Good afternoon, ladies and gentlemen. I'm Palshia, moderator for the conference call. Welcome to 5paisa Capital Limited Q2 FY 2025 earnings conference call. We have with us today Mr. Gourav Munjal, Whole-time Director and CFO, Mr. Ameya Agnihotri, Whole-time Director and CTO, and Mr. Mehul Jain, product head from 5paisa Capital Limited. As a reminder, all participants will be in the 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 the operator by pressing star and then zero on your touchtone telephone. Please note, this conference is recorded. I would now like to hand over the floor to the management. Thank you, and over to you, sir. Hello, everyone. Good afternoon, and welcome to our Q2 FY 2025 earnings call. On this call, I'm joined with Mr. Ameya Agnihotri, whole time director and CTO, and Mr. Mehul Jain, our product head. Quarter two FY 2025 has been an excellent quarter for the investors as well as for the broking industry. During this quarter, both indices, Nifty and Sensex, touched all-time high and has given the opportunity for good profit booking to the investors. Also, the overall industry saw a significant addition of more than thirteen million Demat accounts. The total Demat accounts of this country stood at seventeen point five four crore as on thirtieth September. In Q2 FY 2025, we have acquired one point six two lakh customers, reflecting 20% growth Y on Y, and our total customer base has reached to forty-six point two eight lakhs. This drop in acquisition is a result of our conscious goal that we took from last quarter to improve the quality of customers, which are acquiring, which we are acquiring, and ultimately improvement in first year revenue, payback period, and LTV, which is called lifetime value of customers. During this quarter, our ADTO, which stands to average daily turnover, grew to 3.78 trillion, a growth of 4% Y on Y. Our client funding book stood at INR 245 crore, down by nine point nine percent Y on Y, and our mutual fund AUM reaches to 1,333 crore, almost 100% growth Y on Y. Coming to financial performance, in Q2 FY 2025, our broking revenue has grown to 41 crore, a growth of 3% Y on Y. Other income is INR 27 crore, a bit down by 2%, but majorly because of minor drop in client funding book, and our total revenue stood at INR 100.1 crore, a growth of 4% Y on Y. In this quarter, as you can see, our employee benefit expense are showing increase by 49%. This is because in last quarter, this includes a one-time positive impact of rupees 8.6 crore with respect to unvested ESOPs and RSU as per Ind AS 102, and now it is showing our normal costs, which includes increment of employees, RSU costs, as well as annual variable performance incentives. With a focused approach on quality customer acquisition, product improvement and cost optimization, we are happy to report that we have achieved lifetime highest ever PAT of INR 21.9 crore, which is a growth of 15% Y on Y, along with achieving higher PAT margins of 22%. Regarding some regulatory updates, SEBI continued to work towards strengthening the corporate governance practice of stockbrokers and exchanges and protecting the interest of retail investors. Towards the same step, two major changes have been announced. First is, with effect from first October, brokers can't charge transaction charges from customers more than exchange-defined charges, which are single rate now and not on slab-based system. Second, some changes have been announced related to index derivatives effective from twentieth November two thousand twenty-four, like increase in contract size, limiting weekly expiry contracts, and collecting additional margins on expiry date. We believe that both these changes will give more transparency and safety to investors and further increase the confidence in market. At last, I want to ensure investors that we will continue to work towards product development, better technology infrastructure, customer experience, compliance-first approach, and cost optimization. I am confident that these all efforts will accelerate our revenue and profitability in coming quarters. Now, Mr. Ameya Agnihotri, our CTO, will take you through our technology and product key initiatives, and after that, we will be happy to answer your own queries and questions. Ameya, over to you. Hi, everyone. I'm Ameya Agnihotri, CTO and whole-time director of 5paisa Capital Limited. Digital innovation and technology-first approach has always been our focus area. In our pursuit to provide best-in-class product experience to our users, we have made significant progress. We have launched new web trading platform with user-friendly, intuitive, and rich user UI/UX. The revamp focuses on reducing latencies in ensuring smooth performance and unifying 5paisa experience all across. We migrated our OpenAPI gateway to Kong, reducing our latency by over fifty milliseconds. Flutter app with new user experience is fully rolled out for all our iOS users. Additionally, FNO 360 is now available on iOS for all our users. FNO 360 dashboard offers real-time market insights, advanced trading tools, and easy access to derivative data via streamlined interface in the dashboard or in market section.... Advanced order forms on iOS consolidates order tools on a single screen, displays charts, orders, positions, and market depth. Supports SL, CO, BO search and VTT order types as well. We have added VTT OCO support. This allows placing stop loss and target orders simultaneously, valid for up to a year. When one is triggered, the other automatically gets canceled out for seamless trade management. The Trade on Charts platform now includes an option chain, offering real-time options data, Greeks, OI, and volume, allowing traders to analyze and trade options seamlessly within the same interface. Additionally, the platform provides corporate action information, detailing events like dividend, stock buys, and bonuses, helping traders assess their impact on the stock prices. Flutter on Android platform, including FNO 360 on Android, will be rolled out to all our users this month. In Q3, we intend to enhance user experience for key workflows, add exciting new features in FNO 360 and mutual fund sections, and optimize latencies on our backend APIs. With summary of our performance as explained by Gaurav and me, I open the floor for further discussion. Please feel free to ask questions if you have any. Operator, you may proceed. Thank you, sir. 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 questions, please press star and one on your telephone keypad. First question comes from Dhaval Gada from DSP. Please go ahead. Hello? I repeat. Question comes from Dhaval Gada from DSP. Please go ahead. Yeah, hello. Am I audible? Yes, you are audible. Yes, Daval. Okay. Yeah, thanks. Just a few questions. First is on the product upgrade. So last quarter you mentioned that there will be a big upgrade that will happen at the end of the second quarter. So just wanted to get an update. So are the changes that you mentioned in the initial remarks, are these all been done and the new product is out, or is some major part still pending? So that's the first question. Yeah. So, Flutter app with revamped user experience has been completely rolled out to all our iOS users. So that is one big upgrade. Apart from that, FNO 360 was initially available on web. It is now available on iOS completely for all our users. In terms of Android, rollout of revamped app on Flutter platform, as well as FNO 360 on Android, it will be rolled out by end of this month. Over and above that, obviously, we have launched a revamped new web trading platform which focuses on the rich user UI and UX. So even that has been rolled out to all our users. So overall, we believe that major changes and user experience and usability improvements as well as performance improvements have been rolled out in last quarter as committed. You said that the FNO 360 for iOS, sorry, for Android, will happen by end of this month- Yes. and so that will complete all the. All the... migration or upgrades, that you've committed. Yeah. Post this, if you could just talk a little bit around the product upgrade pipeline, anything major, or these are gonna be incremental changes from here on? Just if you could give some thoughts on the pipeline for the next 6-8 months. So with respect to our product or user experience updates, I think the key work that we are going to do is to enhance our user experience workflows. So these are going to be incremental changes in order to make sure that whenever user interacts with our application, it has least cognitive load and the quickest way to achieve certain tasks and abilities. So lot of incremental changes will be obviously done on our web as well as on our mobile interfaces. Over and above that, in terms of our backend, we are planning. We have an extensive plan to ensure that our latencies, performance, and availability is significantly improved. The overall objective in next few months is to make sure that these optimizations in our backend API contribute towards improvement of performance and overall experience on our app as well as web platform. ...Understood. Just the second part on the acquisitions, customer acquisitions. So, you know, if I just take a sort of commentary journey of how we thought about at the start of this calendar year, we were trying to you know use the resources wisely to improve the incremental customer acquisition. And, you know, some kitty was sort of, or the aggression was supposed to come after these product launches are through, so that the load is taken well care of et cetera. Given that now last two quarters sequentially we are seeing the run rate, you know, decline and from here on, how do you see the overall customer acquisition growth to be for, let's say, the next three to six quarters? If you could give some perspective, that would be useful. Yeah. Actually, this step is towards, you know, in respect of to acquire quality customers. Although there is a 17 crore Demat account in the country, but most of the customers have a balance of less than INR 10,000 only. In this kind of a market, you should play very cautiously, that whatever the expenditure which you are doing in terms of advertisement and branding, should attract more traders and investors who are relevant to our industry and not, you know, just for the sake of numbers. This number is reduced only in respect of that category, but I can assure you that overall FIR, which is called first year revenue, has been improved. So with this reduction, there will be no impact on revenue. Going forward, yes, definitely we will from now onwards, we will accelerate our, you know, growth in terms of customer acquisition. We are hopeful and we will try our best to increase our customer acquisition quarter on quarter for the next three or four quarters. Would it be fair to assume that, with these upgrades, the investment that you've made, the run rate right now, we are doing roughly about 1.6 lakh per quarter, and at the peak in the fourth quarter, we did about 2.7 lakh in the fourth quarter of 2024. We should exceed that in the next two, three, four quarters, or, you know, the run rate is gonna be somewhere between these two numbers? I mean, how should one think about your, your acquisition run rate for the next, let's say, four quarters? To be honest, I can't give exact numbers to you, as you mentioned, but I can give the direction to the company that yes, we want to acquire more customers, and these all changes is we are expecting that our organic growth will also increase due to all these changes. And we will continue to spend on our marketing and advertising also, so that we can acquire more and more customers. But numbers-wise, I can't give exact numbers to you. Okay. Got it. And just final two things. In terms of the regulatory changes that are out there, what's the sort of financial impact, if you could quantify whatever is in your view a basic assessment at this point of time? And specifically on the you know weekly options expiry related impact, how are you sort of looking at you know navigating that? If you could just talk a little bit around regulatory impact and how the company is looking to navigate. Yeah. So the first change is related to, you know, broker can't charge more transaction charges income from customers. So this will impact on the industry level, 10%. For 5paisa, it was 8% of income, of total income. But, we internally, we do have a lot of levers, and we already took action towards the same. In the industry, we were charging INR 12.5 DP charges. Now we have increased to INR 20. In industry, we had the product of subscription on which we charge INR 10 per order instead of 20. We have abolished that product because 10 rupees somehow it's not, you know, feasible for us. So that will compensate our, you know, TOT income. Second change is coming from twentieth November, which is, you know, that weekly expiry and increase in contract size. Actually, we have seen in past that when exchange started, you know, to collect 100% margin two, three years back, there were many expectations at that time that volumes may drop, but actually, that didn't happen. Volume has gone up to 3X in last two years. We need to wait and watch after twentieth November and see investor behavior, whether it is shifting to, you know, Nifty and Sensex, or whether it will discontinue. We need to review the situation after twentieth November, although the industry perception is that there can be a slightly drop in revenue in this regard. We'll look at pricing post the initial assessment of the impact to offset whatever loss in volumes, if any? I mean, how are we thinking about it? We will review the situation after twentieth November. Also, we need to check industry participant actions, competitor actions, what they are doing, and after that, we can strategize. If everyone is increasing the price and there is a major drop in volume, then we can also go for the increase in price or take any other action also. Got it. Just last question, in terms of the OpEx. So could you just give a direction around. So this is more like a normalized quarter in some sense. From here on, how should the OpEx sort of move, both in terms of your acquisition thought process, as well as you know, other investments that you intend to make in people, et cetera, back end, middle and back end infrastructure. So just how should one think about OpEx growth? Yeah, so our total cost is INR 71 crore. I must say that most of the cost has been optimized and normalized. I don't see any incremental increase in the same, but yes, I see increase if we acquiring more customers. So if we see the opportunity and got the 1 lakh customer per month and achieve 3 lakhs, then definitely there will be a increase in advertisement expenditure. But apart from that, I don't see any material increase in coming quarters. So, this 71 crore should grow at what? Like, 15-20%, and then the rest is dependent on acquisition run rate. Is that the way we should model or? Yes, yes, yes, yes. Absolutely right. Okay. Got it. Thanks. I'll come back. Thank you. Yeah, sure. Thank you. Next question comes from Shayan Jain from Electrum Capital. Please go ahead. Hi, good afternoon. Most of my questions have been answered already. I just want to know what is your strategy regarding your MTF book, because that has declined a lot in the past two quarters. So how are you planning to improve it? And do you have some internal targets? And what is the interest you charge on your MTF book? Yeah. Okay. So regarding MTF, what is happening in the industry, many new players have come, and they are, you know, re-charging very reduced rate, and paying from their own pocket. Many players who is giving, you know, 7-8%, when there is a cost of fund is 11%, they are paying from their pocket. And yes, you are right, we... It has impacted to us, and our book has slightly goes down. But we have done many improvements towards the same. First, we are doing some changes in our app related to the MTF section, so that, you know, customer can view and check easily. Second, we have already increased the limit to four X. Earlier it was two X, or one X. We have changed the limit to four X. Third, we are, you know, sending a digital message to on the basis of cohort. I mean, the customers who can avail and there are more charges to, he can avail, then we are sending a digital message. And lastly, we have also reduced our rate from first November. Earlier, we used to charge based on network, and our average return was 19%-20%. But now we have standardized to only a single rate, which is 16.42 per annum, but usually we charge on a day basis, which comes around 0.045%. With all these efforts, we are confident that, you know, our book size will increase in future. Do you have some targets for the next, let's say, two to six quarters, like by FY 2025 and then FY 2026 end? The target is definitely, yes. We wanted to go two X, three X, and we are doing all the actions toward the same, but again, I can't give the numbers. But yes, target is there. No worries. Thank you. Thank you so much. Thank you. Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. Next question comes from Alia, from Motilal Oswal. Please go ahead. Yeah, hello. Am I audible? Hello. Yes, ma'am. Yeah, I just want to know what is your current cash and market share? There's a lot of noise. What is your question? I wanted to know what is your current cash and market share? Our market share is in between 2%-2.5% for both cash segment as well as F&O segment. Okay. So like, as compared to your previous quarter, the market share percentages the same. So any plans or any strategies you are going to apply so that you can increase the market share? Yes. The main thing is to acquire quality customers who can contribute to our ADTO and acquire more and more customers. This is our strategy, and we are working towards the same to increase our market share. Okay. Thank you. Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We have a follow-up question from Dhaval Gada from DSP. Please go ahead. Yeah, just a couple of follow-ups. First is on the CAC. What's the run rate right now? I mean, in terms of per user, et cetera, how the numbers are shaping up? And any sort of benefit of the MarTech implementation that was talked about a couple of quarters back. Just if you could talk a little bit around how the CAC has moved in the last two, three quarters. Thank you. Oh, CAC, there is an improvement has been made in CAC. There is a 12-13% reduction in CAC. It is in the range of INR 650-INR 750, as of now. And yes, that MarTech and all these efforts, you know, helps us to increase our organic acquisition. In 1.62 lakh customers, which we have acquired, the mix of organic is more comparative to previous quarters, and or more organic means more FIR, which ultimately gives you proper and healthy payback period of 6-7 months. Is there any further scope of improvement, or this is very well optimized, as you see it, based on the target segment that you are trying to acquire? ... If I go in detail and check proper mix, there is a scope, but not more than 10%-12% as of now. Understood. And the other bit is on the CEO search. Any sort of update or any thought process and how is the involvement of Narayan, if there is any? Yeah. Narayan sir is not involved in 5paisa day-to-day operation, as we already informed, and we will update, you know, all investors through our exchange filing and announcement as soon as possible. Understood. And on the market share target, so that will be formed up post the new CEO being finalized? Or like, is there a plan? Earlier we used to have that 6% market share target. Any sort of thoughts on that? Actually, every CXO is working towards the same target, which, you know, given to us, and there is no change in our target strategy. Rather, we are improving every day. Yes, with the new CEO, there will be a new major changes will be done, but, as of now, every target is same, and we are trying to achieve the same. Got it. Thank you. Thank you. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We have a follow-up question from Shayan Jain from Electrum Capital. Please go ahead. Yeah, hi, sir. I think a few quarters ago, sometime back, you mentioned that your first year revenue from customers is around INR 75 or something around that line. I can't remember exactly. But can you provide an update on how that has changed, or what that look like, some update? As for strategy, I can't disclose the exact number, but I can tell you that there is an increase in first year revenue, because we have, you know, moving towards the quality customer acquisition, and it is as per industry. It is not less than that, not more than that. It is as per industry. And for the industry, I guess the range for the FYIR is thirteen hundred to seventeen hundred, and we are into the same range. Okay, got it. Thank you. 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. We will wait for a moment while the question queue assembles. Thank you. There are no further questions. Now, I hand over the floor to management for closing comments. Yeah. Thank you for joining us on the call today. I hope we have been able to answer all your queries. If you have any further query or need any assistance, please feel free to get in touch and mail us at ir@5paisa.com. Bye, and Happy Diwali to all of you. Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using DoorSabha's Conference Call Service. You may disconnect your lines now. Thank you, and have a good day.