Ladies and gentlemen, good day, and welcome to Angel One Limited's Q4 FY 2023 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 touch-tone 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. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Hitul Gutka. Thank you, and over to you. Good morning, and welcome, everyone. Thank you for joining us today to discuss Angel One's Q4 FY 2023 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 the website. For today's call, Angel is represented by Mr. Dinesh Thakkar, Chairman and Managing Director; Mr. Vineet Agrawal, CFO. We also have the other senior leadership team, along with HJA, our IR consultants. The leadership team will give us a brief overview of the operational and financial performance of the quarter gone by, followed by the Q&A session. There may be certain 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 Mr. Dinesh Thakkar for his opening remarks. Thank you, Hitul. Good morning, everyone. I'm leading the call after a few quarters. However, let me reassure you that this is temporary. The leadership team at Angel One is built on a strong foundation, and needless to say, this professional team is capable of leading not only business growth and goals, but overall communication as well. With Narayan Gangadhar's decision to move on, the day-to-day operation of the company will continue to be led by the team of high caliber professionals under my active guidance. I would like to take this opportunity to once again state on the record our appreciation to Narayan for having led the organization for nearly two years, while wishing him all the best in his future endeavors. We continue to strengthen our core teams as we maintain our focus on immense growth opportunities, keeping in mind our desire to improve customer experience consistently. Our goal is to partner with all Indians in their wealth creation lifecycle by offering them all financial products they need as they grow. The team is further strengthened by the addition of Mr. Amit Majumdar as an Executive Director for strategic initiatives of the company. It gives me great pleasure to welcome Amit, who has had a variety of experience in the BFSI, health, consulting business, and has also been associated with Angel One in the past. Amit brings deep rigor and experience in the area of business growth and profitability. He will oversee various strategic initiatives that Angel One wishes to explore going forward. This is on the leadership front. Leadership team is aligned with the vision of making Angel One India's most trusted fintech brand, empowering billion lives, leveraging the power of data and technology. FY 2023 has been another year of strong performance for Angel One, in which we continue to strengthen the business with each passing quarter. We launched the Super App and have seen successful migration and transition of all clients to the new app. It will be fair to say that this was perhaps one of the largest migration in digital space achieved by any company in India within the shortest possible frame. Even in tough market conditions, our performance in FY 2023 has demonstrated great resilience across various parameters, such as our market share in India's incremental demat account grew by 366 basis point to 18.4%. We concluded the year with a client base of 13.8 million, making us one of the India's largest retail stockbroker. Our orders, a key revenue driver for our business, grew by 36% year-on-year to INR 926 million. The underlying ADTO more than doubled to over INR 13 trillion, thereby expanding our market share in overall retail liquidity turnover by 57 basis points to 21.8%. Our digital playbook very clearly demonstrates the strong foundation on which our business is optimized. Some highlights include our total client base grew by 7.6x over the last three years as we penetrated more deeply into Tier 2 and beyond pockets and onboarded many new to market clients. Our net revenues correspondingly grew by 4.9x over this period. Our digital model offers significant operating leverage as shown from margin expansion and a tenfold jump in our profits over the last three years. This superlative performance has come without any compromise on profitability or investments to spur the growth of our businesses. The fact that our operating margin has remained above our desired range of 45%-50% gives us very strong headroom to achieve our aggressive growth targets. Let me share with you some insights about quality of our business the team has built at Angel One. The fundamental principle at Angel One has always been to stay focused on unit economics and run a profitable business, keeping clients at the center while enhancing their experience and wow quotient with the Angel One app. Our business model is geared towards attracting young cohorts who do not have physical access to capital market. These young digital natives have a long runway in their career with sustainable revenue potential across multiple product offering on our Super App. As we speak, approximately 43% of our clients acquired in FY 2023 fall into this category of less than 25 years in age. Our digital model has enabled us to penetrate deeper into Tier 2, 3 and beyond cities, acquiring such clients and serving them profitably. Empirical data on past client behavior suggests they continue to contribute healthy revenue over a five year period and beyond. Our digital business model demonstrates further improved revenue progression as clients continue their journey on our platform. In our Q4 FY 2023 investor presentation, we have shown some strong data points evidencing this behavior. Wherein the robustness of our digital model demonstrates a very healthy LTV to CAC of 7.8x based on first three years of aggregate client revenue. We firmly believe that as a client spends more time on our platform and consumes more service, this LTV to CAC has a long runway of growth. This strong LTV to CAC trend further strengthens our mission of aggressively taking advantage of massive growth opportunities in under-penetrated geography while maintaining our robust contribution margin profile. Our seamless digital offering, coupled with our trusted brand, fulfills the basic principle pursued in any multi-generational product suite. The inherent success of our Super App strategy is further strengthened by the strong growth in monthly unique SIPs observed in the first quarter of its full-fledged rollout. As we offer other financial products catering to an evolving needs of these clients, we are confident about expanding our relationship across their long tenure, thus achieving the true potential of our Super App. Our low fixed cost structure built on a very stable, agile and scalable digital model insulates our margin profile under all market conditions. This places us amongst the few highly profitable cash accretive business in the ever-evolving fintech industry. More details are provided in the presentation. We continue to believe that the strengthening regulatory framework across various aspects emphasizes providing stronger guardrails, especially for growing retail investor base. This has been proven with continual growth across the multiple regulatory interventions in the past. The ensuing re-regulations on client funds management is a further decisive step in building the confidence of retail participants. Our purpose is to collaborate productively with regulators in achieving this goal. I hope this incremental insight helps enhance your understanding of our business. Vineet will now take you through our financial performance, post which we will be happy to answer your questions. Thank you, Dinesh bhai. Good morning, everyone. FY 2023 has been a breakthrough year for us as we increased our client base from 9.2 million to 13.8 million clients. We registered record high net revenue, EBITDA and profit after tax. During these four quarters, Angel One has outpaced the industry to gain market share while delivering a strong performance across multiple operating and financial parameters. Our quarter four FY 2023 financial performance continued its strong trajectory, with the gross revenues growing by 9% quarter-on-quarter to INR 8.3 billion. Gross broking revenue grew by approximately 14% quarter-on-quarter to INR 5.8 billion. This accounted for about 70% of our total gross revenues for quarter four FY 2023 as compared to 67% in quarter three of FY 2023. Interest income, which includes interest earned from our client funding book and from deposits with exchanges, has remained stable sequentially at INR 1.4 billion, accounting for about 16% of our gross revenues in quarter four of FY 2023. The ancillary transaction income linked to the turnover grew by nearly 21% sequentially. This accounts for 9% of our gross total revenues. The offset has been achieved due to a strong to 20.5% market share, 24.5% market share in India's incremental demat accounts, 16% quarter-on-quarter growth in orders to 263 million, 28% quarter-on-quarter growth in ADTO to INR 18.5 trillion, leading to an expansion of 124 basis points in our overall retail equity turnover to 22.8%. Our consolidated EBDAT margin for the quarter stood at 57.5% in comparison to 53.9% for quarter three. Our quarter four FY 2023 margin has been positively impacted by INR 300 million on account of reversal of stock option grants. Our consolidated profit after tax from continuing operations increased by 17.1% quarter-on-quarter to INR 2.67 billion. Taking into consideration the reversal of grants, which positively impacted by INR 300 million, the consolidated profit after tax on adjusted basis would be INR 2.45 billion. For FY 2023, consolidated gross revenues grew by 32% year-on-year to INR 30 billion. EBITDA grew by 43% year-on-year to INR 12.2 billion. This translates to 53% margin. Profit after tax from continuing operations grew by 42% year-on-year to INR 8.9 billion. For FY 2023, the aggregate dividend payout is 37% totaling to INR 3.3 billion. The period in cash and cash equivalent increased to INR 55 billion. Client funding book was INR 11 billion, whereas borrowings stood at INR 8 billion. Robust profitability along with efficient capital utilization led to an improvement in return on average equity to 47.5% for FY 2023. 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 one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Swarnabha Mukherjee from B&K Securities. Please go ahead. Yeah, thank you. Good morning, sirs. Congrats on a great set of numbers. First one I wanted to understand, you have mentioned that your margin requirements might go up as a result of upstreaming, streaming of client funds, and the incremental cost could be around INR 40 crores for nine month FY 2024. Just if you could throw some little bit more color on this, why would the margin requirement go up? Is this because you will have funds to be placed in exchanges. Some color on that, please. Sure. Sure. Vineet, if you answer this question. Sure. Swarnabha, in the SEBI board meeting dated 29th of March, the board approved the framework for upstreaming of client funds effective 1st of July 2023. Under this framework, the fund shall be upstreamed only in the form of cash or earmarked fixed deposits or pledge of units of mutual funds, et cetera. This means that bank guarantees submitted as a margin to the stock exchanges have been kept outside the purview of the upstreaming framework. This was allowed earlier, but in this current upstreaming framework, this has been kept out. This will lead to increasing the proprietary capital required under the segregation and allocation of collateral at a client level. Hence, the calculation which we've done, this means that it requires additional working capital for the company. That would be the, to the tune of around INR 600 crores of additional working capital requirement. Would my calculation be correct, sir? Sorry, I couldn't understand that question clearly. Your additional working, the additional borrowing that may be required would be around to the tune of INR 600 crores. It could be around INR 700-800 crores, and the incremental cost for that would be about INR 40 crores for this nine months and tentatively about INR 50-55 crores on a annual basis. Sure. Sure, sir. Couple of questions on the revenue side. First of all, in this quarter, particularly in the month of March, we have seen very strong momentum in terms of number of orders. Just wanted to get your views on if you think this should be sustainable or was it more a reflection of the market conditions where we can maybe see some normalization going ahead? On the ancillary transaction charges that you have, that has also gone up a bit, although number is relatively small in your mix, but it has gone up quite a bit compared to last quarter. Also wanted to understand what is going on there. Let me take your contra question on order first then on ancillary business transaction, Vineet will answer on that. In terms of order, we don't go month by month. There will be, because this market like would continue to be a bit cyclical. What we have seen during all the cycles, like orders, number of orders that we get per quarter or per month has also progressively increased. If you look at the block of like three months, six months and one year, we look at trajectory. When we plan our year, we look at the trajectory based on number of orders which increases on every quarter basis. Every quarter will be either a good month, bad month. It's been combination of different kind of like factors which impacts retail participation. Overall our observation is that during all the cycles, we have seen number of orders from retail have constantly increased. On this ancillary transaction, Vineet, if you can answer. This ancillary income is linked to the transaction, the turnover charges that the exchanges levy on us and then we levy on the clients. This will increase in tune with the increase in the ADTO. As you see the ADTO, quarter-on-quarter has been growing and that is linked to the increase in the transaction charges or ancillary transaction income, as you call it. Sure. Sure, sir. Vineet, on the interest income, part, what you report as part of your P&L, has there been some kind of reclassification, between interest income and, other income? We've consolidated the income which was reflecting in two parts of the financial statement into interest income. Otherwise there's no change. Just for the ease of understanding. Now your interest income will have the margin funding book interest income plus your float income as well as your other own, you know, income from your own proprietary book. Would that be correct? That's right. That's right. Okay. Understood. Lastly, couple of things on employee expenses and other expenses, if you can give some color how to think about these numbers, because other expenses have gone up this time, and employee expenses have come down slightly, X of the ESOP costs related. If you can give some color how to think about this. In quarter four the employee expenses, other than the ESOP expenses have come down primarily due to some reversals in the provision of, you know, variable pays, et cetera, which we made throughout the year. That's the only impact, otherwise there's no major change in that. Okay. Other expense, will it remain close to that, this INR 100 crore mark going forward? Yeah. Other expenses, a large driver of the other expenses are the client acquisition cost. As we keep on increasing the acquisitions quarter on quarter, this cost is going to grow. It's a variable cost. Other costs are primarily on account of cloud expenses, which again are linked to the turnover or the volume that happens on our platform. That also are going to grow. Sure. Last question on the ESOP side. If you could highlight, you know, the reason for reversal of grant and any reversal we would expect to see. I'm sorry, sir, your voice was breaking. Can you repeat, please? Yeah. I was asking on the ESOP cost, if you could highlight the reason for reversal of the grant and any subsequent such reversals if we can expect in upcoming quarters. Yeah, Vineet, you can take this. In terms of the future impact of the reversal, there will not be any future impact because once the stock grants have been reversed, whatever cost of that was there, we've taken the reversal. There's not going to be any impact in the future. Okay. That's helpful. Thank you so much for all your answers. Thank you. We have our next question from the line of Sahej Mittal from HDFC Securities. Please go ahead. Hi. Morning all. Thanks for taking my question. First is on the other expense, right? If I look at slide number 24, printed, slide 24. You've been saying that the other expenses are sort of elastic, right? But if I look at the cost for 2Q FY 2023 and the customer additions in Q2 FY 2023 versus Q4 FY 2023, right? The customer additions have only gone up from 12 lakhs to 13 lakhs. But other expenses have shot up 30%, right? What explains this? I mean, if you can split it out in terms of the marketing expenses, maybe some branding expenses. Because this is not indicative of elasticity or if I'm reading out something wrong in these numbers. See, you have to read this way that what we are showing as an variable cost, this is something that we can control in bad market conditions. Most of the cost, what has been shown, like a finance cost or commission that we pay to sub-broker or a variable cost, which is combination of marketing and all that. That can be like we have levers to control that. Now, on your question of that cost of acquisition, like how much we acquired quarter three and quarter four, I'll ask Prateek to reply this on why this cost varies. Because as we said that we are going into an area where actually pockets which are under-penetrated, which are difficult to capture. Angel has been very successful in terms of acquiring customer who are in this kind of those pocket and an age group of around 25. It is really like a unique to Angel that we have acquired those customer and we are profitable acquiring those customer. As we are going deeper into this pocket, these are the pocket which are growing at a higher rate. Because of our unique approach in terms of like we acquire customer, we see that their journeys are creating revenue and we are profitable in terms of each and every acquisition that we do on in this kind of cohort. Our cost definitely would not be comparable to previous quarters we are referring to that. Prateek, if you can just throw light on that. Sure. Thanks, Dinesh bhai. Mr. Mittal, just to add to what Dinesh bhai has already shared with you. Broadly, the 8% incremental market share, if you look at it, our 8% in increment in number of customers has come in an environment where the actual additions in the, demat additions in the industry has come down, right? While the industry additions have come down, we have actually expanded both the number of customers and we've also expanded our market share in the new acquisitions. This primarily is a function of the acquisition engine that we perfected, looking at the younger customers and looking at Tier 2 and Tier 3 geographies to expand our reach. As far as the breakeven on these customers is concerned, we continue to break even within two quarters, so we are comfortable with our product experience and customer experience. We know that once these customers come in, we are able to engage them meaningfully and continue our both our acquisition market share and the profitability of these clients, both of them are conserved and hence we are definitely very comfortable about the increases that we might see temporarily. The long-term building block on this will continue to remain the LTV by CAC that we have shared in the presentation. As you've seen, continues to remain at seven point eight for the three years, the first three years, and it continues to add enduring revenue to us in the long term. As long as we're comfortable of that, we'll continue expanding. So, so now- One second. Like, our revenue officer would like to add something. Devendra, you would like to add on this last quarter acquisition? Yeah. Yeah. Hi. Hi. Hi, Sahej. I think, from a quarter three to quarter four point of view, Sahej, the number of sales has grown by almost 30% as mentioned in the presentation. I think the cost, in terms of acquisition, also grown in line. The overall, you know, incremental remains or the overall performance remains as we run by the, we are a growth company. We are driving growth, we are going to enter new pockets. We have been, you know, entering pockets in a very profitable way, where we maintained our break-even points at around two quarters. That's the two things that has been there. Just to answer that part as well, I think the quarter four sales has also grown by 30%, which is in line with, you know, what you're saying. Right. Yeah. If I look at the cohort-based revenues, right, because if you're saying that in a difficult, DMAT addition environment, if you're going out and spending higher, expenses on a per customer basis, but the incremental revenues which these new customers are contributing, I mean, in no way we understand even from the ecosystem is that they'll be contributing in such a way that the payback period would remain at six months. I mean, the numbers don't seem to add up. I mean, what kind of efficiencies are we looking at? The payback period will definitely shoot up, right? If you can also give out the- So, uh- Yeah, please. Go ahead. Currently, like, whatever costs we are acquiring, we give current position. Whatever we are saying six months, it is based on this current quarter. The way we analyze is that whatever costs we acquire every month on month, so whatever cost you are seeing, we analyze based on what kind of like revenue we'll get from those particular cohorts. What we are mentioning right now is based on current cohorts that we acquired. Right. If you can please quantify the cloud expenses which we have recorded in this quarter and maybe for the full year. Amit, do we disclose cloud expenses separately? No, we don't disclose the expenses, in that detail. When we release the financials with the schedules, you'll have some data around the other expenses. Right. Right. One last thing is on the employee expense. If you can please, you know, give out the split between your employee in your staff cost, what proportion would be fixed and what is the variable component? Amit? Typically the increments, the variable pay and the ESOP costs that we onboard as part of our total cost are variable in nature and can be, you know, managed or reduced. Right. Of our, I mean, of our overall staff cost, what proportion would be variable pay? I mean, my question was around that. Total of all of these would be about 30%-35%. 35%. I mean, of this INR 30 crore reversal in ESOP expenses, what proportion of those ESOP re-reversals is attributable to the CEO exit or the ex-CEO exit? The entire INR 300 million is on account of that, yes. Oh, right. Got it. Got it. This was all from my side. Thanks. Thanks a lot. All the best. Thank you. We have our next question from the line of Aditya Chheda from InCred Asset Management. Please go ahead. Hi. Can you break down the cash and cash equivalents and investments into the cash which company has and cash which is for the margin requirement? Amit? Yeah. The cash and cash equivalent of INR 55 million, of that almost INR 40 billion is the clients' funds, and the rest is the network of the company that has been used for margins. Got it. Thanks. That's it. Thank you. We have our next question from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Yeah, hi. Congratulations on good set of numbers. Much appreciate the kind of presentation is uploaded every time with more granular details on the various aspects of the business. Coming to my first question, I would just want you to extend the point on that INR 40 crore impact, what you've spoken. Is it pertaining to the... If the client gives 100% collateral against which you have to kind of deposit cash to the clearing corporation? Yes. Yeah. Segregation of margins that requires that the client has to bring in at least 50% in cash and 50% non-cash. Where the clients offer more non-cash collateral, there the broker has to pitch in with their proc funds, which can be in the form of cash, FDs or BG. Mm-hmm. This is one reason why the, you know, working capital requirement increases. Of course, there is also this element of segregation of margins across various segments, where also we need to have some margins with the exchanges. Okay. Okay. Secondly, could you just, you know, explain this, the slide seven in a slightly more detailed manner? Yeah. See, here we are trying to like, there were lots of questions in terms of what kind of like LTV to CAC, broking, kind of like company can expect from their client. We have kind of an historical record of people in that physical era, where we have seen that a customer life extends beyond five years. Kind of like revenue that we get from customer drops, but gradually it continues or gets steady after 3rd year. When we are moving to digital era, we are seeing that, we are seeing an improvement in customer's revenue or lesser drop of customer revenue from 1st year to 2nd year and from 2nd year to 3rd year. If you go by kind of empirical data or evidences which are there, the customer life cycle even in physical era, where actually there used to be lot of customer revenue loss because of dealers attriting and all that. In digital era, because clients are downloading an app, it remains on their phone. We are not only seeing improvement in progressive years, but this can continue beyond five years. This is what we are trying to compare that customer revenue from stockbroking. It is not just for a year or two, it continues beyond five years. In digital era, we are seeing improvement of customer revenue from compared to what we were seeing in that pre-digital era. If I've understood it correctly, a customer acquired in H1 '20 gave INR 100, or their cohort gave INR 100. In H1 '21, they gave INR 69 of broking revenues. Is that understanding correct? I'll ask Devendra to explain you the slide properly. Devendra, if you can just explain, the slide properly. You are on mute, Devendra. Yeah. Sorry. Hi, Prayesh, can you just explain, can you just ask the question again for simplicity and clarity around- I just wanted to understand. Is my understanding correct that in that slide seven, H1 2020, you are mentioning 100%, and in the year two you are mentioning that as 69%. Is that understanding correct that customers that you acquired in H1 2020 gave you INR 100 in H1 2020. In H1 2021 they gave INR 69, and in H1 2022 they gave INR 63. Is that what you're showcasing out here? Yes. Correct, correct, Prayesh. That, that's what it is. That in the year one they have given us INR 100, and in the year two, if I look at H1 2020 clients, they gave INR 69, and in the year three they gave INR 63. If you look at the recent most quarter where clients have completed year two, this is completed data of clients. H2 2021 gave INR 100, and the year two they gave INR 86 to us. Okay. Yeah, that's right, Prayesh. Okay. Got that. You know, my third and last question would be on the float income. You know, there is a lot of thing now that, you know, ASBA may or may not be get implemented. There could be forced, while it's voluntary right now, but eventually it will be implemented in some form for the secondary market. Just wanted to get some numbers around the float income that we generate and which could be at risk for, say, you know, whenever that ASBA gets implemented. Dinesh Bhai, if you can throw some thoughts on how do you see the ASBA implementation really happening in the industry, whether that will lead to consolidation or how, you know, what proportion of customers would be kind of willing to move to ASBA. Some thoughts there, that would be helpful. Yeah. See, what we have seen is that whenever there is kind of like regulatory changes, which helps bring in more confidence in retail, we see a huge improvement in terms of participation from retail in equity market. We are very bullish. Every implementation that regulator is doing is bringing more confidence of retail customer, and we are seeing huge penetration. If you look at like our TAM almost like people who are holding PAN card and all that, it is beyond INR 50 crores and all that. What is stopping them from coming to the market when markets are giving such an excellent return is somewhat they are not finding this market to be very kind of like reliable or trustworthy. My opinion is that all this kind of like changes which happens, it happens to expand the market. People like us who have a huge market share, only they gain further market share when these are implemented. My view is that as far as right now appears to be a bit far away. Right now, we are talking about gearing up for up streaming and all that. As well does not seem to be coming in near future, but whenever it comes, we are not seeing a concern like there can be impact in terms of growth income and all that. We are more dependent on broking income and other income related to financial services. I feel a huge consolidation will happen in terms of clients would move towards more digital kind of brokers because they have a perfect ecosystem to take care about online transfers and all that. Mm-hmm. Point is that, even RBI and banks should be very with those kind of like real-time technologies. According to my opinion, it is bit, time away from here. Okay. Got Got that. Lastly, any new thoughts that you have that, you know, whether the brokerage rates should increase or who will blink the eye first? Because the cost of operations, cost of compliance by every announcement of regulator, the regulatory is just going up. You know, do you have any thoughts around as to how the brokerage rate should kind of move and who will blink the eye first? Because next year you have a INR 40 crore impact, possibly, you know, analyze this is a INR 60 crore impact because of the upstreaming of funds. There is additional, I think, regulator had put in on identifying fraudulent accounts that system has to be in place. There are many compliance costs that have gone up. Do you think this INR 20 per order is a fair cost, or do you think that will be high, that will have to be increased in the near future? See, for industry, there's been huge cost, operating cost increases as well as, if you look at, technology and all that, regulators coming heavily on having proper like data center and proper kind of like, cybersecurity and all that. What it suggests that you need a scale to be into this business. A medium size or a small size brokerage house cannot continue to be profitable unless and until they raise the rate. Mm-hmm. like, players like us who have a huge operating levers, they are very kind of like profitable because incremental business, what we get, straight away it results in improvement in our bottom line. I don't think that bigger brokerages like us would think about changing the rate. That is my personal opinion because we are seeing we have a huge operating margin, and we would not like to be very much concerned about few costs increasing here and there. If you look at total kind of like the way we do compliance and the way we handle technology and all that, already we have taken lots of kind of an upfront costs to fulfill that requirement of regulator. With this also, we are seeing our margins are quite decent enough. Every business works based on operating margin. If it all, we are getting 50% and we can accommodate all this cost and because of scale we get advantage. It will just add up to our advantage of getting more market share when midsize broker is unable to like adjust this cost in their cost structure and increase the rate. That is where I feel people like us would be having, organized like us would be having an advantage of morely, more dependent on acquiring or getting more market share and offsetting this increased cost. Okay. Got that. Thank you so much, and all the best. Thank you. Hi, Prayesh. just to add on your first question, right, which was around slide number seven. Mm-hmm. Just to give you a little more color on the data that we've shown there. If you look at the pre-digital RR, for any customer who used to give INR 100 in year one, year two used to become 47, and then year three used to become 32, and then it would become stable at about 26% up into an annuity business. What we have done when we're showing this LTV information to you, we are showing that 47%, which used to be in year two, has now improved to 86%. Mm-hmm. 32% in year three has now improved to 77%. Mm-hmm. Hence, what we have done is that in the model, we have taken the current behavior of the customer cohort that we are seeing, and we modeled out for every INR 100 that we're getting in year one, we are taking INR 86 for year two and INR 77 for year three. Mm-hmm. We also know from our historical experience that this customer is going to stay with us for the long term and will continue to give us revenue at a stable rate over a window which extends beyond the 5-year that we have modeled here. That's helpful. Just one line item in that estimation, the slide eight. What is the direct cost that is at INR 100 crores in year one and also INR 60 crores in year two and year three? Prayesh, this is the cost to serve the client. The first year, cost that you're seeing at about INR 100 crores, it includes the cost of onboarding the client, and thereafter, whatever is the cost to serve the client, the direct cost. Okay. Roughly around INR 40 crores is what you're saying is onboarding and rest is kind of closer to services. Yes. Yeah. Got that. That is very helpful. This is a very interesting slide that you have put across. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure management is able to answer queries from all participants, kindly restrict your questions to two at a time. Kindly join back the queue for follow-up questions. We have a question from the line of Nidhesh Jain. Please go ahead, sir. Thanks for the opportunity. Sir, on the slide seven where you explained the cohort data, how is the trend for clients that we have acquired in FY 2022, in FY 2023? I think that data we are not sharing that cohort. The clients that we acquired in FY 2021, two years hence, how is the behavior there? Prateek, if you'd like to take this question. Nidhesh, we have shared the data for the clients that we acquired in financial year 2022 in the next slide, which is slide number eight. This builds a scenario where we are saying that for those clients that we've acquired in financial year 2022, what was the revenue that we generated only from those clients in that period? What was the upfront cost that we incurred? Then going forward, what is it going to be the revenue based on the trajectory that we are seeing in slide number seven? Yes, sir. I think in FY 2023, though, in slide number eight, it's estimate. It's not actual data for FY 2023. Is that right? Or based on the clients, how they have behaved, FY 2021 clients, how they behaved in FY 2022, we have extrapolated that, the clients that we acquired in FY 2022, they will behave the same way in FY 2023? Yes. In the second year, when the clients, those that we have acquired in financial year 2022, when they move, some of them have moved to the second year, and some of them will move to the third year. Based on the trajectory that we have seen, their revenues will move in this progression. Well, I think it would be actual data, not an estimate for FY 2022 or 2023. That was one observation. Second is, sir, the other operating expenses that we have seen increase, is it reasonable to assume that the acquisition cost per customer has gone up, now versus what we used to do in the past? Though break-even period still remains less than six months, but, per unit, cost of acquiring a customer has gone up. Is that a reasonable understanding? See, we don't disclose cost of acquisition. Just to answer your question, see, as I said that as we are moving towards deeper kind of like pockets like TFC and beyond, what we look at business unit when we have certain cost of acquisition, whether that unit is profitable. We don't really focus on increase or decrease in cost of acquisition. Currently, our focus is on increasing market share. Wherever, whichever pocket we feel that is LTV to CAC is profitable or we can achieve a certain X on that, we try to go into that pocket and get a new set of customers. Our current focus is on market share and LTV to CAC. Sure. Lastly, on the last earnings call, we have mentioned that we will move more towards LTV to CAC framework, which may lead to increase in operating costs. Historically, we were focusing on payback period of two quarters or less. Now we will be moving towards LTV to CAC model. That movement has happened and consequently, how should we think about the EBITDA margins in FY 2024? Yeah. That movement has happened. As promised, that's the reason the slides are included, that we will be now tracking LTV to CAC. Now it is not that, like, this thing, like operating costs will increase. Now we are more, kind of, have visibility in terms of what revenue we can expect from a customer when it comes to projecting revenue for five-six years from the same cohort that we are acquiring. Based on that, we are re-fine-tuning our model in such a way that wherever we feel that we would be able to maintain operating margin of 50%, we would like to go aggressive in terms of acquiring those cohorts. That's the reason we told that we would be moving our model towards LTV to CAC and we'll be disclosing all this number every quarter. Our focus would be to maintain this operating margin between 45%-50%. Our focus would be to increase market share. Our focus would be to become a leader in this industry. We need to take very unconventional kinds of step, where the scores which are profitable, we should not avoid them. Nidhesh, the purpose of including these slides, as Dinesh bhai is mentioning, is just to bring that there is a long-term visibility in terms of the revenue and the profitability or the margins that we expect from clients that we acquire. Otherwise, what was happening is we were fixated with a payback period of six months or seven months or five months, and we were not looking at revenues beyond that. What we want to portray here is that in our business, once we acquire a client, there is a multiple year revenue profile that the client has, and that is what we want to portray. We take the cost upfront, and then there is a strong margin profile, very strong, you know, contribution margin that these clients give over the multiple period. Sure. This is just one follow-up on the Super App. There we have seen that mutual fund SIP has almost doubled after we have launched mutual fund on our Super App. That will not be a revenue generating stream because I believe that most of these will be direct funds. What are the plan, rollout plan for other financial service products which will be revenue generating? We have a head, Saurabh, who heads this kind of like other income on the Super App. We have started this journey of mutual funds just one quarter back, and we have achieved a good kind of like, I would say, uptick from that. I would ask Saurabh to explain about other journeys that we are going to include on our Super App. Saurabh? Yeah. Thanks, Dinesh. Well, we have already launched mutual funds in the quarter starting January, and in two or three months we have seen number of SIPs grow 2x. The other products that we intend to launch this year primarily fall into the unsecured consumer lending space. Where we'll be acting as distributors to begin with, and then move into creating our own risk models. I think lending, unsecured consumer lending, just to answer your question, unsecured consumer lending for the retail space will be the key focus area for us to generate revenue in the future. We'll also be delving deeper into the insurance business going forward. Sure, sir. Does that answer your question? Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Thank you for that. Thank you. That's it from my side. Thank you. We have a question from the line of H. Ox Frederick from Sundaram Mutual Fund. Please go ahead. Hi. Thanks for the opportunity. Sir, I have two questions. One is on the number of orders per NSE active client in the F&O space. If I do the math, it used to be about 40 orders per client, and that has jumped to 50 orders in the quarter. The last eight quarters it used to be 38, 39, 40. Suddenly there's been a substantial jump in 4Q at by 23. Can you please help me understand that? Did we, do we disclose this, number of order or it is, calculated, like back-end calculated? the segment-wise breakup of the orders per client, so that data we- Yeah. Okay. Fine. Devendra, if you can just answer this phenomenon. Yeah. Thanks, Dinesh. Yeah. Hi, Frederick. So Frederick, when you look at NSE active client base that we, you know, overall looking at, and it's driven by overall investor category of clients. When you look at to the whole industry, this number is driven by investor category of clients. When we look at now our business, basically, it is driven by orders, where, you know, orders is really what is driving it and where various segment penetration like F&O, commodity, currency, MTS and other product categories will play our role. So from an overall point of view, it's not right to look at, you know, compare these two matrices because they are not in the same space. You know, one is driven by the overall investor and, you know, business is rather driven by investor plus, you know, other categories of product that we distribute, you know, and then we give, provide on our platform. From an overall point of view, I would say that we should not relate the two in that sense. Okay. Got it. Got it. Sir, again, since our persistency is getting better and we have good visibility, why do we stick with the 45%-50% kind of an EBITDA margin? The contribution margin is very attractive and we are gonna enter products which are gonna give us better contribution. What makes us conservative is my question. Yeah. We are not conservative. What we are saying that cohorts that we acquire, because of digital model, that particular cohort, they improve on their contribution margin. Because we are into kind of an investment phase where we want to become a kind of like most trusted brand in fintech, thing, we would be into this investment phase for a few years. When we are investing, we are conscious about not to go overboard, but be within that reasonable limit of whatever additional cash we are generating. Some amount should be put on innovation and up-fronting on new technologies, acquiring new market share. We would be conscious about spending and maintaining this margin, operating margin of 45%-50%. Having said that does not mean cohorts that we have acquired, well, their margins will keep on increasing. As you saw that, what we have shown in that page number eight- Yeah. The cohort that we acquired in 2022, that will continue to improve on their contribution margin. Because we are developing this, kind Super App, we have developed the Super App for this year. We have launched it. We are launching mutual funds. We'll be launching lending product, insurance product. We'll continue to be into kind of like heavy investment phase where we would not lose an eye on operating margin between this 45%-50%, which includes investment in all kinds of like new technologies and acquiring customer for those cohorts. Yeah. That is very helpful, sir. Sir, what is the ESOP outstanding right now? Sorry, I did not get your question. The ESOPs, sir. ESOP cost which will be coming in in the coming quarters. Yeah. You want to know what is the ESOP cost? Yeah. Yeah. Yeah. Vineet. The current year full ESOP cost is about INR 53 crores. Against that, the ESOP cost for the next year tentative is going to be about INR 110 crores, but that includes cost for some PSUs that have been granted, which is about INR 85 crores. For, only for the RSUs and the stock options, it's about INR 25 crores. PSUs have been granted considering a very stretched business growth. Unless we achieve that stretched business growth, we are not going to increase- I will answer that, Vineet. Yes, sir. Like, normal ESOP and RSU would be around INR 25 crores, as Vineet said. This year as we are ready launch, we have launched Super App. We have worked out a stretched target for people. If they achieve that, then we have. Mm-hmm. made allotted PSUs for those segments and those targets. Okay. This is very helpful, sir. Thank you and all the best. Thank you. Thank you. We have our next question from the line of Anand Bhavnani from White Oak. Please go ahead. Thank you for the opportunity. Two questions. One is, there is a talk of, extension of marketers for. I'm sorry, sir. Your voice is breaking. Am I second? Sounding muffled. Yeah. I hope this is better. Can you speak again, please? Can you repeat your question? Yeah. No. I'm sorry, sir. It's still muffled. I'll call back in the queue. Thank you. We have our next question from the line of Pallavi Deshpande from Sameeksha Capital. Please go ahead. Yes, sir. Thank you for taking my question. Just one was an observation on the rating, the rating on the Play Store for the app. It seems to have declined, four versus some peers now, you know, higher than us. Just any comments on that? Yeah, second one would be if you could share any market share targets that you may have in terms of the ADTO business. What was the second question? any targets on market share for the ADTO business? Okay. Let first Ankit cover this rating of our app. Yeah. Yeah. Hi. Hi, Pallavi. Play Store ratings, which is Android, app ratings are a reflection of the reviews and ratings combined, and it's a moving number. Since we were migrating from the old app to the new app, obviously there was an element of surprise to a few customers, and that's why there was a fluctuation. Earlier also, by the way, we were at, just mentioned we were at 4.2. The latest number by the way, as of now, today is 4.1. It's a moving number, and we are very, optimistic it will touch 4.5. Right. Second one would be on the market share target. what is the Is it on market share on, of ADTO you're asking? Yes. What exactly is your question on market share of ADTO? No. What would we have a FY 2024 target in terms of market share there? This is actually tying in with the earlier question that was asked, you know, with regard to price increases. You know, is it the market share? And, uh, like- Right. increasing market share and all that will be more of an forward-looking statement that we don't disclose or we don't say. In terms of rates and everything, already we have answered. Right. That we will touch this, the point that I was just trying to tie in that, you know, is it market share that drives us right now and is that why? Understandably. We will be spending to gain more market share. Already we have done it every kind of in quarter. Right. So focus- Right. will be increasing our market share. Yeah, right. Right. On the operating margin, I think you mentioned 45%-50%. That implies a decline in FY 2024. Yeah. That includes even printing costs that we take for new technology, investments that we do in new segments and investment that we do to acquire more customers. When you acquire a customer for that year, our operating margin is not same. Right. Yeah. Yeah. What I was saying, broadly, we will be guided by this operating margin of 45%-50%. If you look at cohort-wise, our contribution margin tends to increase for every cohort that we acquire. Right. Got it. Thank you so much, sir. Thank you. We have our next question from the line of Deepak Sonawane from Haitong Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. My question is regarding our fees and commission expenses. For FY 2023, we have reported around INR 641 crore of the fees and commission expenses. As I understand correctly, the majority of that will be to the sub-broker, paid to the sub-broker. Apart from that, I mean, are there any agencies or, I mean, are there any stakeholder that we pay commission or else fees just for acquiring a client or else, just getting those clients active? Do we account that expense as in this fees and commission expense? Vineet will answer that. Post that, Ketan can take this question. Yeah. The fees and commission expenses is purely the sharing of broking revenue with the sub-brokers, with the authorized persons, for whatever revenue that we generate from that channel. Nothing else is recorded in that. This is just only authorized person and not, I mean any entity that you acquire clients through online channels or Right? No. Okay. This is only sub-brokers. Okay. Got it. Thank you. Thank you. We have our next question from the line of Jignesh Kamani from GMO. Please go ahead. Yeah. Hi. Just on the activation rates, it has been declining since last couple of quarters. I just want to know the reason behind this and where it should lie. If you further dissect, is more due to the new client added in last two, three quarters where the activations are lower or in old client also we are seeing some fatigue and their activation is declining. First of all, we have shown the slide, where we are clearly showing that activation and number of orders are not really connected. As we acquire more customer, few customers become active in that quarter. When market condition changes, we see lots of more customers getting active. Overall, what we have seen is that, there is no strong correlation. If you check slide number 38, where we are clearly showing, though there is a market condition, activation ratio changes. If you look at number of orders, they steadily grow. Our assumption is that as market, currently this quarter market was not great. There were like more volatility and no interest from retail as well as, even, other participants. As this kind of like, market movement improves, we'll see a better activation. When it comes to number of orders, we are seeing that steadily grows. If I further dissect it, so if you two or three year-old client, their also activation rate has declined, or it's mainly because of a new client is not becoming much active because of the current market condition? Devendra, will you be able to answer this? Yeah. Yeah. Thanks. Thanks, Jignesh. Jignesh, right? Jignesh, it's similar for old and new client because, you know, this is, it is the overall buy-in see of the clients, you know, people are interested. We are looking at a 12 months, you know, people who are invested at least once in 12 months because NSE active represents that. This is primarily driven by, you know, how the overall market sentiment looks like, which have been subdued in the last quarter. It affects the new customers as well as the old customers in a similar way. There's not much difference. Actually, for old customers it's little lesser, but from an overall point of view, it affects them similar way. There's no difference between the two. Understood. Thanks a lot. Thank you. We have our next question from the line of Aejas Lakhani from Unifi Capital. Please go ahead. Yeah. you know, team, firstly, again, credit to all of you for putting out the incremental information, you know, quarter after quarter and providing incremental insights into, you know, the business. It's really very helpful. Credit to all of you for that. Dinesh, my one question is that, you know, again, on slide number seven, the data that you've put out, you know, in the post-digital era for the customers who are far more sticky as compared to the pre-digital era, the counter narrative to that is that, Dinesh, that they've not seen market cycles. How would you comment or, you know what, how would you know, advise us to think? Because these are fairly new customers. Again, they've not seen seasoning and maturity, across cycles. How do you expect their behavior or if you could comment a little on that? Yeah. That's an excellent question. When we are referring to empirical data now, it covers almost like your dotcom bubble, your global financial crisis. This is a sample kind of like what we are creating in front of you from FY 2015 to FY 2019. If you ask my experience that clients who are active in that post-digital era also had a similar trend in crisis situation when market dipped, and again, when it recovered, we saw same kind of trend panning out. When we say five years and beyond, it includes one bull market, one bear market and all that. Behavior of a customer who comes to the market remains same. What we are saying is that if pre-digital era this was a certain trend, a customer what we acquired, it is not that they remained only when markets were good and they ran away when markets were bad. They remained in the market for five years and beyond. Same thing we are going to see in the digital era also. Like, it is not because of COVID or because of that, they are new to market. People who are new to market in 2001 or 2005 to 2007, if you remember, there was a huge bull market. Post that also when we calculated five years block and beyond, it remained almost same. When we take an LTV of a customer for broking, we usually take five years and beyond, and then try to map it in terms of how this behavior would be from one year to two years and two years to three years and beyond. If you look at slide number 18 that we have shown, in that we have shown that despite all different market cycles when we have seen this kind of like huge volatility in Nifty, retail participation has progressively increased. The number of orders you see has progressively increased. What it means, every customer who was acquired in that phase remained active beyond certain period. It is not just only in that phase when markets were good they were active, after that they become inactive. If you take the whole cohort, what we look at that active customer base, they are the one who contribute in the market. When you look at active customer base, it does not drop, like suddenly, if you look at NSE active client base, data is available to public. When we go into granularity of our data, we have seen, I'm talking about last 15, 20 years, the customers that we acquire remain active five years and beyond. We are showing that trend in slide number seven, and what it was historical and how we are seeing improvement in digital natives. The reason for improvement, as I said previously, in physical era, when we acquired a customer, it was served by a relationship manager. If they attrite, we lose that revenue from that active customer. In digital era, what we are seeing when a customer is acquired, they remain on our platform and are served by on our platform. That's the reason we are seeing increment from first year to second year compared to previous era. Got it, Dinesh Bhai. That was very helpful. Dinesh Bhai, going into the next year, what are the key metrics that you would track for growth that you are tracking, I mean? Same as I said that, we have been successful in terms of acquiring customers from Tier 2 and beyond, we would remain aggressive in terms of acquiring those customers. Our model has been successful in terms of acquiring customer, those customer and getting decent revenue. If I look at operating margin from those customer also is very attractive. Plus, we have added mutual fund journey, so definitely that attracts stickiness of customer who wants to invest in some other product apart from stockbroking. Progressively in might be fourth quarter of this financial year, we are going to introduce third-party lending and all that. We'd like to be distributor of all services. That's the reason I said that this year also we are looking at kind of like leaning to investment phase, and we have worked out that stretch target for our team, and we are confident that we'll be able to get good market share in areas which are non-broking areas. Going forward, our focus now would be not only achieving good position in stockbroking kind of like area, but also achieving a good position in mutual fund, starting our businesses in lending as well as going bit aggressive on insurance side as well. Got it. All the best, Dinesh Bhai. Thanks. Thank you. Thank you. We have our next question from the line of Sanketh Godha from Avendus Capital. Please go ahead. Yeah. Thank you for the opportunity. My first question is basically on the same other expense cost. If I do the math, is it fair to assume that to maintain the EBITDA margins around 45% to 50%, this overall expense will be like 27% - 28% of the total fee and commission income? That's the way you want to operate these other OpEx, given you said it is largely variable in nature. Vineet, please answer this. Yeah, it remains in that trajectory. If you see, the net income is about INR 2,300 crores and our, other income is in line... Sorry, the other expenses are in line of about 25% or so. Got it. Got it. The question on the margin given to the clearing corporation, just wanted to understand that the float income, what you are going to earn from the clients will remain, but the additional borrowing cost will be the additional cost which will impact from FY 2024 onwards, right? The float income is not going to go away. It's only if ASBA becomes the reality, the only way to give to trade, then you have a challenge with respect to the float income. That's my understanding, is right? Absolutely right. And, and- There is no impact on the float income, under the upstreaming mechanism. It's just that there will be some incremental cost of borrowing. Sir, can you break down Vineet, the INR 520 crore of interest income in the operating part, into MTF's interest income on your own money and float money or client money? That right now I won't be able to share. We'll Once we upload the schedules, you'll have the data. Got it. Fine. Finally, on the entire margin, what you give to the clearing corporation, can you give a broader breakup of the entire margin broken down into cash collected from the clients themselves and bank guarantee and the lien on FD? I mean, you indicated that INR 40 crores is the cash and INR 15 crores is closer to your own money. But what amount is bank guarantee? Is it the same amount what you are borrowing around INR 700 crores-INR 800 crores? No. We don't disclose the breakup. I mean, the underlying cash and cash equivalent which we give to the exchanges is in that range of INR 4,000 crore of client funds and the rest of our funds. How much of that is in the form of bank guarantee, that we don't disclose. Got it. Last one. I mean, MTF income somehow has not done great for us in FY 2023. Any measures internally you have taken to build this book over FY 2024 where that additional source of income can come, which has struggled in 2023? Ketan can take this question. Yeah. MTF, you know, we are working on that strategy, you know, to increase the book size and the market share there. Right now we'll not be able to disclose that, but, yeah, we are, we are on it. The trajectory is to make sure that in 2024 the fund size or the lending portion should be much better than what you have expected, what we have witnessed in 2023? Yeah. That's the plan. Sanket, first of all, like, we are not too much dependent on margin trading book because that is a kind of like ancillary service given to a customer who is onboarding for stockbroking activity. There are lots of customer who do F&O and lots of customer who are doing on cash segment. This cash segment is more dependent on market conditions. If at all we see a good rally in the market, they try to borrow more. There will not be any linear kind of like correlation between like our revenue growth and growth in MTF. Having said that, we are working on lots of new products on MTF side, so we'll see improvement on that side. Got it, sir. Thank you. Thank you. Thank you for all. Thank you. Just one correction. A few minutes back, I had mentioned the ESOP cost is INR 110 crores. The breakup of that into PSUs and the other stock options is PSUs is about INR 55 crores and not INR 85 crores, and the rest is again INR 55 crores. It remains same as last year, or almost same. Yes, yes. Just that correction. Yeah. Thank you. We have a question from the line of Sanjay Kumar from ithought. Please go ahead. Mr. Sanjay Kumar? Hi. Yeah. Thanks for the opportunity. Just one question. I understand equity F&O structural trends since 2008, 2010. What is happening in commodity ADTO? Because it's also growing exponentially. Are we enjoying the efforts of MCX, or is it down to what we are doing? Like, you know, we have gone from 25% market share to 55%. It's a phenomenal performance. Just wanted to understand this part. Ketan, you can take this question. Yeah. You know, if you look at commodity, you know, largely the new volumes are coming on the option side. MCX is introducing, you know, various products on the option side. You know, given the fact that, you know, we were the early provider of options on our platform, on the mobile platform, you know, that's the benefit that, you know, we are getting today. Hence our, you know, market share there is growing. Okay. Is this also a structural trend like equity F&O or is it linked to volatility in commodity prices, so it's more short-term in nature? No. MCX is bringing in lots of innovative products there. MCX, I mean, options were lacking on their platform, you know, which now we are seeing lots of traction there. You know, those products are actually, you know, helping business growing. Okay, okay. right now I think it's at 4%, 5% kind of contribution. Can it go to double digits or can it add more value for us going forward? It would be, you know, too early to quantify that. Okay. We are seeing, you know, a good traction there for sure. Okay. Okay, sir. Thank you. That's it from my side. Thank you. We have our next question from the line of Sakshi Goenka from Sohum AMC. Please go ahead. Yes. Hi. Thank you for taking my question. Just one follow-up on the margin funding. Supposing if secondary ASBA is implemented and all customers go for secondary ASBA, will that INR 4,000 crore on balance sheet, which is in the form of trade payables, will that disappear? Is that understanding correct? Sorry to interrupt. Ma'am, can you use your headphone please? Your handset? Yeah. Can you hear me now? Yes. Please go ahead. Just a follow-up question on that margin funding. Supposing if secondary ASBA is implemented and all customers opt for it, will the INR 4,000 crore of trade payables which are sitting on a balance sheet disappear? Vineet? It's very early to comment on that because we still don't have any visibility of how and when this ASBA mechanism is going to get implemented, whether it'll become mandatory both for the clients or the brokers, or is it going to be optional? It's very difficult to actually quantify anything. Assuming that everybody opts for it because everything will be now logged in your bank account and nothing will be coming to you guys. Is it fair to understand that INR 4,000 crores will not be with you? It's a very hypothetical question right now, like, we would not be able to answer that, because we have to look at, like how smooth and easy would be for a customer to use that ASBA. We are dealing with customers who actually require finance limits and all that, so they don't appreciate a, even a delay of a millisecond. This whole banking system has to gear up to those kinds of like, transfers of funds and all that. I would say this is hypothetical question right now. We would not be able to answer it. Sure, sir. Thank you so much. Actually, just one follow-up ques... Hello? Yeah. Please go ahead. Yeah, just one follow. Any timelines on appointment of new CEO? We are looking out for an appropriate candidate, looking at what plans we have for next three-five years. As and when we are able to identify a candidate, we'll announce it to the market. Sure. Thank you so much, sir. Thank you. Thank you. We have our next question from the line of Dixit Doshi from Whitestone Financial Advisors. Please go ahead. Yeah, thank you for the opportunity, sir, congratulations for a great result. Sir, we have around ancillary transaction revenue of around INR 258 crore. This is like over and above what we pay to the exchange. Generally many brokers charge their clients on an actual basis. Is it we charge transaction charges to our clients with over and above the actuals that we pay to the exchange? Does it, does this revenue, is this revenue under risk of any regulatory thing? Generally, we've seen practices in the broking community that they charge on actual basis. No, no. We charge based on actual basis of slab, so definitely our turnover in exchange is different and client-wise slab is bit different. There is no concern like, I think that concerns us right now, because it is as per what business they want to promote and what we charge is also within that regulatory framework. Yeah. Okay. Okay. Because your volumes are high, you are charged at a lower slab by the exchange. That's what you're saying. Right. Okay. Okay. Okay. Sir, in this interest income, our float income would be roughly around INR 200 crore? Vineet, if you can take this question. We are not disclosing the breakup of the float income and the interest income which we earn from client funding book yet. Once we release our full set of financials with the schedules, you'll have that. Okay. Sir, since we are, what is the investment that we have done in our Super App and, that investment is complete now or, and the Super App is all live and active now? In terms of the CapEx spend that we've done, as I'd mentioned earlier, it's in the range of about INR 30 crores and the spend has been capitalized, since the Super App is already live on the platform. Okay. If, if I heard you correctly answering one of the questions earlier, you said that you'll be distributing loan products and we will also take the loan book in our book, or we'll take the risk or we'll just distribute the loan products? No, no, we would be distributor. Apart from this kind of stockbroking and AMC business. It'll be a platform for loan. Yeah. We won't take the risk of the loans. No. Okay. My last question, sir, is because we are generating a lot of cash, almost, and so, and most of this products that we want to diversify is kind of a service and distribution kind of product, which may not require this kind of investment. Where do you, what do you think about investing, you know, this cash flow that we generate every year? No, I think, like we have a decent, distribution, dividend distribution policy to take care of excess cash. We are definitely looking at lots of different investment and opportunities in the market which can help us grow our market share in other areas of, services that we aspire to become leader. Lastly, sir, by when are we planning to launch our own mutual fund? Vineet, if you can just. Yeah. We got our in-principle approval, as a sponsor, in February, and we have some time to submit our final application. Once we submit the final application, the regulator takes anywhere between, you know, three quarters to four quarters to complete the processing and give us the final approval. Post that, we can launch our schemes. Technically it's about, at least, 6 quarters away. Okay. Okay. Thank you. Thank you, sir. Thank you. We have our next question from the line of Saptarshee Chatterjee from Centrum PMS. Please go ahead. Yeah, thanks for the opportunity, sir, and congratulations on great set of numbers. I have just one question that you have said that the activation rate that has slowed down, it is across the board. When I see your slide number 22, where you have given age-wise bracket of like cohort-wise distribution of brokeraging income, then I see that two to three years is a very high growth compared to other cohorts. Is it that their, like, number of orders per client is very different from otherwise? Or like how to read about this slide? Devendra, would like to take this, question. Yeah, yeah. Hi, Saptarshi. When you look at this slide, Saptarshi, you know, this basically tells us now the clients in various age brackets. Our main uptick of client growth started in FY 2021 when post-COVID, in fact pre-COVID and then post-COVID, it just jumped up heavily, right, as you look at industry as well. What you are seeing here when you see 242 going to 845, this is the large influx of clients that came in comparison to pre-previous two -three years. That is being represented here. If you look at the recent time, where I think we are acquiring at a very healthy rate of clients, That is a more clear cut na understanding of know how the revenues are progressing in terms of that. You look at the past data, our base before FY 2021 was pretty small. We acquired a large base of customers, more than INR 1 crore since then, and that's what is representing when you look at this chart. When you look at beyond two-three years, it will show a very significant growth in that particular years. Is what is visible from this chart. You can't compare it from that point of view. If you want to look it from this point of view, like I'll give you an example. The Q4 2022 client, which is INR 1,534 as a revenue number, that number, as we had shown before, if those clients have moved to second year, which is basically Q4 2023, that has become INR 1,329. You can actually see the correlation with slide seven, where we've spoken about how the year one revenue and year two revenue of a client looks like. This is the movement of clients, you know, over one to two years, two to three years. When you look it from a quarter four, quarter four point of view, the same client gave us INR 1,534 in the first year, and the same client gave us INR 1,329 in the second year when they moved to the second year cohort. That's the way you read it. Post two years, basically the number of clients have increased drastically. That's why it's difficult to read in this chart at this point of time. Understood, sir. Just one related question is that, your slide number seven beautifully gives the lifetime, like how the revenue is, acquired for the client. I'm saying for slide number 22, My question is that for less than one year's client, the revenue numbers actually is not growing much. Is it that concerned that the new, the quality of the new incoming client is deteriorating, or like how do you read this? Again, you know, I think Dinesh also mentioned, whenever you look at revenue, you know, looking at six months and 12 months period is the right way to look at it. Here we have presented a quarterly revenue breakup, the revenue that we got in the quarter four, which was kind of a subdued quarter as well. When you want to look it from that point of view, this number is not too readable. We have to look it from an yearly point of view, you know, to cover various kinds of market scenarios and, you know, a normalized revenue which is comparable in nature. We cannot read this being revenue in that one, because they will have their market conditions of that particular quarter affecting it. Moreover, if you ask me from an overall point of view, we have seen stability in terms of the first year revenue that we are getting from the clients in the prior year, in this financial year is what, you know, what our models and what data we have really showing at this point of time. Okay. Thank you so much. Thank you. We'll take our last question from the line of Anand Bhavnani from White Oak. Please go ahead. Thank you for the opportunity. Two questions. One is on insurance. Insurance is typically seen as a extremely high push product and a lot of large players in this space, insurance distribution, they have call centers and they are setting up physical offices. How do you think of your insurance plan and your right to win in this segment? Second question. Yeah. Second question is on how do you see the impact of extension of, you know, ASBA for equity trading on your volumes? Do you have an expectation of how this should lead to change in equity volumes? Also, can it affect your commodity volumes, given that several of your customers might be doing both equities and commodities? The first question, insurance, Saurabh will answer that. Let me address your second one. Extension of time depends on how much they're going to extend it. They extend only till five. It thought be a big impact on our volumes. Neither our costs will change because we are a digital player. Hello? Can you hear me? I'm sorry. Yes, I can hear. Yeah, you can hear. Okay. If they extend it, commodity market till midnight, then we will see a good increase in volume. Because people would like to take advantage of global market trends and all that. We will see less of a gap up and gap down. That will create more confidence in retail that there would not be any overnight cancel risk in equity market. We are very hopeful if at all this time is extended till midnight, we will see a good improvement in market volumes and good participation from retail. On your first question on insurance, Saurabh, please if you can answer that. We already have a very large sub-broker base and a very strong agent presence on the ground. That will obviously help us in building our insurance portfolio. Having said that, our core belief is insurance as an industry will also undergo strong change in terms of making things more digitized over time, and which is where our core B2C app and the focus on consumer value prop will come into play. We'll not be pushing insurance hard like agents have done over the past. I think that is not the core agenda. If that answers your question? Sure. Thanks and all the best. Thank you. Thank you. I would now like to hand the conference over to Mr. Dinesh Thakkar for closing comments. Over to you, sir. Thank you for joining us on today's call. I hope we have been able to answer all your queries. Should you require any assistance, please feel free to get in touch with Hitul Gutka, Head of Investor Relations, or SG&A, or investor relationship advisor. Good day. Thank you. On behalf of Angel One Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.