Overall, on a business front, I don't see there's an impact. Operationally, the process was absolutely smooth and, you know, we could complete the entire exercise in the time given by the regulators. Okay. Just a follow-up on this. Post seventh October, let's say, how% of your money, I mean, that has been paid out to the customer has been recovered till date or else in the next four or five days? Any percentage you can give? I'm sorry, but it would be difficult for me to share that information. I can say that the amount of that money has come back. Okay. My second question is regarding your cost of acquisition. We have reported a very excellent, I mean, very sharp decrease in cost of acquisition. That is mainly because of the cut in marketing and business promotion. In terms of sourcing, have you changed any sourcing? I mean, can you give us a kind of sourcing mix, I mean, a ballpark figure between the referrals, your promotion, I mean, performance marketing and organic search? That would be really helpful for us. What we've done is, as you rightly said, we've been working on improving our quality of acquisition and the mix of the acquisition. It will be difficult to actually give you a percentage, but for each of the source. I can say that large part of our you know, our acquisition today, almost 65%-70% of our acquisition is organic and also through reference. Our objective was that it would improve going ahead, and most of our acquisition should come from organic or through the word of mouth. We are right now in the process of that. Broadly, 65-70% of our acquisition today is either organic or through word of mouth referrals from our existing customers. Okay. Thank you, sir. Just a quickie, a last question from my side. So in terms of the accounting of subscription fee, how do we account it? I mean, do we defer it over the year and account it on a monthly or quarterly basis, or else on upfront basis, I mean? We follow our Ind AS in this regard, which is revenue recognition. If the plan is a monthly basis, then we, I mean, in the same month. If the plan is for one year, then we defer that revenue for further 11 months, and it is based on Ind AS prescribed by ICAI. On marketing side, I mean, marketing and business promotion expense, we account it as and when the client is getting acquired in the same month, right? Yes. Yes. There is no deferment in this. When the client has been acquired the same has been booked in the same month. Okay. Thank you. Thank you so much. Thank you very much. Thank you. The next question comes from Deepak Poddar from Safal Capital. Please go ahead. Hello. Yeah. Hi, Deepak. Please go ahead with your question. Hi. Thank you very much, sir, for the opportunity. I just wanted to understand one thing first. I mean, how many, what would be our figure for active clients? I mean, gross clients figure I got in the presentation of 3.19 million, right? What would be the number for active clients? Active clients, if you're talking about the customers who have traded in last one year, which is typically the one that industry says, is somewhere in the range of, I think, 1.5-1.6 million. One point five to one point six? Yeah. Okay. That has been declining, right? I mean, towards FY 2022 end, I think I remember that number was around 1.8. Yes. See, typically what happens is that, if you look at, the acquisition that we have done in last 2 years, and the acquisition that we have been doing in last, you know, last 2 to 3, there is a difference in terms of numbers. Typically what happens is that when your acquisition run rate changes, that has an impact on the active customer over a period of time, and that is what you see as a decline. Is that the reason basically because of which, I mean, our customer growth on the gross front is not translating into your revenue growth on a quarter-on-quarter basis, right? Last two quarters, our revenue has been declining 5% a quarter. I mean, yeah. Well, I don't think so, because if you look at the revenues are largely to do with the overall market sentiments and the way market is doing. You know, May, June, July, and some part of August was anyways bad for the industry, even if you look at the retail turnover at an exchange level in cash segment. That also fell down to almost like INR 8,000 crore-INR 2,000 crore from INR 35,000 crore that we were doing some time back. Overall, it was more of market sentiment. Now, when again market started going up, we are seeing volumes coming back. More than acquisition, it was more of a market sentiment. If you look at our revenues, even despite all this, our revenues in terms of broking revenue, brokerage revenue has improved in this quarter. It was only because of the market, our average funding book reduced. That is the reason there was an impact on the revenues and that, and the 4.5% drop in the revenues is because of that. But I don't see that is like reduction in the active clients and has an impact on our overall revenue. Understood. Fair enough. Understood. How do we see that going forward? I mean, going forward, how do we see the growth in terms of on a quarter-on-quarter basis? It won't be right for me to give a forward-looking statement in terms of revenue. Obviously, you know, maybe an active customer that you see may not be a right barometer for performance because what is important is how many of those customers are actually, you know, giving revenue. That is where I'm pretty optimistic that the kind of quality of customers that we are acquiring, we should be in a position to, you know, improve our revenues as well as profitability. Of course, you know, you all, we all understand that stock market is a cyclical business, and a large part of our revenues come from brokerage, and brokerage is dependent on how the overall market functions. If the market or the Nifty goes down by 10%, 15%, retail activity tends to slow down, and that has an impact on revenues. In a cyclical kind of a business, it is difficult to predict that how the quarters are going to be. The kind of effort that we are taking, I am confident that it will be in the right direction and it will help us improve our revenues and profitability. Sure. I understood. Yep. That's it from my side. All the very best, sir. Thank you. Thank you. Thank you. The next question comes from Sumit Chandak from Motilal Oswal. Please go ahead. Thank you for providing me the opportunity. The ADTO has increased quarter-over-quarter. Can you provide me the numbers for cash market share, derivative market share and brokerage split between cash and derivatives, and ratio of cash versus derivatives in brokerage? Sir, derivatives market share has improved, and now it is around 3.14%. Cash market has more or less been stable around, you know, 2.8%. That's the share part. Obviously, on the revenue side, derivatives contribute large number. I don't have the exact number right now, but maybe later I can share with you. Broadly, I know that derivatives' contribution in this quarter as a percent of total brokerage has gone up. I can share that number later with you. Okay. One more question. The customer acquisition cost has reduced in this quarter. Do you think that the payback period will also reduce, and moving forward? Yes, absolutely. The whole objective of reducing the cost is to improve the payback period. We're always in the range of around 8-10 months kind of a payback period. We're definitely looking at an improvement by, you know, 2-3 months from where we were earlier. Okay. Thank you. Thank you. Hello. Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We have a question from Karthikeyan VK from Suyash Advisors. Please go ahead. Sir, good afternoon. I'm sorry I missed your opening comments, so if this was discussed previously. Just one thing, you know, last quarter when we spoke, you talked about acquiring higher quality customers and that led to an increase in cost. This quarter there's been an impressive reduction in the acquisition cost. Should we assume that these numbers will sustain? Has there been a change in the way you acquire your customers? How should one think about that on a sequential basis? Last quarter, we were always in the range of around INR 760-INR 770 of acquisition cost. Last quarter was only, you know, and I said that because of certain changes that we were doing, that quarter. Yeah. was an increase, but we will reduce it, which we have done. Mm-hmm. I think now. Mm-hmm. We are fairly, as I also said in my opening remarks, that it will fairly be in this range. Now from here on we don't see much reduction in the cost, but we will be in the range of around INR 500-INR 600 of acquisition cost. That objective of, you know, reducing the cost more or less is now, you know, achieved. Okay. The run rate that you have in terms of new customer addition, should that be maintained or do you believe that this approach will give you a higher number? Some thoughts on that as well. You know, obviously it is difficult to comment on the exact acquisition number, but our plan is to spend on improving our brand and also organic and word of mouth, which are typically the sources of acquisition where you know you can get a higher number at the same also get the quality. Our objective would always be to improve our acquisition quarter-on-quarter, but not at the cost of sacrificing on quality. If till the time we are able to the CAC that we are, I mentioned as the payback that we're looking forward, we will definitely be you know interested in acquiring more customers. I see that, you know, it may happen, and it will happen where the acquisition also improves at the same time quality of Interesting. One last thing. You know, you talked about some tech investments that was expensed and therefore from this quarter onwards, due to that there was to be a reduction in that and therefore that will also lead to an improvement in profitability. How much of that is in the numbers, sir? I had said last time that all the tech investment that we were doing in, you know, Q3 and Q4 is now almost done. Now it is more of a steady state. Whatever that improvement was had come in last quarter. Now our tech cost is more or less, you know, stable. You won't see much of an increase in that cost. That was the point. This quarter it is the same as that. Okay. In terms of your, you know, OpEx, you know, what we see now is a reasonable reflection of the run rate, plus inflation of course. Yes. Okay. Yes. Thank you so much. Best wishes. Thank you. Thank you, guys. Thank you. The next question from Vishal Khandelwal, an individual investor. Please go ahead. Thank you. All my queries have been already asked. Thank you very much. Thank you. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. I repeat. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. We have a follow-up question from Deepak Poddar from Safal Capital. Please go ahead. Yeah, thank you, sir, for the follow-up. My question. Yes. Regarding subscription plan. What is the contribution of the subscription fee that we generated in Q2 to our total operating revenue? Subscription income is approximately INR 4.8 crore, which covers in the cross-sell. For H1? It is in the H1. It is more in the same range. Approximately 10%-10.9% growth is there, but otherwise it is in the same range. For the H1, you can say that it's INR 9.5 crore. INR 9.5 crore. Out of our total client base, what is the percentage of clients who are under subscription plan? See, subscription plan typically are, you know, taken by traders because that's where they get the real benefit of this plan. Broadly, around, you know, 40, around the range of around 30-40 thousand customers take our subscription plans. Last question on this. Of the total operating revenue for, let's say for H1, what would be the contribution of the subscription customers? Any ballpark figure, if you have? Sorry, can you repeat the question? If you take an operating revenue for H one of these, what would be the contribution by the subscription customers? Contribution in what? In brokerage or in the subscription? No, no. Total, total operating revenue. What is the brokerage? That's, as you know, as Gourav mentioned, we are in the range of around INR 9.5-10 crores kind of a revenue for H1. Okay. The total revenue is around, you know, INR 164 crores. That's broadly 6%-7%. That's the contribution. That was the subscription fee. I mean, what I meant to ask is, these 40,000 customers, how much contribution of, from these customers is towards your broking revenue? I won't have that information right now. Okay. Thank you so much. Thank you very much. Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. I repeat. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. I repeat. Ladies and gentlemen, if you have any questions, please press star and one on the telephone keypad. That will be the last question for the day. Now I hand over the floor to the management for closing comments. Thank you very much everyone for joining the call. I hope we were able to answer your questions. If there is any question that you have, you know, can write it to us at ir@5paisa.com, and we would be more than happy to answer your questions. Thank you very much, and wishing you and your family a very happy Diwali and a prosperous New Year in advance. Hope you all have a great Diwali and a great. Thank you. Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Chorus Call Conference Call Service. You may disconnect your lines now. Thank you, and have a pleasant evening.