Ladies and gentlemen, good day and welcome to the Angel One Limited Q3 FY23 earnings conference call. As a reminder, all participant lines 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 an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Hetal Gada. Thank you and over to you, sir. Good morning and welcome, everyone. Thank Thank you for joining us today to discuss Angel One's Q3 FY 23 financial and business performance. The recording of today's earnings call and the transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation and the press release are also available on our website. For today's call, Angel is represented by Mr. Dinesh Thakkar, Chairman, Managing Director. Narayan Gangadhar, CEO. Vineet Agrawal, CFO. We also have the senior leadership team of Angel, along with HGR, IR consultants. We will give you a brief overview of the operational and the financial performance for the quarter gone by, and the floor will be open for Q&A thereafter. As a reminder, I would like to inform you that the company does not provide any operational and financial guidance. There may be some forward-looking statements during the call, which must be viewed in aggregate with the risks that the company faces. With the brief introduction, I now invite Narayan Gangadhar for his opening remarks. Thank you. Yeah. Thank you, Hitul. Good morning, guys. Good morning, everybody. First, I would like to wish everybody on the call a very happy and prosperous new year. In 2022, India outperformed global markets by approximately 37%, which reflects government economic measures to facilitate business. Even the World Bank, in its recently released report, suggested that India is expected to be amongst the fastest-growing economies and expects India's monetary and fiscal tightening to be less pronounced. All of this will drive India's growth of capital markets, which has more than 108 million demat accounts as of December 2022. India's young demography strongly favors technology assimilation. Angel is well-positioned to cater to this population through our digital products and engagement tools. In Q3, we rolled out the Android version of our super app to the first batch of our clients. With this, the app is now available on all platforms: iOS, web and Android. The super app builds the bridge for us to become long-term collaborators for our clients in their journey of wealth creation. Since Android is a large base for us, we are being very scientific in this rollout. To give you some color on scale in terms of daily logins, with only 15% rollout in December 2022, Android is 1.2 times that of iOS in scale. I'm very happy to share that this transition has been steadily gaining acceptance with our clients. The customer council, which was formed in Q2 of FY23, proactively assessed client experience and received feedback post the Android rollout, which were incorporated into the app. We recently green lighted the proposal to scale out the launch and deployment to the entire population. Let me give you some feelers about the initial feedback of our Android Super App. The app has been architected to handle planet scale, and I'm pleased to share that the app functioned extremely well when the floodgates were opened and large volumes of orders were seen in Q3. The app recorded an uptime of around 100%. Typically, there could have been some softness when such migration happens, but we have not seen any. Orders per client for those migrated to the Super App versus their vis-a-vis their activity on older apps continues to hold up. The Play Store rating of 4.2 as of December reflects the high level of acceptance by our clients. Early trends in overall NPS demonstrate superior client experience and higher satisfaction as compared to the old app. We also focused on incorporating changes to adhere to various compliances, like implementing two-factor authentication, which offers an incremental layer of security to all our clients, and making changes to display trade and charges upfront. We successfully completed the second round of clients' funding payouts without any impact to our business. We built KYC 2.2 experience for our web mobile clients from scratch. In Q3, we also introduced mutual fund services on all 3 platforms of our super app, thus making the transition of the app to become a true super app. Efforts were taken in Q2 to revamp our website are paying off as well, as witnessed by high web traffic in Q3 FY23. On the tech side, we continue with our regularization efforts. We rewrote multiple backend APIs. We removed various interdependencies and hardened our systems. We deployed engineering excellence patterns by automating our processes and various tools. We also deployed new machine learning algorithms to improve the effectiveness of our online campaigns. Our focus on data science, artificial intelligence and machine learning is yielding positive results across acquisition, onboarding, engagement and communication. We continue to acquire close to 1 million clients even in a tough market, thus taking our overall client base to 12.5%. More than 95% of the clients were acquired from tier two, tier three, and beyond. With this, our share in India's total demat accounts expanded to 11.6% as of December 2022. Angel has been amongst the few players to consistently maintain a positive trajectory in active client base. We have improved our market share to a record high of 12% as of December 2022. I am extremely happy to share that we also have now attained the third position amongst all brokers in NSE active clients. The robustness of our business and superior client fabric is demonstrated from our turnover market share, which stood at 21%. Our clients transacted an average of more than INR 14 trillion daily through 226 million cumulative orders in Q3 FY 2023. December was our second-best month in terms of average daily orders and best in terms of average daily turnover. I'm happy to share that the board of directors have approved the distribution of 35% of post-tax profits as the third interim dividend to our shareholders. With this, I now request Mr. Vineet Agarwal, our CFO, to brief you on the financial performance of the company. Over to you, Vineet. Thank you. Thank you, Naren. Good morning, everyone. I'm pleased to share with you that we have yet again reported strong operating and financial performance despite a challenging environment. In quarter three of financial year 2023, we reported our highest quarterly profit of INR 2.28 billion. Our gross revenues grew nearly 2% sequentially to INR 7.6 billion, despite two lesser trading days during the quarter. Gross booking income continues to remain the mainstay revenue driver at INR 5.1 billion, contributing 67% to our gross revenues. Interest income, which includes interest on our client funding book and interest earned from deposits with exchanges, grew 10% sequentially to nearly INR 1.4 billion, contributing 18% to our gross revenues. Better yields on deposits helped augment this income stream. Ancillary transaction income de-grew by nearly 4% sequentially to INR 6.627 million, accounting for over 8% of our gross revenues. Depositary income contributed about 4% to our gross revenues at INR 2.270 million. Income from distribution of third-party products grew nearly 17% sequentially due to uptick in IPO offerings accounting for 1% of our gross revenues. During the quarter, we have reported a one-time capital gain of approximately INR 90 million arising out of the sale of an unused office property. This forms a part of our other income. Our quarter three, financial year 2023 gross broking revenue is further split as follows: Share of F&O segment remained stable at 82%. Contribution of cash segment came down marginally to 12%. Share of commodity segment grew to 5%, and share of currency segment remained flat at 1%. The average revenue per client, which is calculated on the entire quarter-ending client base, stood at INR 398. This trended lower primarily due to a higher share of new-to-market clients. These clients initially have a subdued activity level, which normalizes over time. Despite this, we have been able to maintain our growth and profitability metrics. On a cohort basis, we have seen revenue per client mature as they progress into year two and onwards on our platform now, in contrast to our pre-digital model, where year two revenue per client was significantly lower than year one. Since we have been acquiring clients at a robust pace over the last two years, their share in net broking revenue continued to dominate at 66% in quarter three of FY 2023. Here, I wish to draw your attention to the fact that some of our older clients are now moving into the next aging bucket of 2-5 years. As a result, we are witnessing an increase in our net broking revenue from this cohort, thus indicating longevity and stickiness of clients corresponding to their activity levels. Our net broking revenue under the flat fee plan continued to witness strong momentum, contributing to a significant 86% of our overall net broking revenue. Share of total net income from our flat fee clients to the consolidated total net income grew 1.3 times to 86% in quarter three from 67% in quarter three of FY 2021. Quarter three FY 2023, our overall OpEx, net of fees and commission payout and finance costs, was lower by about 0.4% quarter-on-quarter. The profit margin for the quarter expanded sequentially to 53.9%. While we have consistently delivered healthy operating profit margin, we believe a more sustainable margin profile for our business is in the range of 45%-50%. With the launch of the Android version of our Super App, we plan to spend more on its promotion for the next few quarters. Depreciation of assets for the quarter was marginally higher at INR 80 million on account of capitalization of certain assets. Our consolidated earnings per share for the quarter was INR 27.4. At INR 800 million, this is the highest absolute dividend payout by the company in any quarter, taking the total dividend across 3 interims for FY 2023 at almost 97% of the total dividend payout for FY 2022. On the balance sheet side, cash and cash equivalent increased to over INR 62 billion. The period-ending client funding book was at about INR 13.8 billion. Our period-end borrowing were INR 15 billion. These were utilized towards financing our client funding book margins with exchanges to fulfill the 50% cash margin requirement on behalf of the clients. Our investment in the Super App and commissioning of new data center led to an increase in our fixed assets to INR 2.3 billion as of December 2022. Our net worth increased to over INR 20.6 billion as of December 2022. The nine-month FY 2023 annualized return on equity stood at 45.6%. With this, I conclude the presentation and open the floor for further discussion. Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Swarupananda Mukherjee from B&K Securities. Please go ahead. Thank you. Good morning, sirs, and thanks for the opportunity. I have 3 questions. The first one is, wanted your comments on the interest income part. The number has come higher sequentially. If you could split out, if split this out between the interest you have earned on the margin funding book and that on the deposit held with exchange and provide comments on how your, you know, the rate may be done, the MTF book, has it moved, or have you passed on any kind of, you know, borrowing cost increases to your customer? Also comment on the NIM of this part of the business. That would be my first question. Yeah. Vineet, can you please take this? Hi, Swarnab. Good morning. The reason for the increase is twofold. One, the yields have increased by about 50 or 55 basis points, and the overall quantum has increased by about INR 560-odd crores. That's the reason why we've seen the increase in the interest income. The yields on the client funding book remain same at about 18% per annum, and the NIM is also similar to what it was in the past, at about 8, 9% annual. Just to clarify, sir, when you say that the yields have increased by 50-55 basis points, since you are saying that MTF. It's on the deposit side. Okay. Okay. What would be the quantum of the deposits that you hold with the exchange in Q3? It varies. On an average, it would be about INR 4,500 crores. Okay. Okay. Okay. That's helpful, sir. Secondly, on the number of orders, I understand that this quarter we were missing I think 2 trading days. Apart from that, also if we factor that in, I think, given generally the run rate of orders that you have per day, I think, you would not have done any significantly higher than what you would have done last quarter, even if there were 2 more additional days. Wanted to know your thoughts on what is the experience you are seeing on this side? Are the orders now coming with higher number of lots? Because your ADTO is increasing. What are the steps you are taking to increase the number of orders? I think that is the primary revenue rather than the ADTO part. Wanted to know your thoughts on this. Yeah. see, first of all, as we announced in the results, right? We are, we are at a point where there is a lot of. There are two trends that are going on. First is there is a macro trend, and the macro trend of softer markets are already visible in many sectors as well as many of our own competitors also. We are seeing the same kind of trend line as far as market softness is concerned. Secondly, what has happened is, in terms of lot size or anything, we have not seen any change. That has not budged. In terms of people trying to trade and people's activation levels, they are slowly changing as more and more people try to test the water. With rising interest rates, there is obviously a little bit of slowdown in terms of the natural propensity to enter into the equity markets. That said, I believe the fundamentals of the business are holding on pretty strong, which is business already in terms of order count. Hopefully that answers your question. In terms specifically on ADTO, there has been no or lot size, there has been no visible change. There are other changes coming to the product, which will influence how our customers experience the broking journey, how do they experience mutual fund journeys and such, which will impact the overall order count going forward. Sure, sir. Thanks for that response. What I was trying to understand was that if we were to focus on the revenue growth side, then from your comment side, there's a sense that, you know, it could be a possibility that given the softness in the overall macro picture, we have kind of come closer to a peak for the broking business. I just wanted to understand and because of the fact that the mutual funds side you will be doing a direct kind of a business. What would be your focus area for the revenue growth, since broking might peak for the time being, might seeming a little bit scary? No. No, I didn't say broking was peak. All I'm saying is that in this particular quarter there has been softness. Okay? Broking market, we are at least another decade from its even starting to peak, right? I expect the next decade to 2 decades to be a serious bull run for the economy as well as a serious bull run for also all the players and especially digital players in the business. The long-term future prospects remain extremely strong. However, what has happened is given how the dollar has fluctuated in last 3 months, it has gone up and down almost by 10% or 15% just within the last 2 months, you know, just within the last quarter itself, right? While our country, while we have stayed largely insulated, there are still peer pressures in terms of how the banking system has responded. Obviously, with interest rates rising, people have a natural tendency in such markets to go look to adjusting their risk profile, you know. Naturally, more than people, if you look at the number of FDs that were opened this quarter, it's also at all-time high. Okay? Naturally, there is an inverse correlation there. What we see is we see this trend stabilizing. We see this to be a, you know, a trend which will, you know, which will kind of stabilize out as we especially enter into the budget season, which is coming up in the next month or so. That, again, we expect the markets to revert, you know, to revert back to their mean state. Overall from a from a macro point of view, I think there is no agito, magnito, at least I don't see any slowdown coming. That said, I think the dampness will be there for a few for a month or for a quarter till the uncertainty settles down. That's what I would say. As far as mutual fund is concerned, you made a statement that we are gonna go with direct, right? That is absolutely correct. Our entire strategy actually is basically with the super app, we want to give our customers this diversification to enter and consume new financial products, which today obviously we are not providing. We expect that with that, the overall stickiness on the app to go up and the overall trade propensity also to go up. Okay. Okay. Got it, sir. Very helpful. Last couple of questions. Quick one, sir. One would be, whether we should see any kind of impact on your financials due to the T+1 settlement. That's 1. If I could get your comments on how we could see the employee benefits expense, whether it has now come to a peak level and why a slightly lower tax rate... I couldn't understand your question. I was not able to hear. It's cracking up. Can you repeat just the first, the third question, and then we'll answer the fourth separately? Just the third. What was your third question? one was impact of T+1 on your financial. The second was employee benefits expense, whether it has, you know, we have done INR 990 crores. Should we consider this to be somewhat closer to the peak, or should we expect even some more inflation there going ahead? Thirdly, tax rate is slightly lower this quarter, sequentially. Any reason for that and how we should expect it. Okay. You've answered... You've asked three questions in that one question. Let me just go one by one. Okay. First is, let's start with T+1. Okay. T+1 actually I would like, you know, Varun, can you take this call on T+1? What impact have you seen from the ops side? Sure. Sure, Naren. Good morning, Mr. Mukherjee. T plus one is gonna be very beneficial for the customers overall paying payout cycle. Marginally we would see a drop in the margins which Exchange collects on the cash market segment. Today, F&O is already on T plus one. Cash market was T plus two, and that is where two days of margin used to get blocked, which would get released even for the customer as well as for the brokers. That would have a little benefit on our overall deposits that we keep with the exchange. As far as customer is concerned, T+1 actually becomes very beneficial because every settlement happens on the next day itself, so that they can take a rational call in terms of in case if they want to sell it in the short term, they would be able to do it. It is gonna have a very positive impact overall. Yeah. Yeah. Thank you, Varun. The next question. Just to actually add to that, from the product and tech side, this actually is a great win for the customers because it also lets us introduce some interesting journeys which, you know, historically we were not able to do, you know. Because the fact that the processing time has shrunk, it opens up other opportunities for us to improve the experience. It's a great thing for everyone. Your second question was around taxation, the tax rate. Vinit, just can you quickly take that? Then I'll answer about the employee cost. Go ahead, Vinit. The headline tax rate remains same at about 25% or so. Slight variation due to the impact of deferred tax calculations, overall it's in the same range at about 25% for the group. Your final question on employee costs. See, I think the costs are already there. You've already seen the costs for this quarter. You asked a broader question. The broader answer is, see, like, we are currently in the growth phase of our business. For Angel, this is just day zero. We're just getting started. You know, we just went public 2 years back, I would say we are a hyper-growth company. For the next few years, we are going to continue investing in our people, we are going to continue investing in our hardware, we are going to continue investing in our process. That is going to result in extra spend. We have always said our goal is to operate the business in the 45%-50% ballpark of the operating You know, we want to keep our OPMs at that rate. So far, we have been successful in keeping it. If you look at the record over the last two years, in fact, we have done an excellent job. It's been, in fact, this quarter it's sitting at an all-time high of 50-plus or 54 actually, right? Our goal is to operate between 45 and 50, and that's the envelope we should be looking at, you know? Yeah. Got that sense. All this is very helpful. Thank you, everyone, for patiently answering the questions. Thank you so much. All the best. Thank you. The next question is from the line of Sahil Mittal from HDFC Securities. Please go ahead. Hi, morning. Am I audible? Yes, you are. Yes, Mr. Mittal. You're audible. Hi, morning, everyone. Thanks for the opportunity. Firstly, just 1 clarification on the customer payback period. I'm referring to cost payback period. Is it still building up at 6 months? Yes. Yes. Our customer payback period is building up at that in the 6-month range that you have mentioned. Yes. Right. If that is the case, then the customer drop-off rate seems to be very high because the new customers acquired are turning active at most in the next six months of acquiring them. But the increase in your NAC active clients seems to be indicating that the old customers, that the drop-off rates for the old customers, remain very high. So can you give some comments around that, maybe around... Yeah, so that's our first question. Yeah. No. I've I don't think that's the. Your data is correct, but the conclusion is not something I'd be agreeable. Let's go one by one. Okay? First thing is that you remember this year when we report the data on ARPU and everything, it's average data. Okay? It's average over all our cohorts which we have acquired to date. We have had a couple of events through the year which were outlier events. All of us, we went out, we went out of the gate guns during LIC IPO. During that period, we acquired a lot of customers. That base which was acquired during that period, obviously that base hasn't performed as we would have liked because, ICICI was a damper and, you know, post that there was really the country never really even recovered from the aftershock of that. What we are seeing is as we continue to scale our acquisition strategy, you know, we continue to focus on those tier two, tier three customers, and there we don't see a change in the activation rate at all. In fact, we are still activating close to 50% of our customers within the first 15 days. I would like Prabhat to add a few words here in terms of the acquisition side, and I'll switch over to Devender who will answer your question about the how the guys are performing in terms of cohorts. PP, you wanna take over? Yeah. Maybe I'll just add something to this. Maybe, you know, keep aside the addition which you did in the last 12 months, but if you can also talk about the customers which you acquired prior to last 12 months, so more than 1 year, but less than 2 years. How is that customer doing what? For example. But- 10 orders in a quarter, then what's the trading intensity now? There'll be seasoning. There's some seasoning on this. Yeah, okay, good. Okay. That is not the thing you asked in the first place, okay. You know, different question. No problem. I'll answer that. Okay? See, this, your question around how the cohorts are doing, I'm gonna hand over to Devender to answer in a few minutes here. Overall, what has changed, and this is very important for all of us to understand, is we were operating this business with a lens of breaking even six months, seven months, whatever it is. Okay? Fundamentally, we never really had a lens on lifetime value. Okay? Whereas now the company has had more than four years, three to four years of operational data of running in a discount broking, fully digital environment. Do you agree? We have never operated in this model before that. Only last 3, 4 years we have operated in this model. We have a lot of data now which shows that the cohort behavior and the revenue from 1 year to the next is only increasing. I will now hand it over to Devender, because we are trying to shift our acquisition strategy to go from a 3-month, 6-month breakeven horizon to a lifetime view. We'll be talking more about this in the call. I want Devender now to jump in here and give you some data on how the trend line looks like as far as cohorts are concerned. Yeah. Devender. Hi, Mr. Mittal. I think just to re-incorporate, you know, what Narayana shared across is, when we look at clients, I think the growth, the pocket Our focus has remained laser focused on reaching these places so that now we become part of this growth that is going across. We have kept the guardrail of, you know, maintaining the profitability around six months. That is what has happened. As Narayan mentioned, during the IPO month, we went all guns blazing, and we acquired a lot of clients who wanted to do LIC IPO. That particular cohort has not performed, you know, similar to other quarters, but that's a, that's an aberration. Coming to the second question, how is the 12-month-old client really performing? Our data is saying now since we have data of, you know, clients acquired in at least last three years with a discount broking model, we are able to see that the second year revenue for the clients who have been second year is almost similar, a little higher, in comparison the first year revenue of the client. We are seeing stability of revenue of the client as they move to second year, third year and fourth year. We are seeing a similar trend from second year to third year. These are clients got acquired during the COVID period. That's why we're not talking about it. We are clearly able to see that the behavior of a client is actually stabilizing from first year onwards. To answer your question on last 12 months onwards, the behavior of revenue is actually very stable and very encouraging. That's the second part. On the third part of the question where you know, asked about the activation side of things. I think at an overall level, since we are going to tier 3 and tier 4 cities, and our activation actually has got very, very robust. What you see from an industry point of view is overall industry is kind of operating in a very subdued, you know, economy environment. The macro environment are actually got very, very, very soft actually. That is what is affecting everyone, not only us. In that period, what you can clearly see is that we are kind of over-performing, at least compared to our peers. Our cohort, these clients acquired in tier three, tier four cities are actually activating better what Narayan also highlighted. Actually from an internal point of view, there is a macro picture of India where things are little subdued. Internally and from a competition point of view, we are very, very strongly performing as our market share in the industry actually is going up, which is supported by the NSE Active reaching almost 12%, by the end of this quarter. All these three we combined together, hopefully, you know, address your question on how we are going about it. Devender, if you can talk about of the 100 customers which you acquired, say, in FY 2022, and you activated 40 customers out of those 100 customers. Of those 40 customers, how many customers are still trading or I mean if you can share, out of those 40 customers, how many customers have dropped off? Maybe what's the average customer lifetime for Angel's customers? Is it more than 6 months? Because what we understand is that for a highly active customer, trading in options, the lifetime is not more than 6 months to 9 months. No, no. That's, that's a, that's a conclusion. You are giving your hypothesis, right? We, we'll tell you what our data is telling us. I can't comment on your hypothesis. Okay? See, it's very simple, that we today keep 50% of our customers. Our activation rate at 1 point in time 2 years back was around 30%-35%. It has dramatically gone up to 45% and of late it has even started hitting 50. If you look at below the 15 days. If you take 1 year activation, our numbers are even higher than that. Okay? Basically what has happened is your first question on how many of those activated customers stay on in the next year? The answer is close to 80% of them do stay. That's the only reason we are seeing the second year revenue to be the, you know, almost the same as the first year revenue. A guy who is contributing INR 100 say today, he's continuing again to contribute INR 100 in the next year. We even see that somebody who has now matured three years into the system, because our iTrade plan is out, is currently, it's entering its fourth year, I believe, fourth or fifth year. Right? We have this data now that shows us that even third year the behavior is the same. Overall, the ratio has not shifted. It has gotten better. In terms of whether the trading propensity changes within 90 days or 180 days, that is not something we comment on at that macro level or at that micro level, because that's as you can understand, there are a lot of sensitivities around that data which we use internally. Right? We can tell you this much, that overall the activation ratio and engagement ratios have not dropped cohort by cohort. If I have understood this correctly, 80% of your active customers in a particular year continue in the second year. Yeah. trading journey. Correct. Right. Right. Got it. Maybe if I can ask one last question, and maybe this is directed more towards Mr. Dinesh Thakkar, given that he's been in this industry for 25 years. How do you anticipate what is your sense on the trading charges going up from here on, from INR 20 to maybe INR 30 or INR 40? Do you anticipate increase in the trading charges in the next 1 or 2 years? Let me take that question. See that's a business decision. Okay? First of all, we believe that as far as trading charges are concerned, going down is basically ruled out. Anything going down historically, payers have tried taking it down, but it has not moved the needle. There is not much ROI on that play. In terms of raising it, right? I believe at this point, there is no compelling business reason that our team sees to raise it. You know, now it's a decision we continue to evaluate from time to time. As far as we've seen, as far as all the macros are considered in the market, I don't see any reason to raise that. I would like Prateek Mehta, who's our Chief Business Officer, to give his perspective on how he sees order costs changing in the future. You know, any thoughts you can share, Prateek? Yeah. Am I audible? Yes, Prateek. You are. I would agree to what Anant said, that eventually our reaction on what is the right commercial level for consumers will rest on what makes sense, and we will have to continue to evaluate that depending on various factors in the market, what consumers are getting, what is the competitive scenario, et cetera. Having said that, what is happening right now is also that a bunch of players who their growth was turbocharged because of all the VC or the PE investments that came into the space. We see that their PnLs might be under pressure, and they might be under pressure to raise rates. We'll, as I said, and as Anant has also said, we'll continue to watch this and evaluate if we need to respond to that in form or fashion. Right now, as far as the consumers are concerned, we would want to have them the best experience on the product and as well as commercially as well. What is the building capacity, for the derivative trades from current levels, given the kind of explosive growth we have seen, without incurring any additional CapEx? I'm sorry, I didn't quite grasp that question. Can you repeat it? Building capacity for Angel to handle derivative trades in a single day given that the orders are going up significantly. Yeah, yeah. Got it. Got it. Yeah. Good thing is that we have been provisioned for peak and we have, you know, I believe you're asking this in light of our scaling traffic. Yeah. Basically, see, we have been planning for peak, and I think that I don't anticipate much in terms of any rise in CapEx, especially as far as... That at some point you have to start looking at, building out new, newer data centers and such to, you know, to scale our business even more. That's something we have not yet, you know, looked at, right? I mean, that is something we'll continue to plan as we go forward, right? That's. Currently we are seeing close to about 4 million orders in a day, which are being done through our system. What kind of a capacity is built on? How many trades can we handle on the current system, from this 4 million? Doubt in my head. Jyoti, can you just give a quick flavor of this? Sure, Naresh. Essentially, you know, our systems are horizontally scalable, right? If you get more orders, we just have to deploy another building block which will serve the new set of the orders. As long as we can deploy hardware, theoretically we can go to any levels of scale. This is what we've been doing for the last few quarters, right? Every time we hit new highs, we just deploy a new building block to serve the load. Got it. Thanks for this. Thank you. Thank you. Thank you. The next question is from the line of Jignesh Kamani from GMO. Please go ahead. Hi. Just reiterating on the cohort. If you think about our daily order per day, which declined by around 23% YOY, and ARPU which declined by 20%. Its impact is mainly because of 0-2-year-old client, right? For more than 2-year-old and more than 3-year-old client, both ARPU and daily order per day has not declined, right? Correct. That is correct, Jignesh. Yes. Understood. Secondly, on the tech investments, our free cash flow has increased by 42% YOY. How much tech investment do you capitalize in the third quarter and the full year, 9 months? Yeah. This is, this is a question for Vineet. Vineet, do you have the data handy? Yeah. How much have you capitalized? Do you have it handy? One second. Vineet, you just take it. Quarter three, we capitalized about INR 25 crores of capital work in progress. For the entire 9 months, I think it's now in the range of about INR 70-80 crores. How or how many period we amortize this, tech investment? Software we amortize over 5-year period, and hardware we amortize over 5 or 6 years. Okay. Thanks a lot. Thank you. The next question is from the line of Pravesh Jain from Motilal Oswal. Please go ahead. Yeah, hi. Congrats on a great set of numbers. Anant, just in the first week, could you talk about the customer acquisition strategy now? You know, things have been kind of difficult in the market, especially because of the macro environment. Secondly, I understand the competition has also increased for acquiring customers. You wanna say year back or what was your strategy was and what kind of strategies are you implementing now? What changes are you thinking about from, you know, from future acquisition perspective? Yeah. It's a brilliant question. Let me see. Let's give a recap of the past 2 years in a nutshell. Okay? In the past 2 years, our strategy has been, at a macro level, we try to acquire and break even on clients within 6 months. Okay? That's been our overall playbook. We went with the playbook. Our overall macro macro picture is that we want to keep the company operating at a OPM of 45%-50%. Mm-hmm. Going forward, we want to stick to the 45% point, 45%-50% point as far as the overall OPM is concerned. At a micro level, We are revisiting this whole 6-month play. What we are seeing today is that our clients are sticking around in the system a lot longer than we thought. That is, we are seeing that our second year, a person that we acquire today is not just a, you know, it was not like we acquire and then we drop some of the next year. That's not true. Guys are staying on the platform. Their second year, they are in fact contributing same or even more revenue than they contributed first year. Third year revenues are starting to rival second year revenues. Which means my strategy no longer is just looking at a 6-month payback period. We are looking now at a lifetime play. This lifetime play is something we want to approach while keeping the broader company envelope, which DT has talked about many times in the past, Dinesh Thakkar, about the 45% to 50%. We believe we can accomplish our lifetime play with that 45% to 50% envelope. Right? That's the first thing this is changing. What has changed next year, what is changing next year is moving from 6-month look-backs to a lifetime view, number 1. Number 2 is our strategy this year is we want to penetrate very selectively in certain markets. What we are realizing is now the markets are naturally, they are depressed. Okay? Likely that will change once the budgets and everything get announced. What we have realized is we are no longer a market participant. We are actually the market maker right now. If you look at our acquisition numbers for almost 8 to 10 months straight, we have been number 2 in acquisitions. If you look at ADTO, we are far ahead than the number 1 acquirers. In terms of NSE actives, we have grown faster than almost everybody, and all other major players are big ones, right, including the number 1 player who is privately listed. What this means for us is we want to take a role of a market expander and a market enabler, and we want to start looking at what new cohorts to go after. 2 things are changing. Just to recap and answer your question. One is the payback, looking more at the lifetime value, which aligns very well with our super app strategy. Number two is we are gonna start looking at which cohorts we want to pick and choose, because we know that some cohorts are far more profitable than others. This is where we stand. I can't obviously diverge a lot more detail because these are this highly sensitive data, but hopefully this gives you a flavor of what the next year is gonna look like. Great. Interesting. Also, in this light, you know, your market share in terms of, NSE active clients is 12%, ADTO is 21%. How do you see this, you know, panning out? I think we've mentioned in the past that you want to become the largest digital broker. Yeah. How do you see this panning out over the say next 2 to 3 years? It's a great question. See, my internal benchmark is very clear. I want us to get to at least a 18%-20% NSE active number. Okay. NSE active, if we get to 18%-20%, by far we'll be the dominant player. Naturally, that will translate to an ADTO of around 30%-35%. I think this is where I want the company to aim for. Mm-hmm. Now, on our natural trajectory, I believe with the right kind of product interventions we'll get there. That's where I think what we have realized is unlike... We have never thankfully changed our you know, our playbook. Even when people were, you know, burning capital and VC money, we stayed the course. Mm-hmm. We Whatever steps we take, it's always going to be with that broader perspective in mind. Overall, I think the ADTO and You're spot on in that the two metrics we look at, ADTO and NSE active. Both of them are a critical function of how our business performs. In this journey, what are the regulatory challenges that you anticipate and how do you plan to overcome them? Yeah. I'll have Bhavin give you more color on this in just a few minutes. See, basically, you know, what has happened is I want to give a huge shout-out and a round of applause also to the regulators, because what they have done is by introducing those changes, they have actually created a fair playing field and they've created a safe ecosystem for our participants. See, we have always told we have a vision for having 10 crore customers on our platform. Mm-hmm. The only way it's gonna go to 10 crore is if the customers feel safe. Today, they don't feel safe, right? There's still loose ends to tie, which the regulators are coming wonderfully along. I believe the regulatory environment is gonna get tighter. Mm-hmm. Any opportunity to earn free money is gonna go out, you know. We have to get smarter. Whether it is ASBA, whatever it is, there might be more regulatory change. Mm-hmm. I wanted to give Bhavin you know. I'll have Bhavin give you an overview of some of the bigger things that are happening this year, and then, that will give you a sense of how the business is shaping. Bhavin? Sure. Yes. Yes, Madan. Mr. Jayant, basically, we have always remained positive about all the regulatory changes because they aim at investor safety and investor protection. The meta point that regulators drive is how safe are the investors and their, we act like a custodian for their wealth or their assets, and that is where that safety measures has to come in. We have always been positive. In a nutshell, there would be a lot of things that the regulators would be working. I don't want to preempt in terms of what actions are gonna come in over a short-term or a long-term aspect. Whatever has come has made market more safer and better for investors to trade in this particular market. We have always taken this in a very positive spirit, and it always gives us an opportunity to grow within this framework. I'll leave it at that because there are some speculations. There will be a lot of white papers that SEBI would be working and stuff like that. As and when it comes, we'll have a better insight about answering those questions. Yeah. Thank you. Last question from my side, just a clarification. This NF, which will be direct that you will still on brokerage on it on every transaction, right? No direct. It's a proper direct offering. I don't think we, there's no plan to charge any extra brokerage for that. Prateek, am I mistaken there? Prateek, you're muted. Sorry, you're muted. Just hold on please for a second. Yeah. I hope I'm audible now. Yeah. So, uh- Yeah. we have on the consumer side, it will end up being a regular direct direct offering and as Naren pointed out, that's not a place where we are planning to charge brokerage. Having said that, in our partner channel and we'll possibly continue to work because SEBI has also come out with the transaction-only platform play, and we'll see if at some point in time, there's an opportunity on the customer rationale to do it. For now it will be it will be another convenience on the platform as far as the consumer side is concerned. Just to clarify this, there will be no revenue that you'll earn from mutual funds or subscription by your customers on the platform, right? Yeah. Except- Sorry, Prateek. Go ahead. Yes. Except on the sub-broker channel. Except for the sub-broker channel. All right, great. Thanks a lot and all the best for the future. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to 2 per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Gautam Chand Jain from GCJ Financial Advisors. Please go ahead. Good morning, sir. Congratulations for very set of numbers. Thank you. I was looking at your fee and commission income that for the quarter is INR 69 crore, out of which INR 510 is the broking income. What constitutes other than the broking income, the INR 99 crore? Prateek, can you just share the breakdown? INR 510 crores is brokerage and about INR 8 crores is distribution income. The other operating income of INR 63 crores constitutes the turnover charges and turnover charge is the primary source of the other operating income. Okay. The DP charges is included in INR 63 crores? No, DP charges is separate. Okay. That is part of INR 69 crore? Yeah. Yes. Okay. That's about INR 27 crores, DP charges. That is not part of broking income, right? No. Broking is INR 510 crores. Okay. Your, the fee, the commission payable to your, you know, the partners is declining, quarters after quarter. That is primarily due to your, fixed fee plan income is growing more. Is that the correct way to look at it? Yes. As I also mentioned in the earlier part of my speech that the the proportion of the fixed fee income, the number of clients and the proportion is increasing. That's the reason why overall we are seeing a decline in the fees and commission payout. Okay. Just to clarify, out of INR 510 crore- Mr. Jain, may we request you to please rejoin the queue? We have participants waiting for their turn. Okay. Okay. No problem. I will rejoin the queue. Thank you. Thank you. The next question is from the line of Natesh from Investec. Please go ahead. Thanks for the opportunity, sir. Sir, two questions. Firstly, the way our revenue model is designed, it doesn't grow over a period of time. Even if the customer wealth increases, let's say 5 years out, the R2 from that customer at best will be flattish on a 4-5-year vintage basis. Do you see any possibility of a revenue model which grows with customer wealth over a period of time? That is first question. Second question is, if you look at our admin and other expenses, that has actually, if you exclude the one-off of last quarter, that has actually grown quarter-on-quarter, while the new customer acquisition has slowed down quite significantly on a quarter-on-quarter basis. I understand that this expense line item is linked to customer acquisition costs. Why this number has not declined? These are the two questions, sir. First of all, we don't give a breakdown of our customer acquisition costs at that level. You know, I'll still answer the question to whatever degree we can. Let's take your first question. The first question is right. Currently, if you look at our ARPU, we today are approaching an ARPU of around INR 400. Okay? That has 2, 3 years of cohorts in it. Okay? In any digital business, you need to have at least 1 generation of cohort, and at least you have to date them in your system for at least 2 or 3 quarters to know what the long-term impact is going to be. At the current rate of growth, what I do anticipate is that at some point this will plateau out. In the sense, ARPU will not, you know, it's not like it's gonna go from INR 398 to INR 150 or something like that. You know how it went from INR 699 to, say, INR 398. I don't expect that kind of a drop. What I expect is that the median will converge. It will converge to a number. The number could be INR 320, INR 330. You know, currently we don't have a. Well, we have a guess, but we don't have a good approximation of what that will be. We know that it will be in that range. That's one. Second thing is that what we are seeing, though, is our median acquisition costs and our overall unit economics continue to be very robust. We are still operating the company within the 45%-50% range. In fact, this quarter we are at 54%. Right? That tells me we could have actually spent more, but we didn't. Right? What we see is that the overall unit economics is likely to stay as a macro trend to the 45% point while I shift the company away from the 6-month payback mindset to a lifetime view. This is a very, very, very strategic call, because if you look at our journey, we want. What do we want in the next five years? We want revenue diversification. We want people to come in and build a wealth management platform. That has been the vision of the company. For that, we already have the right cohorts which are going to mature. I want to just. This is my high level view on the how we are gonna play the strategy out. I'll just hand over to Prateek. Prateek, if you can give them a lens of how you see the business, the Super App business play out and how you see the cohort, you know, how you see our cohorts maturing and things, that will be very helpful. You're muted, Prateek. Sorry. My bad. My bad. It's a great question, because if you look at new consumer, their life stage, and their earning potential, and hence, as a outcome of that, the stage of wealth that progresses with time, right? If you look at our consumers, they're already have a very great relationship with the platform, right? They're coming in on a regular basis. They log in, they transact. If you look at the traditional way of looking any of the digital businesses, there's a high recency and frequency in terms of how they interact with the platform and their intimate relationship, as well as the conduction of money is concerned. In that context, we already know some of the things that our consumers have been asking us for, right? We've had some intelligence on the distribution business as well, based on our historical forays in that area. We would be clearly building out solutions for specific areas, right? Mutual fund is something that Narayan already hinted about. We know that there are various other use cases that consumers are talking about and have been asking us for. While we will not disclose what is the exact plan on each of those initiatives and how will we roll them out. We have learned a lot about what our consumers need and have been asking us for. We will be building, a bunch of solutions, across the board and both on the products side and also on the financial services side, right? Which essentially will feed in well into the maximizing the lifetime value of the consumer, which is the larger lens we are now taking on our consumer relationships. Yeah. Just a small follow-up that when we are talking about lifetime value, focus on lifetime value, does that mean that the customer acquisition costs we are willing to increase our customer acquisition costs because lifetime value will be a significant multiplier of that? Is that the mindset change that we're talking about? That's absolutely correct. Absolutely correct. Now, of course, we, how we increase it is going to be our secret sauce. Yes, the macro trend is correct. See, now that we have invested in the Super App, we have built a Super App. We know our customers like the journey. Okay? The only way to our profile customers for let's say everybody introduced insurance products, let's everybody introduced lending product, that person is very different than the broking products, right, a broking customer. There is some similarity. Yeah. Still that cohort needs its own maturation or own incubation. We know that there is a business case. We have to start expanding that reach while operating within the 45%-50% point. That's the catch, is that as long as we can remain in the right envelope, we are golden. You know? Yeah. Sure. Sure. Sure. Thank you, sir. Thank you. Thank you for answering my questions. Thank you. The next question is from the line of Ankit Babel from Subhkam Ventures. Please go ahead. Yeah. Good afternoon, sir. My first question is on your ESOP cost. I mean, in last quarter you had mentioned that the ESOP cost would be INR 30 crore in the second half of this year. If you look at the ESOP cost in third quarter, it is already at INR 21 crore. Yeah. I mean, that translates to a INR 40 crore or INR 45 crore annual, I mean, for the second half. Just wanted to have your comments on that. Yeah. Vinit has already commented on the breakdown of the cost. I think that is, you know, the accounting part, Vinit, if you wanna add? Sure. Yeah, you go ahead. If you recollect in my previous discussions, I've told that the overall ESOP cost for the year will be about INR 80 odd crores, out of which the incremental for the issuance grants that were done in 2022 will be about INR 60 odd crores, and we continue to tow that line. Overall, the total cost for the year would be about INR 80 crores. Incremental would be about INR 60 odd crores. What it would be next year, sir? You know, whatever ESOP cost which would flow down from the P&L, total ESOP cost for next year? Next year it's going to be about INR 50 odd crores for the issuances that have already been done. For the issuance that is going to happen in this year, those costs will depend on how many stock options we issue and what are the breakup. Any approximate amount, sir? I mean, it's very volatile on a quarterly and yearly basis. Just for our consumption. We have to give you a number right now because we are still not firm on the quantum of issuance. Yeah. See, one thing I can comment, we can give you a very, just to comment on how we are looking at it, right? Basically, like every public traded company, we have a stock option plan. We have a stock option pool, and we have a certain framework around how we, you know, how much of the pool we allocate each year. Okay? We will always stick to the legal and the process, sorry, the legal and the fiscal guidelines which have been established by our board of directors and our chairman and board of directors. We'll always stick to that, whatever percentage that is. Within that percentage, yes, there is a elasticity. Last year, for example, we spent 1 point something%. This year we might, we don't know, we might be spending 2%. You know? We just don't know that. Whatever we spend, it will be within the overall envelope done by the board with the ESOP plan, number 1. Number 2, it will be within the overall profitable envelope that we have talked about. Overall, if you are wondering if our expense is going to shrink, the answer is no, because as a growing company, we have to continually expand our talent and our reach. I don't see the ESOP costs going, you know, down. You know, for example, it's not like Google or Amazon, where they have already invested in all the employees so far ahead of time that now they can afford to keep it at whatever the, you know, a few basis points of their overall P&L. A very good case in point is if you look at HDFC. In the first 10 years of their P&L, look at their ESOP costs, right? It's always increasing. That's how growth companies operate, because you need that premium to get talent onto the team, you know. That said, to give you an idea of... I wanted to just give you the color of how we are thinking about it, you know, just so you have a sense of what's the, of how we are planning. I understand it won't come down, but I'm just worried will it shoot up drastically in the coming years? See, if Let's say if it shoots up, okay? That means that we have the right vehicle to justify the return on investment. Ultimately, we have to look at employees as our prime assets. They are the ones that are moving the needle and creating business value. If by investing INR 10 bucks, if I can get INR 1,000 bucks of value, then it's a brain-dead decision. You know? If in absolute terms it means I'm spending more, so be it. You know? We are actually adding more to the bottom line. What we do is when we do the plan, we look at overall. We are in the business of maximizing opportunity cost for investors, shareholders, and employees. Mm. If we cannot return, you know, if we cannot create that market, if we cannot create that opportunity, then obviously there is going to be a correction in our ESOP costs and everything accordingly. So far that has not been the case. That's really how we look at it. The mindset is growth, and the mindset is wealth creation for institutional shareholders, company, and obviously also for employees. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Pruthul Shah from Anubhuti Advisors. Please go ahead. My question is with respect to the advertisement spends for the quarter and 9 months ending December this year. What is the expenditure for advertisement spends? We don't, you know, discuss that level of detail. I can just have PT give you a broad flavor. PT can just walk him through, you know, how we have strategized this year. Yeah. Thanks. Thanks, Madan. See, we are a very established brand, you know. Last year when we did the rebranding, you know, that time we spent enough advertising dollars to ensure that our total awareness reaches a 90% kind of level. This year we have been conservative because one, the market was soft, and second, we were waiting for our new app to be fully in place. But in terms of advertising spends, our strategy is to be conservative, more digital spends, less TV, more digital. Focus more on organic traffic with the spends. Focus more on search volumes across. Play Store, YouTube, and Google. That has been our strategy. We have been conservative, but I think once our app is in place post this quarter, starting this quarter to next year, we're gonna be more aggressive given that we will be supporting new lines and new businesses also. Thank you, Prabhakar. Yeah. Okay. Okay, got it. The next question is with respect to the Active Clients. Currently true clients is basically 34%. Where do you see this ratio going in medium term. I- Yeah. Yeah. Very good question. Good question. I think in the medium term, I believe our activation ratios will be basically hovering around the same point, you know. Largely, this is for a couple of reasons. One is that there has been no significant decay or appreciation in our cohort groups. If you look at the people that we have acquired, the age profile, the tier in which they're coming from, nothing has changed. Nothing has changed, I don't think the number will change dramatically. However, what will change is that we will have new people coming to Angel, which we have never had. We have never had anybody who has come to Angel for anything other than stockbroking. That 100% I'm certain is gonna change. As you can see, we have always talked about our roadmap. We are going to launch MF. MF is already launched. I told you guys it's going to come next, you know, in Q1. We are actually ahead of schedule. We already launched it. Okay? We are working on a lot of other products. Insurance is coming up. Including other exciting products on the lending side, which we'll talk about when the time is right. Right? We are working on multiple new families of products. I do expect that with that, the overall activation ratio will actually get a slight bump. What it is, I can't quantify just yet. We don't have the data. You know? Basically you are saying that, with the new app, the client acquisition number, the gross client will slightly inch up and. The broking side, it might not likely to translate into the broking trading volume or trading orders per se, and that will result into a slightly lower in terms of activation ratio, or how should we look at it? No, no. It will go up, no? It will go up. Okay. Go up. It cannot come down. It will- Okay. not come down. It'll down. It'll only go up. What we are seeing is the industry-wide ratio also, you know, decline. You know, two years back ratio, right, 30% level. We are also checking that trend what industry is facing. We are kind of, you know, concerned about whether that ratio will slip below 30% any day. I don't see that ratio slipping below 30%. See, I know that some of our other brokers, large digital brokers have come out and said that. I know what you're referring to. Right. If you look at their acquisition track, you know, the our largest broker, the number is lower for him, not for us. For us, the number is black and white. We are publishing every quarter, you know? Correct. We are not seeing any decline. Now, in fact, I would say I would go as far as to say that Devender, you should add, you should give your perspective here. I actually think with the Super App, the activation can get better because customers come to the app for more reasons than just broking. Let me just defer to Devender here because he's, he has a lot more data which he looks at, and he can give you some more insights here. DK, over to you. When I look at the NSE active clients, I think, you know, overall the industry is trending lower because of, you know, microenvironment. This trend, I think, is going to subside in lower in some time. It has not subsided yet. The whole industry will continue de-growing for some time. Along with us, along with that, our numbers are also going to grow. As rightly mentioned by, you know, Narayan, that we see the lower effects because our activation programs and our, you know, behavior of clients who are new to, you know, new to the cohort is actually increasing over the last quarter period. We are seeing higher activation of clients who are now because with launch of the new platform and the new, you know, ML-based and data science-based programs that we have started. We're actually able to see that ramp-up happening very, very strongly. At an overall level, we don't see that these numbers will go very down. Definitely not below 30%. Maybe around 32% it might go to, but we definitely see that this will plateau out. As we launch more services, I think there will be more cross, you know, acquisition or cross-selling of clients where you will actually sell the right product to the right client, which will actually increase activation in the long run. Think about it this way, that today we acquire clients in a one pocket and we then try to, you know, figure out solutions for them and then go ahead. When you try to do the same thing in multiple pockets, you will have understanding of doing the right thing to right product, which will then allow only the right product people to get into the system and actually, you know, experience a business to that level. I see that this has plateaued out and this will continue that way. Sure. Also, just to add one more thing. You should look at, you know, every month we publish our MSC active numbers. You know, why don't you do this? Why don't you plot a graph of our activation number, okay, and plot Zerodha right next to it. And you answer. I don't want to use the competitor's name here, but do that analysis yourself. Just do it over the past 12 months, you will see how fast they have decelerated, and you'll see how fast we have grown. You will get your answer right there. You know? Right. Right. Right. We have done that. The number two guy, without naming it, has been losing the activation number, quite rapidly. Exactly. That's why I would... Yeah. That's the reason why our concern, we are not seeing that in Angel, and that's a very positive, you know, trend which we are reading right now. Given the macro view looks like for the next year I'm sorry to interrupt you, sir, but your voice is breaking. We are unable to hear you clearly. I was saying that, market was kind of, you know, stabilizing or likely to not generate enough return versus past few years which market has witnessed. We might see this trend for the temporary more services, you guys are able to bring in with the app, then it will start to reverse. Before that it will trend down. That was the concern I had. You know, interestingly, there is only one other way to look at it. Let's assume that the market. I don't believe it is going to be bearish, okay? Let's just say it actually goes into a bear mode, okay? Even then, if we are growing faster in this broking industry than the competition and we are growing, then our business is already in great shape. This is a long-term play for us. We see this as a, you know, multi-decade play. Overall, from all lenses, our strategic positioning continues to become stronger as we introduce the Super App platform. Of course, there's lot of room for improvement. We are not saying no to that. As it stands, we are off to a good start, you know? Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Yeah. Yes, Sarvesh. Yeah. Good afternoon and congratulations on a decent set of numbers. Thank you. Sir, one, most of my questions have been answered. Yeah. One thing which I wanted to understand that given that our business hardly has any working capital requirement or much of even if we are adding hardware, but that's also not much compared to our absolute. Yeah. profit base. Why can't we increase sustainability, sustainably the dividend payout rate from the current 35% odd? Because there's really not much of a need, especially, during this time when, you know, the growth is also not coming through as strong because of the macro reason. That is question number 1. Secondly, you know, you were talking about this active client ratio. When, you know, I was seeing this graph for the last 2 years, you versus the industry, I think our active client ratio versus the industry was at a much higher, with a much higher gap. We were better off compared to the industry at a higher margin. That has actually come down in the last 10 years, in the last 2 years. What explains that? Ideally, we would have expected our active client ratio minus the industry active client ratio to be trending upwards. It has actually in the last 8 quarters span, it has actually trended downwards. Yeah. Actually two things. First of all, let me take. I'll just very quickly talk about dividend payout, then we will get to the other stuff. See, dividend payout, first of all, we are in a growth phase of our company right now. Okay? At growth phase of the company, our strategy is to continue reinvesting our capital in expanding our business, building our book of business, and growing and expanding into new territories and new areas. There is not much to add beyond that. Vinny, Ganesh is on call as well. Vinny, is there anything you'd like to add this before we jump to the next question? No, no. I think what is important is to keep in mind that we have a high aspiration and potential seems to be quite huge. Definitely this kind of unlike earnings that we have, I think it's not very big enough, like to think about a dividend or increasing dividend at this stage. What we are doing, I think it is perfect, and we have to keep enough capital for whatever growth or positives we see in the future. Already we have like invested huge amount on super app, and we would like to see that we are able to capitalize, capture good market share in each and every service that we offer. That will require a good amount of capital backing with us. Thank you, Ganesh. Now your other question on activation. See, between there, right? If you remember last year, there was a huge influx of venture money, and there were huge ETF related schemes which were going on. That completely has skewed the activation charts. If you look at the 4 player, right? They were at an industry all-time high activation ratio because they were giving out free ETFs. If the minute they give out free ETF for even INR 10, you trade on the platform, that shows up as an NSE active active number. Whereas we never did that. We have never done that. We don't do that even now. Okay? Obviously at a macro level, yes, you can say that, you know, why do these numbers look so different? If you look at the actual NSE active number, there we have only continued to rise. When it comes to people actually trading. We are keeping more traders on our platform than everybody else. I think that's the more important trend we should that we are focused on, you know. Other than that, these numbers, whether it is 35% or 40%, it's kind of a moot point if the person doesn't end up staying on the platform and trading, right? We have to look at it from that point of view. Understood. As we are thinking of adding more and more, to our Super App now, you know, in the past few years there were so many new entities which came to the game. Yeah. doing variety of stuff. now that the VC money is not flowing in as strongly as in previous years. Are you also seeing some inorganic opportunities, you know, in the market right now that we can sort of bolt on to? Or we feel that it is better to organically sort of build up everything in our own way. Yeah. Great, great question actually. Great question. See, in the past we could never even look at it because without having a super app platform, there is no play to integrate, you know. There's no value creation there for the customer. Whereas now that the platform is built, I think as a, I'd say, as a team, we are strategically gonna look at both organic and inorganic options. You are absolutely correct that with the funding scene drying up, there are some excellent opportunities which will open up. You know, we are currently open to those ideas if the timing is right. Understood, sir. Congratulations and all the best. Thank you very much. Thank you. The next question is from the line of Deepak Sonawane from Haitong Securities. Please go ahead. Hi, Deepak. Yeah. Hello, sir. Am I audible? Yeah, yeah, you're audible. Yeah. Yeah. Thank you for the opportunity and congratulations on a good set of numbers. I just have 1 question regarding our client base. We just wanted to understand much more in detail regarding our customer profile. If you see that over the last 8 quarters, we have been adding around 1 to 1.2 million customers, right, on a quarterly basis. Mm-hmm. If you can you just give us a color, a more color, based on above. I mean, among these 1.2 million customers, how many customers, I mean, how many% of customers are not trading at all with us? I mean, and even after a particular period of time, we have been, I mean, we give up in terms of nudging these customers to get active. These are the. Mm-hmm. Yeah. Yeah. Got it. Got it. Okay. Usually we don't give this level of data, but I'll at least I'll try to answer a part of that question. Your question really is what is the dormancy metrics going to look like? How does it evolve? Because we are paying upfront cost. See the issue is this, right? I've already paid the KYC cost for acquiring all these customers. Respect to 50% are becoming active. The remainder of the 50, what are we doing about it? Because it's sunk money. That's the marketing, that's the holy grail of marketing, if you can optimize and fine-tune your CAC, you know, to that level. First of all, even with 50% activation, which is obviously a phenomenally high number, we are performing extremely well. Even if that number goes down by another 5%, we'll still be performing very well. I'm not too worried about that metric. Right? Your other question is very insightful. See, we have over the last year, we are one of the few companies today who have built a machine learning-based dormancy model. Okay? Just this quarter, actually we hit an all-time high in terms of how many dormant clients became reactive. I look at this as a emerging area for Angel, because with very large customer bases, a large part of our customer base is already within our system. They already have the KYC, they have just gone dormant. If you rekindle them back, your obviously your time to market, your brand efficiency, all of that goes up dramatically. This is a strategic initiative which has been, which, you know, which we have been working on for the last year, and we have started seeing some phenomenal results in that. The results are still too early to call out at this point. To give you an idea, we are, it's a heavy data science influence play, and we have actively started looking at this. We in fact we track it at the CEO level. That is at my level. That gives you an idea of how important that is. Yeah. Okay. Thank you so much, sir. Thank you. Thank you. As the line has been placed on the hold, we'll move to the next question, which is from the line of Shubham Goel from Motilal Oswal. Please go ahead. Hello? Yes. Yes, I wanted to ask that, the company is giving a dividend, right? Yes. Sorry? Yeah. The company will be giving a dividend, right? Yeah. Yes. Vineet had already announced that, no? Yes. Okay. My doubt regarding that was that, if the company is also spending money on technology, then how and why is it giving dividend? Like, why not invest more money into technology? It's a great question. When we did the plans and when we look at the overall fiscal outlook of the company, right? We feel that for the kind of growth we want and for the kind of scale we want, we can operate well within the financial envelope of the 45% OPM, you know. In some quarters, as you saw, like this quarter, our OPM is 54%. We don't ever want to be at that number. We actually want to be between 45%-47%, if you ask me. Right? Many times what happens is because our operational efficiency basis is much higher than we think, we believe it's very wise to return that money as dividend back to our shareholders. Very simply put, our capital needs are completely addressed. We don't need any more cash than this as of this point. If needed, we always have other ways that we can deal with that topic. Yeah. Thank you. Thank you. Thank you. The next question is from the line of Anan from Electrum Portfolio. Thank you for the opportunity. My first question is basically, what is the update on the incorporation of the AMC? The second thing is, what is the outlook on your distribution business side? Yeah. incorporation on AMC, I think the paperwork is on. We likely will expect it to complete within, you know, within the next quarter or so, you know. I think it will be ready by then. Now, that said, just because it's formed doesn't mean we are gonna spring into action, right? It's gonna take us some time to figure out how we actually go and, you know, actuate a plan to operationalize it. You know? That's a longer, that's a longer topic, which we currently have not. We are currently working on the right models there. Now your second question is more relevant, is distribution. Our entire future play is built on the distribution platform. This is where we are hedging our, you know, not hedging. This is where we are. Well, hedging is the right word, actually. We are actually hedging on this for the long term, because I anticipate that our profile, our customer base is so strong that there is huge opportunity to upsell and build even more stickiness when releasing new products. We want to just give a sense of how you're thinking about the step pyramid of all these services, you know. You're muted, yes, again. Sorry. yeah. Hope I'm audible now. Yeah, yeah, you are good. All right. Shubhang, the way we are thinking about this, right, is that if you look at a consumer and the typical, we are currently in the broking space and something which is larger than broking is the entire savings space. Of course, there is the earnings space and there is that spending space, right? If you look at the consumer, literally 100% of the consumers are earning and they're spending, right? Some of them are saving and then some of them are investing, and then eventually some of them are very active in broking, right? What we have realized is that our consumers, and especially, as the years have rolled by our consumer profile has continued. A large number of consumers are still very young. What is going to happen over the next few years is that their requirement for financial services across all of these use cases is just going to go up. Hence, we will solve for whatever problems we might have across these areas. Now to what Narayan has already alluded to, which is there would be some interesting lending solutions that will come by. There's insurance and then there are, depending on what is the right experience and what is the right product construct for our consumers, we'll keep doing more on the distribution side. Clearly mutual fund insurance, and some of the other fixed income products will be part of the play, which we are already in parallel, we've been distributing in the past. That is something that we'll expand on the product and then there are new, completely new solutions that we will build, over the course of the coming year and beyond. Thank you, Bhupesh. Yeah. Thank you so much. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Narayan Gangadhar for closing comments. Yeah. Thank you everyone for joining us today on the earnings call. You know, as we have discussed, we are extremely excited and really super pumped about the launch of our Android app. This app is going to be the cornerstone of all our future journeys, and we are betting big on how we can introduce newer and newer products to the market on top of this platform. We continue to invest and open up the market. We are going to take a pole position in expanding the market going forward. You know, we want to continue our penetration in tier 2, tier 3 and even to tier 4 and 5 cities and bring these customers live on our platform and expose them to this wide range of products that we are about to build, you know. We'll also continue to invest in upleveling our clients through better education and better refinement of our digital infrastructure. I want to thank all of you for your continued support and confidence in Angel One. For any further queries, please do reach out to Hitil, our head of IR or SGA, our investor relations advisors. I wish all of you a great day ahead. Stay safe and stay strong. Thank you very much. Thank you. On behalf of Angel One Limited, that concludes this conference. Thank you for joining us. Thank you. You are now disconnected. Bye-bye. Thank you.