Ladies and gentlemen, good day and welcome to CarTrade Tech Limited Q1 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements of the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vinay Sanghi, Chairman and Managing Director, CarTrade Tech Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everybody, I want to welcome you to this quarterly earnings call. Thank you for taking the time out to spend, spend this next one hour with us. I just wanted to give you a few highlights of the quarter to start with. We have also circulated and uploaded a presentation. The first part was really the key metrics of the company. We have now 200+ physical locations. In the last quarter, we auctioned at a rate of almost 1 million vehicles a year. Monthly unique visitors compared to last year continued to grow at 34 million unique visitors. The organic traffic continued to be strong at 85%, which is really the strength of the brand and the company. Revenues were approximately INR 107 crores, INR 106.9 crores. adjusted EBITDA touched INR 31 crores, PAT was INR 13.5 crores, and we continue, continue to have, you know, free cash flows as well as a strong cash balance, approximately INR 800 crores. Just to give you context, revenue was about 18%, EBITDA, adjusted EBITDA by 74%, and PAT was almost three times, which is a 307%. If you look at the consolidated, we can pick up the consolidated financials first. As I already said, revenue is INR 107 crores, INR 106.9 crores, which is approximately 18% higher than last year. If you see the total expenses are almost 5% up from last year, which is the reason why the adjusted EBITDA is up by 74%, which shows the leverage in the business. Adjusted EBITDA, EBITDA percentage from 20% last year to 29%. If we take out the other income, it's at about still higher at 12%. As you see here, PBT has grown by 316% and PAT by 307%. On a consolidated basis, we're glad to inform you the profitability has grown, the robustness in the model has been shown. Costs have remained about 5%, which is mostly flat. Some breakup, our standalone business now is 56%, and the remarketing revenue is about 44%. I think that's been a change. And that's been reflected, you know, in the standalone accounts, which is the next slide. As you can see here, standalone revenue has gone up by 28%. Standalone adjusted EBITDA, that's the operating revenue up by 28%. The total revenue is up by 48% on the standalone company. The, the, with that INR 60 crores, the adjusted EBITDA is up to INR 20 crores from INR 8.6 crores last year. It's a 141% increase in adjusted EBITDA. EBITDA margin is a 34% standalone against, you know, 21% last year. If you take out the other income, it's the adjusted EBITDA margin has doubled from last year, 4% to around 8%. As you can see, the standalone profit is almost six times, 6.3 times in PAT, which is at 12.34%, and PBT is about 7.7 times or INR 14 crore. All in all, the standalone financials have been strong for the company, led by 28% growth in operating revenue. I just want to highlight a couple of things here. One is the expenses includes a one-time due dividends cost pertaining to the Sobek Auto acquisition, and that's included in our other expenses. That's number one. Some other key highlights here are in the standalone is that new revenue. Not much has changed in the split of used revenue and new revenue. Still, used is about 17%, new is about 83%. The OEM dealer contribution is pretty consistent and stable. OEM is about 62%. Dealer contribution to this business is about 38%. This is really the standalone accounts. Where we have faced some challenges, which continues to be over the last two, three quarters, is the remarketing side of the business, where revenue over last year has declined by 7%, although EBITDA is up by 11%, and that's partly because of cost reduction of 11%, which will help improve the profitability, the unit economics, revenue still continues to be a challenge there. I think this is coming from what we've talked about in the previous quarters, is the decline in the repossession business. Our repossession business, which from banks and NBFC supply coming from all the, all the various banks and NBFC is down, and it's now 45% of our business. Our fastest growing segment is our retail side of supply to the remarketing business, which has now become 40% of our business. The previous quarter, the remarketing was 55% of our business, come down to 45%. Our retail was 33%, it became 40%. We're seeing a segmentation change, and we're hoping that the repossession also picks up in the next few quarters. At this point, the repossession business is down, and that's actually driving some of the revenues down. All the profitability is marginally getting better. This is the remarketing side of the business. If you go to the traffic on the, on the consumer side, on CarWale, BikeWale, and other platforms, the traffic is actually up from last year, which was at 31.1 million. It's around 34.2 million the same period. It has grown. The auction volumes are down consistent with the revenues being down by 8%, it's down to, you know, in this quarter to an average of, to approximately 272,000 vehicles. Sorry, 250,000 vehicles this quarter versus last year's 270,000, which is down by 8%. On the, on the Google Trends, the brand, we continue to have clear leadership over the competitors. Both CarWale and BikeWale are, you know, several times, or couple of times, in, in terms of Google, you know, brand indexes, on the digital brand index. As you know, 85% of our traffic comes organically, which means traffic we don't pay for. This is the key, you know, few key highlights of the financials and key metrics for the quarter. It's been a strong performance at a consolidated level and a standalone basis. The remarketing business has faced some headwinds, which, you know, we are hoping we will correct in the next few quarters. During the quarter, we also worked on the acquisition of Sobek Auto, which is also, we signed an SPA to acquire Sobek Auto on 10th of July. You know, we, we had disclosed this earlier that we've acquired Sobek Auto, which not only runs the entire OLX classified business, but also their C2B transaction business. We acquired two businesses from them, both in Sobek Auto, and we acquired 100% of Sobek Auto and its businesses. Basically, the OLX classified business is something which, you know, all of us use for selling, you know, a car or a two-wheeler or electronics or any other item. There are multiple, you know, buyers on the platform. Almost 100 million downloads on the classified site, more than 100 million downloads, and that leads to a large amount of monthly organic traffic. Very consistent with our philosophy of, you know, working with strong brands and acquiring strong brands. It's a very strong organic brand as well. We also have a C2B transaction side of the business, which we acquired, which is helping consumers sell vehicles to dealers, in an auction mechanism. Even though we have a very, very small inventory, it generally does not take a position on the vehicles, which is typical to our approach on auctions. These are two business acquired there. Of course, with the transaction, we've signed a separate sales agreement to acquire 100% of this company on tenth of July. We're likely to close this transaction, you know, in the coming few days. And, you know, obviously, at the time of, once we close, we give out a lot more data and details around this transaction itself. But we're very excited about it. It's an acquisition for approximately INR 577 crore, and we're extremely excited about the acquisition itself. We, we feel it'll add a lot to the CarTrade Tech portfolio of companies, which are, you know, CarWale, BikeWale, Shivam Automotive, et cetera, et cetera. This is what I had. I'm happy to take up any questions or clarifications which you might have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 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. The first question is from the line of Siddhartha Bera from Nomura. Please go ahead. Yes, thanks for the opportunity. Sir, I had a question first on this Sobek Auto acquisition. I mean, would it be now possible to sort of share what will be the mix between the classified and the C2B business in terms of revenues? Any update, if you can share on the profitability side as well, maybe for last year, whatever you can share here. Basically, just to understand more about... I mean, we have generally followed a very asset-light approach to businesses, and this Sobek Auto seems slightly more on the sort of asset-heavy side with... Any color if you can share on the current mix and how profitability, how should we think about over the medium to longer term to play out in this business? Sure. Thank you for the question. you know, as I said, because we've signed an SPA, we've not closed, I'm not, I'm not able to disclose, at this point, you know, financial data of the businesses. What I do want to say is that, you know, the very principles of CarTrade Tech around running strong consumer brands, running strong consumer businesses, you know, delivering value to its customers, having good unit economics in their business, is something which will apply to all our companies, not just Sobek Auto. I think what we are pretty sure of or confident of is that, you know, Sobek Auto, with its classified business or the transaction business, will deliver value, and we have, you know, we will obviously want to create strong unit economics in these businesses. Also, you know, maintain our stance on keeping our businesses as asset-light as possible. I think that's something we've been clear, that we're building marketplaces which are gonna have good unit economics and be asset-light in nature. Got it. Got it. Okay, we'll wait for more clarification on this acquisition. On the current businesses now, sir, repossession has been subdued for now quite a few quarters. I think from next quarter, we might start facing some favorable base impacts as well, because now it's been, like, close to a year when we have started seeing weak set of numbers. When do you expect some of these recovery in terms of volumes to play out? Will it happen in the second half of this year, or you think it will- it may take longer now, depending on your visibility at the ground level? You know, honestly, there are two parts to the question. The, the first is the repossession side. It's hard for us to tell, when, you know, when, when that will recover. Yeah, there will be some base effect. The bigger factor is that, you know, the economy seems to be doing well, and financials, financing vehicles seem, seem to have better, you know, repayment, repayments on the loans and, and clearly lower NPAs. That's one of the reasons why it seems the repossession business is lower. It's hard to predict when this turn on this side will change. What we're doing, and I think where we are feeling more confident about, is we're building other segments of supply by force, right? I think that process has started, you know, some time ago. As you see here, even though the repossession falling at an alarming rate, other segments have taken up and filled up the volumes, which is what we are confident about doing, is building our own retail business there, so that the vehicles we bring in are, you know, more than compensating for the repossessed vehicles. If the repossessed supply was to get better, then, of course, we'll be in a much, much better position as well. I think our focus is really not just waiting for the repossession business to come back, but really is about growing other segments of our business, which is actually partly what's the, one of the reasons why, you know, the, the, the business has still been stable, even though there's been a high fall in repossession business. Got it. Lastly, what will be the cost you have incurred for this due diligence, which you have said, it has come in other expenses? Yeah, sure. Aneesha, you wanna just give the number? I think it's approximately ... It's approximately INR 1 crore, Renee. It's approximately INR 1 crore. Yeah. INR 1 crore. The provisions. Okay, got it. I'll come back in with you. Thank you very much. Thank you. The next question is on the line of Ankit Kanodia from Smart Sync Services. Please go ahead. Thank you for taking my question, and congratulations on good set of numbers. Thank you. My question is. Thanks. My first question is related to the acquisition only. If you look at the competitive landscape in the used car associated business, one of our competitor recently gave a chat shop. OLX is also right now selling, and they have sold to us. What is our thinking or rationale behind making this kind of an acquisition? Of course, one thing it is clear is that probably the valuation at which you have got is very good. From a business perspective, looking at the competitors, it looks like it's a very, very, very difficult space to be in. What is our rationale and strategy to take it up from this acquisition now? Sure. We've acquired two businesses. I think the first business we acquired is the OLX classified platform, where consumer like me and you are selling millions of vehicles, cars, two-wheelers, et cetera. It is also, it is actually. Then other items, electronics, you know, to various other, other things. It also has a significant job platform and significant real estate platform. I think what we acquired, the first is the entire OLX classified platform. As you know, the brand of users or the number of users on the platform are extremely high. It gives us strength on having a large amount of organic traffic, in addition to CarWale and BikeWale and the platforms we have. CarWale and BikeWale, a lot of our traffic is, again, organic, as we say, which is not paid for, which makes its new economics and its business, business economics extremely attractive to us. This is being built on great customer experience that they've delivered. I think that's the first reason which we see, you know, the strength in, in the brand and, and the number of users it has. That's the business we acquired, which is completely asset light and not asset heavy, as you know. The second business we acquired is the C2B transaction business, where they sell or auction vehicles or consumers like you and me, who want to sell their car to dealers. There, you know, again, there's, they, they tend to auction it out. It's a very, very minimal inventory, with almost an asset-light manner. Where they're different from some of the other competitors is they tend to be more asset light, number one, and they, they, they tend to have a very large base of synergy or a large synergy from their classified business, because many of the customers who sell the vehicles come from the core classified business. So that's where they're different. We see a lot of synergies in both the classified side as well as the C2B transaction side, naturally. And that's what we believe. We also believe that, because of all the traffic we get on OLX or CarWale, we have a differentiated advantage in the C2B business, right? Which they run the transaction business. So, so that's where we are at. I, I think, I think we also believe that it will take us some time to. It's a, it's a significant, you know, it will be a significant event for the company, and, and it will take us some time to integrate, you know, various things like technology, brand, people, et cetera, et cetera, which is what we are in the process of you know, working through once we close the transaction. Thank you so much. That was really detailed. Just a follow-up on this. Is it fair to assume that given the kind of unique economics on the asset-heavy used car businesses have been, the transaction business which you're talking about, when we integrate the books, I'm not asking you for a exact number, but is it fair to say that again, right now, CarTrade Tech is profitable, but once we integrate this business, probably we again, if you are right in our consolidated numbers? I can't comment on financials at this stage, you know, until we close the transaction. I think a lot of this will give out at the point of, when we, you know, post the closing the transaction. Okay, fair enough. One, one last question. When you are talking about the classified business, means, I'm just clarifying my doubts. You own the whole classified platform, so, like, even if I want to trade on electronics, even that will be now under contract, right? That is the entire classified platform in India is what we signed in contract to acquire. That is correct. Great. Great. Thank you so much. I'll come back in the queue when I'm sure. Thank you. Thank you. The next question is from the line of Vijit Jain from Citi. Please go ahead. Hi, hi. Can you hear me? Hi, hi. My question is, first off, on the OLX classified side, just staying on that topic for a little bit, when we see the financials between Sobek Auto and OLX modified 2022 available, specifically on the classified side, there is two components to that business, right? There's the India business, and then there is stuff that OLX needs to do for the global entity. Is it suffice to say that whatever the disclosure invite everything on the India business is what you are acquiring? Will there be business bifurcation here as well? Because I imagine some of the costs within OLX classified India are also kind of appealing to their global business. We just to clarify, and we clarified this in the disclosure as well, that we bought Sudhir Auto, which acquired OLX India's classified business, and already own the C2B transaction business. What we're buying is a classified business and the transaction business, not OLX's global business. Just want to clarify that. This, I don't reflect or communicate on the financials of the previous year of this. As I said, the way those companies were, we. Well, Sudhir has actually acquired a business, signed a BTA to acquire a business from OLX India, which is the OLX classified business. As I said, I can only comment on the financials once, once we've closed the transaction. Yes. Okay. My second question is on just the timeline business. You mentioned used cars is now 37%, new cars is 33%. From what I recall, last year, the used cars were 16% and new were 84%. Relatively speaking, new car business has been somewhat weak, and is that accurate? The second question related to that is, we know auto industry commentary around their plans for this year and their business for this year, doesn't apply as it is doing now or is likely to go up. There's been news also can be doing to go up. There's been news also can be doing across both, two-wheeler, three-wheeler. Just your thoughts on that new, new, the new vehicles business this quarter and as we look forward into next year? Just so you know, new car revenue is grown by 29%, used car revenue has grown by 33%. I mean, there's not really much change in the ratio, 83, 17, 84, 60. It's just not, not much change, to be honest, in the ratios. Even where there is a market, the new car market actually, that we, you know, has grown in the 1st quarter in India. It's also, not only has it grown, I think one of the problems for not last year, but the year before that, has been that supply has been a problem in the new car industry. That seems to have now gone away, where there is supply and there is demand, and volumes have grown, which is a good position, you know, the market position to be, which is why you see the growth and robustness in growth as well, across in our, in our business as well. It seems to be in a good position in the new car industry by itself. Volumes are up. Supply is better than it used to be. Demand is also good, which is the best place for a consumer and for a manufacturer and a dealer and companies like ours. It seems to be all okay. The used car market also seems to be growing, and, and, and that's where we've grown as well. Yeah, generally around in the car industry, things seems to be quite stable, and seem to be in a position where, you know, seeing even though on last year's higher base, I think growth. All in all, I would say new car industry, used car industry is in a good place in the first quarter. I don't think there's any reason for us to assume that it'll change in the next quarter either, in terms of car market, the new car and used car market. On the two-wheeler side, also volumes have got better, and we've seen reasonable growth on the two-wheeler side as well. Just generally, all in all, you know, we see our traffic going from 31 million to 34 million across these platforms. All in all, this seems to me that the auto industry seems, seems to be having a reasonable quarter. Not a, not a really, you know, high growth quarter, but a reasonable quarter. I think that's what it seems like. Got it. Okay. Okay. My last question, on the remarketing business, what, you know, what has been the growth in the retail segment within the remarketing side in this quarter? If you can give me a broad sense of that. Sure. Let me check this. you know, what I can see, I don't exactly, but I think that you, Aneesha, correct me if I'm wrong, like, the reposition has been down by, like, 25% or so. I mean, I'm not exact sure the exact number, but in that range. The retail has grown. I don't have that exact number, but that has grown about 25%. Is that correct, Aneesha? Let me just check. The retail, it became 20%, you know, that you are right. Yeah. Retail grown more common by about 6%. Yeah, retail has gone up. Yeah. Okay, got it. Thank you. Thank you so much, Aneesha. Thank you. Any participants who wish to ask a question at this time, please press star and one. The next question is from the line of Sachin Dixit from JM Financial. Please go ahead. Hi, [Munjal]. Congrats on the results. Hi, Sachin. Thank you, Sachin. My, quickly a question on basically how is the retail business in remarketing different from OLX's C2B business? Can you explain that, please? Yes. OLX is retail. OLX is auction business, or the C2B business is of consumers like you and me, who want to sell a car. Mm-hmm. Shriram Automall's retail business includes people like you who want to sell a car, but also includes, could be commercial vehicles, could be all types of vehicles. I think Shriram Automall is actually product agnostic. It could be cars, it could be commercial vehicles, it could be even some tractors, or farm equipment. OLX is only cars, consumer vehicles. I think that may be the question. In, in terms of the structure of the transaction, I guess OLX basically buys the car from the customer, and basically they, they have some sort of, bid for the car at the back end from, from dealer. In case of Shriram Automall, you are never buying the car from the customer. You are just, getting the transaction done and taking commission of the transaction. Is that right? In Shriram Automall, when you give a vehicle for auction, the vehicle is auctioned and the seller pays the buyer directly. That is correct. What you say is absolutely correct. In OLX, when they do an auction, the buyer pays them, they pay the seller, they pay the seller. That's the only difference, but they do have a back-to-back auction done against every car they transact. even though Also- ... you know, it's quite similar, yeah, Shriram Automall doesn't actually pay the seller and take money from the buyer. That's correct. Understood. Basically, if my understanding is right, basically, Shriram Automall is completely inventory fee. In OLX, while there is a back-to-back bid, but in case the dealer, runs away or something like that happens, there is some risk. Yeah, that is correct. That's correct. That is absolutely correct. Okay. Okay, good. Coming to basically, our actual business, right? I think that's a business where we, we have seen the following and reading about. All right, you are now buying OLX transactions business. There was a transaction story that you first launched by doing Upshare. Any update on what's happening there? How is it going to work along with the OLX business? 99, Upshare has gone to 99 stores now. It's not, you know, very It's not, the business are not connected with OLX, C2B transactions, because Upshare is a place where people like you and me, you know, can buy a car from, right? Whether online or offline, with the Car, CarWale or Upshare branded stores. And, and, and, you know, if, if you were to acquire OLX and grow the transaction, it will only help, you know, Upshare outlets. In any way, the C2B transaction business and Upshare are not that correlated with each other, apart from the fact that all the C2B vehicles with OLX and auction may be available for actual retailers to buy it, which is reasonable now. Mm-hmm. Otherwise, there's no real link in that business. An actual outlet is really a place where you go and buy a car, right? C2B auction is where you cannot go to OLX and say, "Look, I want to sell my car." It's a little, little different in that sense. I think the C2B auction business is more connected with, I mean, in similarity with, with Shriram Automall than with the car and Upshare outlets. t one final question on my side. Basically, on the OLX transaction, again, that's in the quarter transaction, basically, looking at how the business has grown in the past, right, they started quite close to when the market leader in that business started, but they were, I think, third or at some point, maybe even the fourth best player. Considering that their lead exists in classifieds business, where they are the market leader in terms of user classifieds in India, I don't think that the seamlessness that you talked about, right, that the classifieds business coming, helping them do C2B auctions very well, really played out. How do you think it's going to change? What's different now? I, I don't want to comment on the past, at all. You know, I think the way we look at it is that we are acquiring a classified business where they have tremendous strength in helping consumers like you and me sell something, right? Also a marketplace where a lot of buyers come to buy those products which have been sold. We are very excited about the consumer marketplace or the classified marketplace, independent to the C2B business, which also we're excited about because it gets us a certain sort of auction supply and transaction, which, you know, which is quite unique by itself, getting a large number of cars with similar users to sell their cars to, you know, completely in simple manner, with very high technology being used. One must not also put in, put in account that they've built excellent technology on both the classified side and the transaction side, which of course will be available to us. You know, that's what excites us. The synergy between the classified businesses and the transaction business, supply coming from there, something we'll talk about once we close. Obviously, you know, it's the classified business is a very strong platform and has, quite rightly, I do, I do say leadership in the classified business, whether it is cars, motorcycles, electronics, et cetera, et cetera. We feel good about all of it. I don't want to comment on, you know, what they did in the past or what they exploited in the past or not, but we see an opportunity here. Sure. Thank you. Thank you. Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Saurabh Shah from AUM Fund Advisors. Please go ahead. Hi, sir. For a few questions on the operating business. I just want to understand, so how does it go? You said that the OLX and supply has been more damage, good for all of us. On the contrary, we are seeing a zero in terms of our revenues, first of all. How do you see that growing in the next three years, three years, if you can give an estimate view on that thing? How does the profitability in this business go? Now that our costs are, I guess, more or less incurred, what additional cost will be coming in the picture for the business growth and everything? I think, two things. One is the repo business is down, you're right. The retail business is growing. We see along with retail, adding other segments and, you know, we see a very strong positive, you know, business in the next three to four years. It's a marketplace. DiDi Market is a marketplace where it enables, you know, businesses and consumers, all types of vehicles, to sell their vehicles in an efficient, transparent manner. It would, you know, we auction more than 1 million vehicles a year. We see a very strong business model for the next three, four years. It is possible there is some segmentation change, which is repossessing, being replaced, retail currently in that business. When repossession comes back, of course, Shriram Automall is the place where all these businesses will, you know, come to, to, to sell their vehicles. We feel that. I, I think on the cost side, you see one of the reasons the profitability of the unit economics is better, is because costs have remained flat, you know, in spite of revenue slightly de-growing, right? Therefore, we feel that, you know, also, like any marketplace, most of the costs are incurred, and we feel that as revenue grows, it, you know, a large part of that revenue becomes, you know, comes to profit a little bit better, right? We, we feel very good about the cost structure of the company. I think what we're working on is really growing the retail side of the revenue and other segments of revenue. Okay. What I also want to get a sense is, how is market share growing over the last, you know, past three to five years with, you know, CarWale, BikeWale, compared to Cars24 and now OLX Autos and everyone coming in the picture. Off late, what have been the returns? CarWale, just CarWale, BikeWale, of course, not connected with Cars24. BikeWale is a bike platform, and Cars24 and the others are car platforms, so not connected. Even CarWale is a marketplace. It's an inclusive marketplace where everybody, whether it's people like you and me or whether they're dealers in India, come and sell vehicles and buy vehicles. And it's an independent asset-light marketplace. In a way, Cars24, the way the model works is an asset-heavy auction business and asset-heavy dealer, right? They buy vehicles and sells them to dealers or the consumers. They're almost complementary and not competitors. Market share is hard to compare, but because you can't compare market, so almost complementary to CarWale, where even today, Cars24 lists vehicles on CarWale also. They're almost customers of CarWale. They're not competitors. I think a lot of people feel that some of them are competitors, but as I said, they're quite complementary in nature to what CarWale does. I just want to clarify that. Yeah. Okay. In case if you can just give a sense in terms of, earlier, what was the earlier traction in terms of an offline model, whether dealer used to be some dealers, B2B, that we used to buy and sell cars to, you know, consumers. What has that trend changed from offline to online? What type of conversion do you see in that? There's no change from online to offline. I think the way the used car market is structured is that, it is, it is even now, mostly dominated or controlled by fragmented dealers across the country, many thousands of fragmented dealers. I think, I would still think about, you know, 80%, 90% of it is, is mostly the small, fragmented dealers. I, I think what's changed in the industry is that the platform like CarWale and others, the dealers have become more tech-savvy, and the mode of acquiring a customer. Earlier, you have to walk into one of these outlets and buy a car, find a car. Now, you will come to CarWale and try to figure out which car to buy, and then walk into one of these dealerships. CarWale has become the destination for, like OLX, the destination for many of these dealers to find customers who sell cars and buy cars, too, right? That's how they compete in these platforms. The, the customer mostly still goes physically to the dealership, chooses a car, and buys it. But, but what CarWale and BikeWale and OLX have become an integral to the dealership network of used cars to really get customers to that outlet. A large, large percentage of all used car buyers now would come online first, find their car, and do all that work. Then when you look for a certified car and then physically go into a dealer and buy the car. Okay. Thank you. Yes. The next question is from the line of Rohit Mehra from SK Securities. Please go ahead. Yeah, thank you for the opportunity. In the last call, you mentioned the CarWale signature outlets in addition to or in place of CarWale actual outlets, and the number is for your 90 outlets. How many outlets do you have now, and how do you see it ramping up? As I said earlier in the call, the total calls are 99, including CarWale Signature and CarWale abSure. You know, we continue to add, you know, outlets on both the Signature side as well as the abSure side. A large percentage are still CarWale abSure side, dealers, but we continue to add both. We feel good about the rollout. We also, you know, are quite happy with the customer value proposition and the customer service delivered by the outlets. In terms of our total percentage of business to our total overall revenue, this is small, but it is growing, and it's actually been one of the big growth drivers for us already in the last year, even though in percentage terms of our total business, it's quite small. We feel very good about the whole CarWale Signature and, and actual locations. Okay, perfect. Secondly, on the CarMela organized in Bareilly. What is the rationale behind this type of event, and, will there be other such events, will be organized? You know, we do many some below-the-line activities, you know, which are regularly done, across, and I guess you can do the very small below-the-line marketing activities, actually. I think the one in Bareilly, but there'll be others as well. You know, this is tactical and below the line. Okay, that's answered my question. Thank you. Thank you. Thank you. The participants who wish to ask a question at this time, then you please press star and one. The next question is from the line of Neha Kumar, as an individual investor. Please go ahead. Hi, sir. Thank you for the opportunity and congrats for the good set of numbers. My question is, since we are mostly through this acquisition decision of what to acquire, which was long pending, and I assume that it will take one to two years to integrate the business. We will still be left with around INR 600 crore, and since CarTrade is already generating positive cash, any shortfall for running this new business can be met by that. If my understanding is correct, can we expect board to expedite the buyback decision and the share buyback? It's been long due that investors have actually got something out of it. It's something we, we discuss the board and, you know, we want to first close this transaction, and at that time, you know, we'll go back to board and reassess whether it's possible or not, right? Look at whether, you know, whether we can grow this company or not grow this company. It's something we'll take back to the board. I think the first part is just close this transaction. Okay. Because otherwise, again, this, additional INR 600 crore will be lying in our balance sheet, and balance sheet has cash since last four, five years. That is something I think the street is not appreciating, having such a high amount of cash on balance sheet and earning 6% around yield is, you know, counting our return on equity. I understand. We'll take this feedback to the board and, you know, and take it up in the due course. But I think the first priority is to close this transaction. Yeah, we definitely take this feedback. Okay. Thank you. Thank you very much. Thank you. Thank you. The next question is from the line of Naresh Mohanta from Securrent Investments. Please go ahead. Thank you for the opportunity, sir. Most of my questions have been answered. Just one question. What was the in-shop cost for us during the quarter, and what do we estimate for the entire year? In-shop cost, I think, for the quarter was broken up. I'll just read it out exactly. As you see, it's gone down from the previous year. For the quarter, INR 4.63 crore, which was INR 5.3 crore last year, so it's down by 12% for the quarter. We estimate it will be in similar lines to the first quarter, Nishan. Would that be correct? Yes. Hello? Yes, sir, ma'am. Got it. Yeah, that's INR 4.63 for the first quarter, which is down 12% from the previous year. Okay. We are planning something around INR 16-17 crore for the year? Yes, I think we estimate it will be that range. That's right. Oh, oh, thank you. Thank you. Next question is from line of Ankit Kanodia from Smart Sync Services. Thank you for allowing us on here. In one of the participants, question you answered that, in case of, the oldest transaction business, which will be, you purchase the vehicle from the customer, and then, there is a back-to-back arrangement with the dealer, who then purchases from you. Any ballpark number, I mean, in terms of how much do you think, and how many days, the inventory lies with us? Anything. The, the inventory is very, very short and, and, and, and it is, it is auction, so it's, it's, it's in that sense, completely, where is the buyer on the other side? It's auction. The seller vehicle is auctioned. More for convenience for sellers and buyers, we, we take, take, pay and pick up the vehicle and go to the dealer. The magnitude is very insignificant, very small. I, I will say I can't give exact data, but we will at closing, you know, give out some of the data. You mean to say that only when you have a clear-cut transaction with a dealer, you then go and pick up the vehicle from the customer, right? That is correct. The vehicle has to run an auction before that. Okay, okay. My next question is, in our, CarWale platform, where we have dealers on board on our platform. In our channel case, we got to know, from some dealers, I don't know whether it is correct or not, and please correct me if I'm wrong, but they also get free leads. Is it like, possible for them that, some dealers get all the leads? Free? Free leads. Like, I, I understood that it's a paid platform where they pay a fee to be every year, and then they get leads. New car dealer or a used car dealer? I'm talking about new car and used car both. In new cars, you have to pay dealers. In used cars, it's possible that very small dealers register as individual. It is possible to register as an individual, but if you are a registered dealer, you are paid only. Okay. In, I'm not, I'm not sure. Maybe in very small cities where we've not launched paid, you know, BC class towns, et cetera, it's possible there. It's possible. Yeah. I'm, I'm talking about a small city only, a small city. If it's a very small city, it is possible. It is possible. I'm not exactly sure which city, because there will be some long tail cities where we've not started paid as yet. It's possible. Okay. Thank you so much for clearing. Thank you. Thank you. Thank you. Anyone who wishes to ask a question at this time, then please press star and one. Next question is from the line of Govind Alagi from Natverlal & Sons Stockbrokers Pvt. Ltd. Please go ahead. Yeah, thank you so much for the opportunity. My question is about the commission on auction selling of cars. Like, any rough idea about how much% you are charged on selling those cars? Can you also provide us the percentage revenue split between different verticals? No, I'm not going to provide at this point the vertical split, but roughly I think the takeaway ratio is about 4%. Correct me if I'm wrong, approximately 4%- Yeah. on, on auction level. Okay. Okay, the second one is, can an EV penetration, specifically on two wheelers, affect the business of BikeWale vertical like going forward? The, the penetration of EVs is very slow to the total volume in India at this stage. It actually doesn't affect us either way, whether a vehicle is, you know, an ICE, you know, or an EV. It, we're quite indifferent to it. Either way, you know, manufacturer, the dealers have to sell the vehicles on platforms like BikeWale or CarWale. It doesn't really matter whether it's ICE or EV to us. Okay. The third one is, and, so do we expect the same operating leverage on the business, like provided the employee cost and the product development cost? Like, will more or less remain the same or perhaps reduce further going forward? Yeah, we... As you've seen last year, the results of the company standalone, as well as in marketing and consolidated, and this year. For us, increase in revenue is, is, is a lot of contribution to our, you know, unit economics and profitability. It's just the way it's architectured. Asset-light businesses where, you know, our costs are stable and increase in revenue will result in profitability. We see this, that's just the architecture of our business. Yeah, we see it this way. Okay. The last one is, relying upon, like, multiple business model like B2B, B2C, C2B, so that could be like, a stable business, like blueprint going forward for exponential growth potential? Yeah, we, because, because of our customers we have on CarWale or on some of our multiple sellers and buyers, we tend to be across segments. Also, we're a very open marketplace, so you can come and sell a car on CarWale, you can come and buy a car, car from CarWale, new cars, used cars. On Shriram Automall, we cater to retailers, people selling their vehicles. We cater to big businesses selling vehicles. Yeah, I, I, I think our, one of our goals and aspiration is to be the marketplace for the entire automotive industry. That's how, you know, we feel that many of the buyers and sellers build a network effects on these platforms, which is why, you know, we see it, being in multiple segments is correlated a little to growth rate. That is correct. Okay. Lastly, I want to know the accuracy rate of your ERP tools. Sorry, rate of? ERP tools. Like, you are providing the inspection ERP tools, right? We provide ERP solutions to, Like, dealers on our platform can use our management software to run their business. What did you ask? What is the question? I want to know the accuracy rate, like how accurate is that, the whole inspection go, go behind in that ERP? No, so you mean the, the, the price tool, the used car price tool, is that what you mean? Yeah, yeah. I got it. No, no, of course, we think it's accurate, but it's, it's something which is used by all consumers. If you are coming, if you are on CarWale today, and you want to buy a used car, against almost all cars, we provide what we think is the right price for that car. It's done by a lot of data science amongst, you know, figuring out what, you know, prices cars are sold in India, bought in India, and then we come out with, you know, price tools. We believe it's quite accurate, and it just depends on what the user wants and, you know, wants to see. Okay, okay, then. Okay, sir. Thank you so much for answering. Thank you. Thank you. you. The next question is on the line, Sachin Dixit from JM Financial. Please go ahead. Hi. I had one more question regarding the cost items. If I look at employee cost, excluding this expense for this quarter, they have grown on 8% YOY. Similarly, if I look at other expenses and I remove the effect of the deliverance cost, they have still de-grown YOY. How should we think about steady state sort of growth in these cost items, right? Do you grow at 10%, 20%? How should we think of it? Yeah, normally you think that that will be the growth rate, you know, that's what we think will be the growth rate as well. I think we've also gone through a quarter where, you know, Shriram Model has really been, you know, slightly lukewarm, and I think that's part, part of the reason why cost escalation also has not taken place. But yeah, you know, the nature we see our revenues over the last three quarters, four quarters, and model remains the. Oh, sorry, the costs have remained very stable. You know, as I said, we business tend to be that costs are stable and our basic push is to increase revenues always, right? Fixed costs should still increase at, what rate is whatever term down effect? I, I, I think normally, you know, wage inflation, wage inflation rate, I mean, our manpower increases are, are, are based on just, you know, mostly on a very conservative basis, because for increasing revenue, we not necessarily have to increase manpower in some of the businesses. Mm-hmm. It tends to be inflation, more incremental than increments in inflation in nature. Some increase, but not com- if we increase our revenue by 100, doesn't mean we need to increase the cost or manpower by equal number, right? I think it just tends to be naturally, that's the leverage in the business platform that are showing. If we exclude any potential impact of the OLX transaction coming in, how should we, what sort of steady state EBITDA margins would you forecast the business to reach? If you see the last four quarters, I mean, we see last year, this year increase. In every... We, our country's effort is to increase our EBITDA margin benefits, right? We're still far from, you know, best in class, we effort is to our revenue increase over the next few quarters or next few years to be best in class in EBITDA margins. I mean, the model right now, if you look at, we're at about, you know, on a consolidated basis, we're about 29% EBITDA income, 12% without it. The last quarter, we were at almost 20%, which is much. Than last quarter seems to be the highest always, right? Because the cycle thing is in the business. Yeah, the effort is to, you know, you know, get to best in class and just keep doing it. The reason I was asking was, like, probably here in China, Autohome had EBITDA margins of 40%-50%. Is that something that you aspire to, or do you have the ambition of potential to? Absolutely aspire to. Absolutely aspire to. Absolutely aspire to achieve. If you're already at 20% last quarter, I mean, in, in January, right, I think we definitely wanna, in the next, whether it's, whether it's one year, or two years, or three years, aspire to get to those kind of margins. I, we asset light in nature, so as revenue grows up, we'll get there. I mean, I think that's more a factor of revenue growth than cost control. That's good. Thank you. Thank you. Next question is from the line of Raghav Behani from Citi. Please go ahead. Yeah, hi. I want to ask about the INR 40 crore intercorporate loan, which was disclosed to the stock exchange today. Can you highlight what this loan is about? Sure. It's an enabling solution. We haven't yet, actually, given the loan. It's enabling solution is that when, when and if, if we close the OLX transaction, we will give an intercorporate loan, which will to a company called Bizloan, which gives loans to dealers who buy on OLX. I think that is the intent. It's more co- intercorporate loan. Bizloan gives or lends money to many OLX dealers who bid on his platform. That's the intent here, to grow the OLX transaction business. This will be done only post-closing of the transaction. It's just an enabling resolution, and since, you know, it is material and to be disclosed to regulation, we disclose it today because our board is approved it. As I said, this transaction will, or the loan won't be given until we close the OLX transaction. Sure. This would basically facilitate dealers to make the transactions, and from what's given in the disclosure, it will be, you know, there will be, it will be against the receivables for the dealers. It will be securitized by the receivable dealer. That is correct. Yeah, yeah. Okay, sure. Okay, thank you. Thank you. Ladies and gentlemen, due to paucity of time, that would be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you. Over to you. Thank you, everybody, for joining this call, and I look forward to catching up soon. Thank you, everybody. Bye-bye. Thank you very much. Ladies and gentlemen, on behalf of CarTrade Tech Limited, we conclude this conference. Thank you all for joining us, and you may now disconnect your lines.