Ladies and gentlemen, good day, and welcome to CarTrade Tech Limited Q2 and H1 FY 2024 earnings conference call. 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. 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. If you wish to speak or need any assistance during the conference call, please signal an operator by pressing star zero 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 for CarTrade Tech Limited. Thank you, and over to you, sir. Thank you. I want to welcome all of you to this earnings call for CarTrade Tech. It's been extremely exciting quarter for us, whereas we've earlier announced, acquired OLX's business in India. And obviously, we are pretty excited about the future potential of that business. Some of the things we talked through today and compare some of the numbers, they may not be all comparable, just because there's been 50 days of OLX's operations in our financial statements. But we'll try and clarify, you know, through multiples, you know, reports, try and clarify all of this to you. So, you know, once again, thank you for joining. I want to go straight on the, on the presentation we have shared to, you know, page number five. I just want to highlight, we've seen a 44% growth in revenue in the quarter, and our profit after tax has grown to 132%. We continue to be the number one portal in India. We're also now, you know, one of the leading classified businesses in India. 70 million MAUs for the month, monthly active users, across OLX, CarWale, and other platforms of ours, more than 100 million downloads. So it's a really... I mean, all our platforms are strong, strong brands. And, and the great part about all these 70 million MAUs, 90% is organic, which means we pay very little marketing costs to bring these users on board. A lot of it is just brand and, you know, brand and relevant search. We have 350 physical locations now, after the OLX acquisition. So Automall, abSure, and OLX stores make up these 350 physical locations. 1.2 million vehicles, you know, at a run rate of 1.2 million vehicles we've auctioned through last quarter. Revenue jumped up, of course, to INR 148 crores in the quarter. This is net revenue. This is not GMV or, you know, turnover, it's just net revenue. EBITDA is about INR 22 crores for the last quarter. PAT is about INR 13 crores, and we continue to be strong, you know, had a strong cash balance, almost INR 700 crores, and of course, debt-free. If you go to the next slide, which is slide seven, which talks about consolidated results till September twenty-third, this including OLX. So the growth for the first six months is 32%, and quarter-over-quarter is 44%. Of course, there's some OLX numbers in there. EBITDA for the six monthly, it's 8%. Quarters is slightly weaker, it's 4%, but there's some OLX numbers in there as well. EBITDA is up 78% for six months and 13%, you know, quarter-over-quarter. And again, that's a factor with some consolidation-related costs there. And PAT is up 132% versus 200% for the six months. So that's slide number seven. If you go to the next slide, which is really without OLX, and looking at the three-month and six-month performance. Revenue has been tough at about 9% in the six months and three months, and that's been at the back of Shriram Automall. The remarketing business, you know, having a flattish period as we keep talking about in the earlier calls as well. So the net revenue has grown 14% six months, 9% quarter-on-quarter. Adjusted EBITDA is up 31%, six months and about 6%, quarter-on-quarter. And that, and in that, there has been some cost related to our diligence of OLX as well, attached to the one in the quarter. And definitely, EBITDA is slightly lower. EBITDA is up 26% and 88%. And of course, PAT is up 164% and 218%. So all in all, you know, you know, CarWale or the consumer group has seen some level of growth. Shriram Automall has been slightly muted, the growth has been flattish. And the OLX numbers have added into the quarter, showing a largish growth for the business. If you go to the next slide, which is standalone results for the quarter and for six months, which includes mostly the consumer business, CarWale business. Six months growth is about 25%. The net revenue from operations for three months is 22%. EBITDA is up 55% for six months, 9% for the quarter. Again, you got some costs, one-time costs built in or related to diligence on the acquisition. The adjusted EBITDA, if we take out other income, has been up 26% and 51% for the 6-month period. You look at PAT is up 36% and 166% for six months. So if you look at a PAT of 36% on a standalone basis, I think a big factor here, the growth will be even higher, because last year there was a INR 6 crore dividend, internal dividend from Shriram Automall to CarTrade Tech, and that's in the comparison is showing 36%, will be much higher if we normalize it for the dividend, it comes to almost 1,000% growth in PAT. So, that's the standalone results. The next slide is the remarketing of consolidated results of Shriram Automall. And that's where you see 2% growth in the quarter, -3% for six months. EBITDA is also 3% growth for quarter and and +60% for six months. Overall, you know, flattish PAT, NPAT is slightly down, but flattish PAT down 3% for the quarter. This is really the concern for us still, where we feel now, you see the quarter revenue and EBITDA seems to have bounced about, you know, from the last three quarters. Even here, where we talk about the repossession business coming down. In fact, the repossession business has now come down to a share of 48%, 57% last year. So 48% of the business is repossessions, which was 58%, 57% last year. So it's 57% of our total volume. The repossess only is 38%, and our retail business has gone to 38% from 31%. So as our retail supply to Shriram Automall goes up, the repossession business is coming down. If you go to the slide on OLX, and I want to spend some time here, as we discussed in the call earlier, when we acquired Sobek Auto, which owned OLX's classified business and OLX's C2B transaction business, we bought two businesses, within the same company. The classified business, you know, in the last quarter has shown a revenue of INR 23 crore, but this revenue is only for 50 days, and a profit of just PAT of INR 10.6 crore. So it's a high-margin business for us, and as I said, this is only for a 50-day period. On the other hand, the transaction, C2B transaction business on a revenue of INR 12 crore has shown a loss of INR 13 crore for the same period. So, the classified business showed a profit of INR 10 crore, the transaction business showed a loss of INR 13 crore. As you may have read in our public announcement and statements a few weeks ago, and as we even talked on the call earlier, we have now, you know, in the last two weeks, shut down scaled down the transaction business. And obviously, therefore, in an attempt to do two things. One is focus on the classified business we remain extremely optimistic about, which is having billions and all those 34, 35 million unique users per month and, and has a strong, strong presence in the market for used cars to other products and goods. And therefore, classified business is something we want to continue to invest behind and back, and we have scaled down or brought down to zero, the, the, the C2B transaction business in an attempt to obviously bring down the the, the, the loss-making part of the acquisition. This, this has already been initiated, and I believe in this quarter it will completely be, be done. In order to bring it down or close it, there may be an approximate cost of INR 25 crore, one-time cost, to you know, you know, to, to shut down the business. And I think what would... The normalized business or the normalized financials of business will really come in from the Jan to March quarter after this one-time cost has been incurred, where the classified business and its unit economics and the growth from there will continue to work. So I think this is something which we've indicated in the past and now in the process of completion. And therefore, this acquisition, which had two parts of it, the classified business and the transactions business, will now only have a classified business and which has an automotive side to it and a non-automotive side, and we're extremely excited about both those sides, businesses. We continue to now, which is what we continue to invest behind and grow. Obviously, as you can see in these numbers, this is the profitable side of the business, and the intent was to bring down the losses from the loss-making side of the business. And, as I said, by December end, you know, this action should be complete. Also, what we indicated in the last call was that we have a one-time tech cost, approximately, you know, INR 10 crore per month. We had indicated that it might take us six months to do the entire technology transfer to the part of our, you know, purchase contract, to get the entire tech transfer over to the six months. We feel that, today, that is likely to happen three months before schedule, and rather than incurring a 6-month cost at INR 10 crore per month, which is again one-time, it will be only for three months. Therefore, from January, our tech cost will also dramatically come down. So we feel good about the fact that the losses in the transaction business, where we incurred some one-time costs this quarter, in the October to December quarter, would come down in the January to March quarter, as well as the one-time tech costs which were being incurred from October to December, will probably not spill over to January and only be three months. These are the two major, you know, points of announcement on the acquisition. As we continue to, you know, look at the acquisition, work on it, with the teams there, we seem even more excited about the acquisition from what we were when we assessed it. So we, you know, we continue, as I said, we continue to invest behind the classified business and continue to grow it. I wanna add here that, within this, the Sobek Auto acquisition, the classified side has a huge used car part. As you all know, CarWale is the other used car classified player in the country. CarWale, of course, as you also know, is 84% new and 16% used. And OLX's used car side is very, very significant to the entire used car industry here. So we feel really, really excited about the whole OLX classified business.... This, this is, you know, on the next slide, you have Google Trends, and as it shows, CarWale continues to be well ahead of its peers. We've also this time given Google Trends versus its other competitors ticker, and you can clearly see where OLX stands 68 to 1. Clearly having a leadership in the whole classified space, automotive and non-automotive. So, you know, this is what I wanted to highlight. I'm happy to go into a Q&A or a question and answer session to elaborate or clarify any doubts on the financials or the acquisition, of, OLX in India, and solve all your doubts in session. Thank you so much. We will now begin the question and answer session. Anyone who wishes to ask a question, you press star and one on your 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. First question is from the line of Sachin Dixit from JM Financial. Please go ahead. Yeah, and congrats on closing the acquisition successfully and also- Hi, Sachin. Thank you. Actually, I want you to understand, in the P&L that you have shared for OLX, did the product tech expense start right now? You know, in the last quarter, we didn't have this global product tech cost till September, and it was very minimal, so therefore, there was a very minimal cost. As I said, in, in the last call, it'll come on first October. And we, and we actually originally anticipated it will take us a month from first October to first April. But, you know, because of the process, the progress we made, we believe it will only be for three months. It is not really there in the P&L we shared, because it didn't exist at that time. It's not there in the last quarter. Understood. It's very minimal. It's very minimal amount, it's, it's not significant. It will be this quarter, and then it should light up. Yeah, it'll be a one-time INR 30 crore this quarter and, you know, so this quarter with INR 30 crore of tech cost and some shutting down costs, is gonna be up to extraordinary items. But yeah, from first April, the acquisition, you know, will be absolutely, of course, the one-time shutting costs, as well as, the tech costs will come down dramatically from there. You know, and I wanted to add here that, although we clarified this earlier, that when we acquired the company, for consideration of INR 523 crore, you know, some of these things were known and were almost considerations made at the time of purchase. I think you meant from January 1 they will be INR 90 crore, right? Yes. We, we originally thought it until Fourth April, but now it's only for January. Yes. The INR 25 crore one-time cost that you just mentioned, Yes. Does it include this tech cost or it's on top of it? No, no, it's, it's not. The tech cost has nothing to do with this. So the tech transfer cost and tech migration is on the classified business and the transaction business. This one time shutting is just shutting the transaction business. I mean, it's various contract termination and et cetera, et cetera. Any inventory losses or anything that might come up because you might be liquidating some of the vehicles, This all is in that, is all in that INR 25 crore we've asserted to you. you. It's all in there. Great. Yeah. Sounds good. Just one more question on the piece of, the business, right? As you mentioned, like, it looks like it's bottoming out. You might have seen some data for the last 1.5 months as well, where it is tracking. Secondly, when you say retail for business, does it only have individuals or just like anyone who is not an OEM organization? Sure. So the repossession business, you know, to be honest, is last quarter has been flattish over the previous year, right? A little bit. So what's clear is that it's bottoming out, but it's not clear it's growing. That is the difference. And you know, whether it takes one month or three months or six months, it's hard for us to say at this stage. It's just that it seems like the asset quality of people lending in the automotive sector is just what... It just seems like that. Now, is that a reflection of the, you know, the industry at large? Is it a reflection of the company at this point? You know, it's hard to tell, but that is the reality. So we've actually focused a lot on going on the retail side, which is the second part of your question. In fact, supply comes from individuals like you and me. It comes from, you know, small operators, but it's basically, you know, most people, one vehicle being brought in at a time. Not like an institutional client is may give us 2,000 or 1,000 or 500 vehicles a month. Not like that. Sure. Just one final question on, on the OLX. Again, is there any color you can provide on the historical? So I know you guys have provided previous quarter for which you consolidated, but we don't have any context. Yeah. Sorry, you mean by historical on what? I can, but what - historical what? For OLX business, like, how did this business do in the last year, I mean, whatever period you provide? So we've actually, the numbers we've given you in the first two months, and we've also given some rough run rate projections of the business in July, right? When we acquired the company. You know, the classified business, roughly at that time, we had given you across about INR 170 crore-INR 180 crore revenue a year, with a standalone, without tech built-in cost of INR 110 crore. And that's just the historical way it's been. What we want to do, obviously... And then there was the transaction business, which had a net revenue of about INR 100 crore, a little more than that, and a loss of INR 100 crore, right? So giving the tech cost below this. So what we've tried to do is say, listen, it's really hard to fix the unit economics of the transaction business, and therefore, we're willing to forsake that INR 100 crore revenue and the INR 100 crore loss goes with it, right? So in a way, it leaves us in the classified business with a profit. And to be honest, that's one of the reasons we acquired the company, because we're really excited about the classified business. And within that classified business, a very large part of it is used cars, right? Which is what we obviously, the used strategy for us as a business, which affects all our other businesses as well. Now, what is over and above that is there's going to be some tech and corporate overhead which will come into the classified business, which was being charged to the transaction business. And a lot of this will get normalized on the January quarter, because in this quarter, we've had two one-time costs, right? This tech transfer cost, which is completely to do with transfer of, you know, the tech platform due to the acquisition and the one-time shutdown cost of the transaction business. Does this answer your question? I basically want to color on previous years, right? So just for how that happened historically, that's what I meant. So, some of this hard question, because we actually bought the classified business in a business transfer contract. Sure. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press Star and One on your touchtone telephone. The next question is from the line of Vijit Jain from Citi. Please go ahead. Hi. Congratulations. Looks like a decent growth across core businesses as well as congratulations on the OLX deal again. But the question is, first, you know, I'm just curious, was this always a plan when you were acquiring the company, to, you know, take a hard look at the used car business and shut it down? And was that... I'm just wondering, was that something that came from process that you had to consider or buy both the businesses together? That's my first question, and then I have a couple of further questions. Sure. No, I think when we bought the company, we looked at the classified business, which we were really excited about, and it had a used car, used cars website, which was hugely synergistic. And then they had this consumer to business transaction business, plus loss-making. But they were pretty good at it in terms of customer experience and many other parameters and metrics. For us, when we bought it, of course, we obviously had two, three choices. One is to buy it and fix it, the unit economics, to scale it down, bring down the losses, and the other, shut it, right? I think we did think of all these three things over the last 3-5 months. Eventually came to the conclusion that this is going to be hard to fix, the way it's run now. Not to say here we're not running a C2B business. It's just that we don't want to run it the way or follow the processes which were being followed in the past. You know, we still think that there's a huge C2B part in India, the consumers want to sell cars. And I don't know whether you know, but OLX is probably, it is the largest platform the car sellers use to sell their cars, even today on the classified side. You know, millions of people list their cars every year to sell it on OLX. It's the number one platform for car sellers. What we could not fix is the C2B auction model, right? Which is auctioning these cars out. It, we continue to be a C2B business and even C2C business in the classified side. You know, as time goes on, we will look at how we can continue the C2B business in a different form. It's just that we didn't think that this model, the unit economics, could be fixed at all. And actually, this is not just us, it came from the team at OLX, too. Got it. My next question is, you know, it's a slightly different variation of, I guess, what Sachin was trying to ask, but just trying to get a sense of what the underlying growth in this classified business is for you. You know, like, you give these metrics around users, unique visitors and engagement and those kinds of things. What kind of metrics should we expect to see on the OLX side of the business and the growth trend? I also have a question that I would like to ask on the margin side. Maybe you can answer this first. Yeah, perfect. So for us, you know, when we look at the business, OLX has had the classified business. So I don't talk about transaction business growth because it may not be relevant anymore. Even though it had rapid growth, it may not be relevant anymore because it doesn't exist now. If you look at the classified business, that they had reasonable growth in revenues and growth in profitability over the last 3-4 years. As I said, these numbers is a DK, so we don't have the audit trails to check it. It was transferred, it was sold in a business transfer contract. This is one part of it. The second part I want to highlight here is we remain extremely excited about the used car classified side, which we believe we can grow to... We can keep growing over a long period of time to OLX being the leading player in the country. OLX is on multiple other categories like real estate, electronics, mobile, two-wheelers, which also were extremely dominant categories. Because actually, if you want to sell something in India, outside OLX are very almost no other platforms in India. So, so we feel there's a huge monetization opportunity, and, and that's got nothing to do with the past. It's just what we believe about OLX, right? A revenue of INR 180 crore or INR 190 crore of classified revenue, we believe there's a rapid growth capability out here itself. So this is one part of it. The second part of it is, I think when you look at CarWale, SAMIL, you know, both the companies, they tend to grow over the last few years, about 20%, 25%, you know, net revenue and profitability may be slightly higher. We believe that now we've bought something which is almost 30% of our size, right? Automatically. So in a way. If you look at the revenue of the business, it goes up by 40% automatically on day one. Our question now comes around, there's going to be some focus around the unit economics of the business and the margin structure in the business as well. So not only are we seeing that OLX will help us grow revenues, which it already has, and will continue to do so by growing itself as well. SAMIL will go into it as well, and so will CarWale. But we also believe that the combined unit economics should get better and better every day. So it's like almost growing OLX, growing the combined entity, growing just because of the acquisition and OLX's growth, and CarWale and SAMIL's growth, but then getting the unit economics and margins to improve in all these businesses. And OLX's nature of business is very similar to CarWale, where, you know, increase in revenue does not lead to an increase in cost. The metrics to measure would be things like traffic, of course, related revenue, EBITDA, profits, all the same metrics you already look at CarWale. Very similar businesses. One is just a horizontal and one is a vertical business. Got it. My last question is, so in the classified finances that you guys have shared, we see the EBITDA margin is 47%, and you are reporting INR 10-11 crores of profit for the fifth AP, right? Right. So if I'm just going to be a bit approximate, maybe 9, 8, 9 crores of EBITDA on a monthly basis, versus the PDT cost that you say you will incur of about INR 10 crores per month in the next three months. It's only three months. This is actually... And I'll explain this, right? This is only because the tech is being operated in a global OLX platform, not in our own environment. That transfers on thirty-first December, and therefore, it's a one-time cost, which was supposed to be six months is down to three, which we had committed to incur on as part of the purchase transaction. Yes, so but- It doesn't mean we'll incur that cost tomorrow. That's my only point. Yeah. So my question then was, what should we think of as, more run rate once, January comes, is the margins in the 20% handle, you think? So INR 10 crore of EBITDA minus, say, INR 5 crore of PDT in your own hands, and so you get, like, 20% handle on margins? Yeah. It may take some time. I'll be honest, it may take some time, the full transfer. We do anticipate that, there are two things which will happen. One, the PDT cost will come down dramatically, I would think, probably, probably between 30 and 50, sorry, 40%-50% of what we are. Number one. It's hard to put the estimate because that transfer has not fully happened. The second, thing which could happen is that there is some corporate overhead going to come here, because they're all sitting in the, in the transaction business. We want to continue investing. See, if you were not going to invest in OLX Classifieds at all, then what, then what, what the investment would do this? But we want to make sure there's a vibrant product tech team, management team, adding to the team to make sure this run rate revenue grows at a rapid rate. We don't want to keep it dormant. We believe in this business. And so there is some investment in overhead, which we'll do in this business. But that will be... The overhead will automatically start paying for itself very quickly. It might take two, three months, but very quickly start paying for itself. Not that we anticipate losses at all in the next quarter, but the profit might be a little more muted than you think it is. That's what I'm saying. Got it. Thanks. In the very short term. All right. So the very last question, Vinay. If you can, you know, from an overall company perspective, give some color on product roadmap, product development in the next one year, post this acquisition. Not just for OLX, but also for CarWale and everything. And related to that, I suppose, the auto cycle seems to be recovering. Are you seeing signs of growth in your own business? I think the auto cycle is recovered, I wouldn't say recovering. But to be honest, what I think our focus, and I'm just looking at OLX as well as CarWale. CarWale is 84% new, 16% used. OLX is 100% used in everything. In auto bikes, 100% used, almost 40-45% is used cars. For us, our number one focus here, between CarWale and OLX, we have a very high share of used classified business. Our number one objective on product development and capability again, is really to start growing the used classified business on both sides, CarWale as well as OLX, and product related to that. So on the CarWale side, you always trying to get closer to the transaction, more on, you know, moving from a place where you can just find your car and select your car to really buying a car. That development is underway and continuously making improvements on that on every side. I think on OLX, too, I think we're going to go in and invest product capability, not only used classified side, but OLX is very, very strong on two-wheelers, electronics and mobile phones, real estate, et cetera, and start looking those categories to, you know, have, you know, disproportionate growth in them as well. So, you know, right now, as I said, we're setting up these product teams in OLX. There are about 44 people in the product team right now. Setting it up, and, you know, once the tech transfer is done, we should have a good product team out there, which starts, you know, building differentiated, cutting-edge technology for OLX many, many years to come. Got it. Thanks, Vinay. Those are my questions. Thank you. Thank you. Ladies and gentlemen, if you do have any questions, please press star and one on your touchtone telephone. The next question is from Siddhartha Bera, from Nomura. Please go ahead. Yeah. Hi, Hi, sir. How are you? I'm good, sir. Wishing the best to you and the team. Thank you. Sir, I just wanted to check on this improvement in the unique visitors we have seen in this quarter. It's been quite an improvement over the last quarter or so. Any thoughts on what is driving this? Given this backdrop, do we expect that the revenue growth trend which we are seeing in the standalone business of course, for quite some time now, that can have some upside here also in the medium term? Yeah, the growth rate seems to be this, the last, you know, two quarters. The last for last year was much higher. But generally, you know, this is the growth, you know, of the, the new car, you know, CarWale, which is 84% new cars. I think what I said earlier is we feel like, you know, actually, new car business has been pretty strong in the first six months of the year across the industry, and supply seems to be good. In fact, there was a period a year and a half ago where supply was more than demand. Today, demand—supply is good and demand is as good, actually. So it's, it's a very good place to be in the new car industry for, for everyone, including us. There are no shortages as such, but at the same time, supply, you know, demand is pretty good and supply is pretty high. I think this trend is probably going to continue for a while. Where we see and where we're focused on, and might take a few months, is really the used car side of CarWale and the used car side of OLX, where we see a lot of positive growth and is what we're working on, you know. I come back and the used car industry will be a point as well. We really see that, you know, CarWale numbers on the used car side as well as OLX numbers on the used car side going up. Got it. And, on the synergy side, so I understand on the power side, but on the revenue side also, do you, see there is, there will be some synergy which we can sort of derive, post this acquisition or, or transition of the OLX into our system? And, what are the areas and how much, can that, go up to? The main energy, the main synergy is used car business, right? Because that's where the overlap exists. And again, as I come back, you know, we basically see whether you can add CarWale and OLX and give a much stronger product out to all the dealers in India who use classified products. And that's where we see the number one synergy between the two companies. We see a significant upside in the next year or two years in the business. Okay. Thanks a lot. I'll... Sure. Thank you. The next question is from the line of Payal Shah from Brilliant Securities. Please go ahead. Hi, sir. Thank you so much for the opportunity. Hi, Payal. So my... I have two questions. One being on the real estate business. FY 2022 was a year of degrowth for the auction business from the backdrop of multiple sectors like Mahindra First Choice, IU, ASP, used cars, et cetera. So I just wanted to understand that, you know, H1 FY 2023 has been relatively flat, so how does the remainder of FY 2024 and 2025 look like for this segment of the business? Yeah, actually the six months have been tough, and I think it's a lot has been due to this fall in the repossessed business. I think there's also been growth on the other side of the business. A lot of fall here has been made up by the retail business and other businesses. You know, we are hoping that things turn around, you know, probably in this quarter or the next quarter, because the repossessed numbers seem to have bottomed out. And, you know, as I said in the previous calls, that even though the repossessed business is down, we made a lot of progress elsewhere. And when the repossessed business does come back, whether it takes three months or six months, we'll be a much stronger company, and I think we keep seeing that. So we're, you know, I don't want to give any growth guidance, but we do believe that, you know, the next 36 months, Shriram Automall will be in a much better place than it is today. Okay. So my next question would be, like, CarWale has approximately 30+ million monthly unique visitors, which is similar to the average visitors on OLX. So what is the number of visitors we aim to get, once the two platforms come under one umbrella? Is there will literally be an overlap between these visitors, too? So there's no intent to bring them under one umbrella. OLX dot in and OLX app will continue to function as they are. CarWale and its products will continue to function as they are. Many people come to CarWale. As I said, 84% people come to CarWale for new cars. 40% people come to OLX to used cars. So the users or the consumers or people who come are for different reasons. Like someone like me and you might go to CarWale to buy a new car or, and someone like you and me will go to OLX to buy a used car or sell our old car, or even buy a refrigerator or sell a refrigerator. So it's just the different platforms and used by different people for different purposes. But as I said, the engagement metrics are different, the methodology of acquiring is different. 70% people coming on OLX comes through an app, which they download on their phone, and they use it multiple things. They use it from selling a car to a two-wheeler, to buying a, you know, sofa, to different, different reasons. Today, someone moving houses and they want to sell three items in the house, whether it's a refrigerator or a sofa or a refrigerator, they'll go on to OLX. So, you know, OLX is a very different place in the heart of consumers, and CarWale is a different place. If you want to buy a INR 10 lakh new car, INR 10 lakh you think you're going to go to CarWale for that. So both the companies function differently, and both have to grow independently. Okay. That's, that's quite helpful, sir. Okay. Thank you so much for the opportunity. Thank you. Thank you. The next question is from the line of Pankaj Bobade, who's an individual investor. Please go ahead. Hello? Hello, sir. Pankaj? Pankaj. Hello? Hello, Pankaj. Can you hear us? Yeah, I can hear. Am I audible? Yes. Okay. Well, congrats for good set of results. Thank you, Pankaj. Season's greetings to you and your team. Happy Diwali to you as well. Thank you. Just wanted to understand, we are closing down the C2B business, which, had gross revenues of around INR 94 odd crores and INR 12 odd crores. We have paid around INR 560 billion plus gross for whole business. So did we not overvalue the business at the time of purchasing it? No, we don't feel that, because, you know, estimation of valuation, we have factored many of these things into account of, of the transaction business and classified business. So we actually feel that, we, when we valued it, we arrived at fair value, keeping some of these considerations in mind. Okay. Okay, now, when we are closing it down, are we? Hello? Pankaj, are you there? Unfortunately, I think he's having some issue with his line. So, if you do have any questions, Pankaj, and if you can still hear us, please do come back in the question queue. Ladies and gentlemen, again, a reminder, if you do have any questions, please press Star and One on your handset. The next question is from the line of Yukt Mehta from AT Capital. Please go ahead. Yeah. Thank you for the opportunity. Hi, Yukt. I have a couple of questions. My first question would be on abSure and Signature outlets. In the last call, we mentioned the number of outlets being 120+. What is the number of outlets now, and how do you see this ramping up? Yeah, I think this is a similar number. I did stress that we also have now over 100 OLX similar kind of outlets. So we've actually doubled our stores already. You know, in the next month or two months, we're working on a strategy around, you know, the 110, 120, which are the CarWale and 110, 120, which are the OLX, and figuring out whether what we should do with the remaining 230, 240 stores. So one of the things which OLX has done is given us a lot of decent distribution as well through these stores. Okay. Owing to the acquisition of OLX, a significant portion of our cash has been deployed, but other income will significantly be lower. So by when do we expect the returns from this transaction to cover the shortfall? No, that's a very good question, and also, that we've lost a certain amount of other income, which is mostly because we deployed a large amount of cash in the transaction. We do believe that in the you know it will take some time, but definitely in the short to medium term, you know, OLX will more than compensate for the losses we have an interest in, but I, we do feel conscious about that. Yeah. Also, what are the company's plans for the remaining INR 600+ crore on the book? Any other acquisitions in store? At this point, you know, honestly, we are just looking at the consolidation of OLX, you know, the tech transfer, the growth of the classified business, the integration with current businesses and growing our current businesses. You know, if something did come up in the future, we'd look at it, but at this point, the whole focus is on, you know, getting this right. Okay. That's it for me. Thank you. Ladies and gentlemen, a reminder again, if you do have any questions, please press star and one on your handset. The next question is from the line of Sachin Dixit from JM Financial. Please go ahead. I have an add, a couple of follow-up questions. So the first one being, when the plan actually, so the communicated plan was that we will have OLX transactions have been classified, and also you were saying the product tech cost will fall by 40%-60%. Now that transitions have gone, I was expecting maybe a sharper drop than expected, but even now you are saying 40%-60% decline only. No, yeah, it's possible, Sachin. What you're saying is correct, and it's possible. It's hard to assess at this point, but it is possible. All right. And, secondly, on, on the 110 odd OLX stores, I believe those are part of OLX Autos again, the transaction center. No, not all the transaction. That is part of, that is part of the classified business. So that's part of classified? That's right. So, on the OLX classified piece, right now, honestly, there is a lot of competition in the non-auto portion of OLX, right? I mean, probably it's an anomaly, but I believe last time you guys mentioned 15% of the revenue actually comes from real estate. Looking at the number of real estate portals that exist in India, like, how sustainable or how much motivated is the other revenue on OLX other than autos? So, of course, auto, there's a very high level of market share and relevance to the used car dealer today. We talk to used car dealer, they'll tell you a large part of their sale is OLX. The other categories, in fact, the main categories I'll talk through, one is mobile phones and electronics. I don't think there's any other verticalized or horizontal player which is able to cater to the millions of people who come onto this platform to sell their mobile phone or electronic device, right? So they're a consumer or a dealer. So very large amount of traffic comes from seller of mobile phones and electronics. The third category that part is two-wheelers. Again, very high percentage of users sell their used two-wheeler on OLX, and again, consumer and dealers as well. So people who want to buy these products, whether electronics, mobile phones or, two-wheelers, need to come to OLX. There's just not a supply source available. So yeah, it's used cars, mobiles, electronics and, and two-wheelers. This is the model as illustration. When you come to something like real estate, which is another reasonably strong category for them, there are two types of real estate, you know, advertisers. One is a user like you and me, who've got a flat to sell or a property to sell or a, you know, which is like a resale, which is almost not like a new development. OLX is only on the resale side today, which is existing homes being sold. A lot of the other real estate sites are on new developments, which is new developers advertising. It's almost like CarWale is on the new car side, the new other websites are on the new development side. OLX is 100% on the, on the, home side, which is my, my house and your house, single home side. And on that side, they've got a reasonable market share and strength. That's where their strength is. So, you know, its segmentation is different, but I just tried to explain all these categories and talk you through what OLX's strength is. And my understanding was even for secondary sale and rental also, we have decent number of hotels. But anyways, moving on, on the monetization piece for the car side. My guess is most of it is coming from either a used car dealer or a shop owner, people like those. How much would the breakdown, according to you, be between individual seller versus someone who's running a business out of it? You know, really, on the car side, the breakdown is evident for us because we are able to compute it. You know, when you come to mobile phones and fragmented supply, it's hard to tell who's a user and who's a dealer, right? It's very hard, because you can get on the platform and pay and... But, but it, you know, as I said, on the car side, a significant part, I would say 75%-80% is from dealers. On the other category, it's very hard for us to comment at this time, how much is user and dealers. But on either side, we've seen on the platform, traction is, is fantastic, and there's a lot of opportunity to improve monetization and performance for the users. I mean, for the users and for the users. I think, it's a massive, massive opportunity. Across categories, not just cars. Those are the questions. I think, I think I really given some numbers out earlier in our estimate. They are 35, I think it's correct, so around 35 million listings a year. Yeah, I had those numbers- You look at the number, you look at the number, right, and you say, "My God, 35 million! Yeah. It's a very large number. Thank you so much. The next question is from the line of Sanjay Sood, who is an individual investor. Please go ahead. Thanks. Thanks for giving this opportunity to me. Hi, Sanjay. Hi, and congrats, Vinay. Thank you. I just wanted to understand, what is the ROI period for this acquisition? What is the ROI, sorry? What is the ROI? Return on investment. You know, at this point, immediately at this point, it's hard to quantify ROI investment. But when you look at the ROI investment over a long period of time, we believe, you know, obviously, we have our own hurdle rates in the company of what return it should give, the parent and then, of course, the shareholders. But we believe that we significant value creation, for, CarTrade Tech and, of course, CarTrade Tech shareholders. You know, OLX is, if you look at the multiples of the valuation in terms of revenue terms or even any other term, it's, it's a reasonably cost acquisition. And we do believe that the amount of synergy it adds and, and its own, and on its own strength and own strength, is gonna tremendous value to us over the next 3-5 years. Okay. And, one request from my side- Sure. If you can provide a used car sale data on monthly basis, like what basically major players are giving, providing this data. Since you have grown big now and becoming bigger, hopefully. Sure. It will be making sense for all of us to understand we are moving in this direction. I understand. So since we are a classified platform, what we currently provide an auction platform, we provide sale data on the used vehicle side. But here on the classified side, we try and provide some of the proxies so that you get a good idea of the used car business and its metrics, if that's okay. Okay. And then, last, just wanted to understand, you have closed down this C2 business, C2B business. What exactly it used to do? Because I have not understood this at all. Okay. Sure. What it did was, if you list your car on OLX and, you know, millions of people a year list their car on OLX, a small percentage of them wanted to auction their vehicle to dealers. So what they had done was built a electronic exchange, where what they would do is first they come to your house and inspect the vehicle, and then they would auction your vehicle to a large number of dealers in India who would bid for it, and then they would pick up that vehicle from you and give it to that dealer and make their margin in between. I think that was the model. We just found that the whole cost of operating it, first of all, the very few percentage of OLX customers wanted it. More than that, we found that the cost of inspecting it from you, collecting it, giving it to a dealer, and the margin made in between, the unit economics was very broken. That's what we found. Okay. So, like, it is not like, Shriram Automall business? It is actually the auction business. Shriram Automall is similar, but Shriram Automall is actually got very high scale in what it does, and it's got its own location, so it doesn't go to your house to inspect. People bring in vehicles to their physical locations to auction. It's slightly different. The business is similar. Execution of Shriram Automall is far more efficient. Okay. Thanks, that's enough. Yeah. Thank you. Thank you. Ladies and gentlemen, a reminder again, if you do wish to ask a question, please press star and one on your touch-tone phone. The next question is from the line of Vijit Jain from Citi. Please go ahead, sir. Yeah, thank you so much again. Hi, Vijay. Hi. I have two questions. So one, looking at the standalone revenues and P&L this quarter, right? So your adjusted EBITDA, I think, including other income, is about INR 6 crore. And if I remember right, there's INR 1 crore of provision for the due diligence stuff done here, right? So if you think of the adjusted EBITDA through another income, sustainable number here as INR 7.3 crore, roughly, that's again a pretty decent jump YOY QOQ. I can see your costs, if I look at it, direct impact, have been fairly controlled. So just your thoughts on whether that's. Is it, is it 1.2 or was it higher? I just want to check. I think it's a cycle that I'm not able to double-check. Aneesha? Last year it was 1.5, right? It's 1.5. After one, we had- Okay, correct. Yeah, but that would probably be correct. The answer to that would probably be correct, Vijay. Oh, okay. So, so the due diligence cost was in 1Q and, So it's not a part of 2Q expenses, is that what you're saying? No, no, it's both. It's in both. I see. All right. And, the second question I had was, just wanted to understand, what do those 100 OLX outlets do for the classifieds business? Are they similar to the abSure, in terms of model and how it works? Yeah, it is quite similar. I think the abSure works with—abSure is a little more retained, where abSure was created just so that you could buy a vehicle online on CarWale. And the services of, you know, the products and the CarTrade Exchange, warranty and money back and all that could be under the actual store. It's created to enable, you know, a whole digital environment to your purchase. I think what OLX did was, it had a very premium dealer whom they certified to be an OLX Autos dealer. And even though it didn't offer them the money back, it offered the warranty, but even though it offered the money back and the online experience, they made it into a curated marketplace within OLX, the classified business, and kept rolling it out. So these are almost differentiating; they almost adopted these dealers. Again, it's an asset-light market, franchise, dealer, own dealer, operator, dealer, working capital, dealer, you know, fixed assets, et cetera, et cetera. Very similar. It's just that our vision was slightly different, where we wanted our stores to be really looking at the next phase of our growth, you know, a few years from now, where you, if you and I want to buy a car online, then these are the stores which will be able to do this entire experience completed in a particular way. We did this with a view of giving a high-quality car to the user. I think that was the intent. Got it. And, the second question, just on the OLX part. So I would imagine, and when I look at the, you know, app charts, for example, I can see that OLX usually is among the top 10, top 15 apps, on, both Android and iOS. So I, is it safe to assume that most of the traffic for OLX comes from the app? Yeah, 74, more than 70. No, the CarWale is the reverse, actually, 70, more than 70, yeah. 70% for, Yes. OLX is apps, while 30% is apps for Yeah, right. Yeah, CarWale would be, like, about 30%, maybe something like that. It's coming a little bit reverse. I think that's also partly because OLX used for multiple purposes. CarWale is like a high, high, engagement one time, buying a car is, like, one time, so it's a little different. The usage is different. Yeah. And so with regard to that, so obviously in addition to, you know, getting a much bigger scale in the used car business, you're also getting a much bigger play in the mobile app space with this. Absolutely. My question is, you know, is there anything from the ad tech products that OLX has built that you think you could use in CarWale? Oh, there's lots of cross-learning. Any thoughts on those kinds of things? Yeah, a lot of cross-learning. Very, very early days, but then lots of cross-learning on, you know, programmatic ad selling to, you know, AI, too. There's just so much learning between the two teams, but as I said, it's only, you know, I think it's day 90 today, exactly day 90, day 89 today, actually. So it's just very early days, and a lot of time went in tech transfer and then the shutting of the C2B and all of that. So, you know, now is really the time for us in the next, you know, probably 6-16 days to kind of clean these processes and places, but obviously learn from each other on many of these issues. Got it. And I ask also that, that's also because I'm just wondering, you mentioned that those product development costs will go down by 40%-50%, possibly more. In general, for India Internet, when people, when companies build all these different types of products, and, you know, ad solutions and whatnot, et cetera, it's usually pretty expensive to build those, right? So, from a continuing to support the product and, you know, building new products, how confident are you, you know, that you will be able to- No, no, I think we are very confident. No, very confident in the cost reduction. Both CapEx as well as for development? Yeah, yeah, definitely on the tech costs, because and the platform costs, because currently these costs are being incurred by them globally, and, and they're being charged to us, but it's in their environment. It's, it's, it's not completely correlated to what costs may incur in India for this. So I think the first part is the entire team is now part of our team, which is part of the superb OLX India team, which is us, not their team selling it, number one. Number two, all the third parties, infrastructure, et cetera, et cetera, created by them is what this platform used. Slowly, slowly moving to our environment of our infrastructure, et cetera, et cetera. So it's completely different this time. It's, in fact, it's hard to contractually, but definitely significantly going to be lower than what it was. ... Got it, understood. Those are my questions, and, congratulations once again, Vinay. Thank you. Thank Thank you, Vijay. Thank you. Thank you. The next question is from the line of Pankaj Bobade, who's an individual investor. Please go ahead, sir. Hello, am I audible? Hi, Pankaj. Yes, you are audible now. We lost you earlier. Yeah, yeah. I just wanted to understand, when we are closing down the C2B transaction business of OLX, so what are we going to do with it? I mean, I understand that the losses which were draining out, which will be closed down, cut down rather, but then it would have some fixed assets, which would— can we, would we be able to salvage some from- There was no fixed assets in this, I mean, or minimal fixed assets, because a lot of the places in the country were on leased properties. The business was an asset-light business, so it was them auctioning cars on behalf of dealers. I think the only real asset would be the C2B platform itself, which of course, we have with us. And we'll see what other use we can make in the future. And of course, another asset would be the data and some of the an IP related to it, which we'll see what will be the future. The intent is to... I clarified it earlier on the call, the intent is to shut the current way they operate the C2B business. As I said, a large, large number of people list their car for sale on OLX. It continues. It's not like we're exiting the C2B business as such. We're exiting the C2B transaction business. So still, someone like you can list a car on OLX and sell it to a consumer or to a dealer. This is happening. Millions of people are doing that every year. A small percentage wanted us to auction it in a transaction model, which is what OLX did, which is what is shutting down. It's not the C2B shutting down. It is the C2B transaction business shutting down. Right, I understand that. I mean to say that we have paid the seller at that time was valuing the whole business, and the valuation was done for all revenues, right? So for INR 523 crore and a big chunk of that was coming from... INR 523 crore, which we valued the business, and a big chunk of revenues were coming from this business. So if we are right about that- No, we won't, because when we did the valuation for it, we had factored some of these scaling down, et cetera, et cetera. Hello? Hello. Hello, Pankaj, can you hear us? Yeah, I'm done with it. Okay, okay. No problem. All right. Thank you. Gentlemen and ladies, due to time constraint, that was the last question for today. As there are no further questions, I would like to hand the conference over to the management for closing comments. Over to you, sir and ma'am. Thank you. And thank you for all of you for being here today. I just want to, you know, tell you how excited we are about the last quarter and the acquisition of OLX. Once again, happy Diwali to all of you, and enjoy your weekend and festivities ahead. Thank you, everybody. Thank you. Thank you. On behalf of CarTrade Tech Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.