Ladies and gentlemen, good day, and welcome to CarTrade Tech, Q1FY2025 Earnings Conference Call. This call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the 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. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to the Chairman and Managing Director of CarTrade Tech, Vinay Sanghi, Mr. Vinay Sanghi. Thank you, and over to you, sir. Good afternoon, everybody, and thank you for joining CarTrade Tech's quarterly earnings call. It's been a very good quarter for the company. If we go to Slide 5, the company's shown a 64% in operating revenue growth and a 46% growth in overall revenue. The profit after tax is grown at 69% in Q1. CarTrade Tech continues to be the number one automotive platform in India, the number one used classified platform, the number one vehicle auction platform, and also the number one horizontal classified platform. More than 70 million unique visitors or unique customers visit our various platforms: CarTrade, CarWale, BikeWale, OLX, every month. What is more important is that 95% of them come organically or come because of brand or organic search and affinity to these platforms, giving us a very low cost of customer acquisition. We have more than 400 physical locations, which include auto malls, abSure outlets, OLX India outlets. We auction at a rate of more than 1 million vehicles a year. Revenue is the highest ever in Q1, in any quarter one ever in our history, at INR 156.4 crores. Adjusted EBITDA, which is INR 43 crores, or close to INR 43 crores, is also the highest ever in any Q1. PAT is INR 22.9 crores for the quarter. We are obviously a debt-free company and carrying a cash balance equivalent of INR 782 crores. If you look at Slide 6 of the presentation, it shows the revenue growth of 64% from operations, which is up to the total income, including other income, with up to INR 156 crores. The EBITDA, which shows the leverage in our business, as we've spoken repeatedly, incremental revenue growth leads to disproportionate increase in margins. You can see the EBITDA is up 295% or 300%, close to 300%. Operating margins and EBITDA margins have gone from 6%-15% Q1, I mean, year on year, sorry, which shows, again, the leverage in the business. Revenues increase at a far greater rate than costs do. We look at the profit for the year at the bottom. In a consolidated account, it's 69%, up to INR 23 crores. And adjusted EBITDA, as we calculate it, is up at INR 43 crores from INR 30 crores last year. If we go to the standalone accounts, which is Slide 7, which is really a proxy for a consumer group business, CarWale, BikeWale, the operating revenue is up 18%. The other income is down because of the OLX acquisition last year, and therefore there's a reduction in the cash balance, which has led to a reduction in the other income or treasury income. But operating revenue is up 18%. And again, here, you can see the leverage in the business. Costs have gone up just 2%, or the costs actually down by 2% for our standalone accounts, which has shown a 700% increase in our EBITDA. It was actually negative INR 1.25 crores last year to this year, positive INR 7.23 crores of EBITDA. And again, it resulted in a -3% margin going to 14%, which again shows an increase in revenues that will disproportionately increase our operating profits and profits. PBT is at about INR 13.76 crores. PAT is up to INR 12.87 crores. On the standalone accounts, growth is slightly lower just because of the reduction in the other income and the treasury income. On an operating basis, as you can see, EBITDA is up almost from -INR 1.25 crore to +INR 7.23 crore. In Slide 8 is the remarketing results. I think this is the one area where we would, of course, like to do a lot better. From a position of most of the vehicles being repossessed to almost 42% of it now being retail supply of vehicles, this has enabled us to get to a flattish to plus positive 4% revenue growth, but a 12% increase in profits. We continue to work hard in this business to grow revenues, but it's been a difficult 12- 14 months for this company. We feel committed. We feel we're fully committed to it. As well, we feel pretty optimistic about the next 12-24 months. But at this point, this is the one area where it's been difficult for us to grow, considering the fewer repossession of vehicles and increase in retail supply of vehicles. If you look at Slide 9, which is the results of our OLX classified business, total income is up QoQ. We don't have a year comparison because we acquired this in August last year. But QoQ up by about 10%. EBITDA is up from INR 7.25 crores to INR 8.05 crores for the quarter. And profit for the year is up to INR 8.57 crores as of June end. Adjusted EBITDA, which is approximately forward unit operating performance, is up from 24%-27% margin for the quarter. If you look at Slide 11, it shows, again, Google Trends on CarWale versus competitors and BikeWale versus competitors. We clearly still saw a big difference between our competition in terms of brand affinity. Slide 12 talks about OLX versus its other competitors. As you see here, OLX is much, much stronger and has very little competition on the horizontal classified side. This is what I had in the presentation, a brief summary of the quarter and the financials and a few operating metrics. I'll be happy to go into a detailed question and answer. We feel very optimistic about the quarter. We feel OLX and CarWale have had a very good quarter. SAMIL has had a flattish revenue quarter, but a little bit of profit growth. We're very, very optimistic about the next few quarters coming. Thank you. Happy to answer any questions at this point. Thank you very much. You will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Hi, sir. Thanks for the opportunity and gave us a good set of numbers. Thank you, sir. Sir, first on the consumer business, if you can give some more color on the growth, how has been the used car and new car segments grown? Any mix if you can share? And generally going ahead, how do we look at further areas of monetization in terms of growth drivers for us for this business going ahead? Yeah, the consumer group, as you can see, has grown by 18% operating revenue, and the group profit growth has resulted in 18% growth. The mix is pretty much the same. Actually, I'm not covering it. It's pretty much the same across quarters. 84%-85% of the business is new cars and new two-wheelers. So we feel that because the industry itself, there's been a 3%-4% growth in the car industry. The two-wheeler industry growth has been stronger. But we feel very optimistic about the business itself. If you see the consumer group in a single quarter, it is highest ever in performance as well. Even though it's grown 18%, it's highest ever quarter performance ever. So we feel very optimistic about the business. The drivers continue to be the same. I think it's about more of dealer and manufacturer listings and advertising. We feel pretty good about not only the growth of the growth rate which we're at, but also the fact that the leverage in the business is starting to show, where you can now evidently see that with revenue growth, there's a big, big profit growth coming in these businesses as well. Sir, if we look at the marketing expenses, it has been, as a percentage of revenue, been coming down for the last few quarters. Do you think, I mean, in case if you try to push more, there is a possibility of a stronger 20%+ growth by sort of raising our sort of spend on the marketing side? Or do you think this is the level of profitability we will try to achieve going ahead? There are two things in this. Obviously, marketing numbers are coming down. Revenue for the revenue is increasing. So that's coming down as a percentage. But what you should keep in mind also is that the traffic is stagnant in this regard. It's not that the traffic in these platforms is not growing. So we feel increase in marketing expenditure is not necessary at this stage. The traffic in the consumer group is almost 40 million users a month, which is reasonable growth there as well. And if you look at the brand affinity versus its direct competitors, it's again very, very strong. So we feel the marketing expense is okay. Obviously, we keep trying and saying, "This can be 18%, which is in Q1, going at a stronger rate or not." And that's what we keep working on. But we feel it may not be at this point necessary to increase the marketing expense in the business. Got it, sir. So lastly, on the OLX side, if you can talk a bit about we have been now working on this for the last few quarters. So how do we look at step up in the growth? What are the monetization areas you have already capitalized, and which are the other areas you are working on? And does this current financials reflect full impact of all of the cost initiatives you have taken? Or do you think we should expect more costs to come, or we should expect more margin expansion on a sustainable basis? Yes. I think the first question is it's been about a year since the acquisition. The first few months, maybe first 5, 6 months, were really spent on technology transition, moving to our environment, product development, team stability, many such things which normal M&A takes. I think it's in December, January that we were able to look at the business and start focusing on growing the business. And if you see now over the January- March quarter and the April to June quarter, the consistency and stability in the business across, whether it is revenues or margins. And we feel this is not different from any other business we run where revenue growth will lead to margin expansion. You can already see that in a very small way. It's grown at 24%-27% QoQ, last quarter of this quarter. And this nature of the business is very similar. Costs are fully baked in. In fact, costs are a little inflated because in the first quarter, we took increments too in this business. It will not come for the next nine months now. So the costs are slightly higher in the first quarter on account of increments. Now you see the benefit of costs remaining stable over the next nine months, but revenue is growing. As you know, in all companies, the increment cycle is first April. Therefore, this Q1 for us across our businesses, even consumer group has carried increments in them. And naturally, from July to March, these costs will not go up, whereas we believe that the revenues can grow from here. So yeah, there should be margin expansion in the consumer group business, I mean, in OLX, back in the consumer group business. And in all our business, actually, it's pretty similar. It's not that different. Got it, sir. Thanks a lot. I'll come back to you. Thanks a lot. Thank you. Thank you very much. The next question is from the line of Natraj Shankar from DSP Mutual Fund. Please go ahead. Hi. Thanks for the opportunity. I just want to understand. Hi. Hi. Hi. Thanks for the opportunity. I just want to understand the OLX part as we build out over the next couple of years. What is the time? How does it look like? And what will it take to get there from investment and backend and frontend point of view? Sure. So the OLX has got different verticals. I mean, the one vertical which is very associated, connected with our overall group is the used car classified part, which is about 45% of OLX India's revenue, which is creating the entire used car market with dealers advertising and consumers buying. So it's very, very strong in that segment. And 45% of revenues come from there. The TAM for that is, in our opinion, extremely high. There are more than 5 million used cars a year sold in India. And obviously, we are catering to. OLX is a very, very strong enabler for dealers to sell used cars in India. It is the number one used car classified platform in India. And thousands of dealers advertise on OLX to sell their cars to consumers. We obviously feel very optimistic about the size of market and the TAM in this segment. The second segment for OLX is a non-auto business, which carries classifieds for homes, jobs, electronics, two-wheelers, etc. That TAM is really catering to all consumers in India who want to sell a used product or buy a used product. It is the largest used product listing platform in the country. It's also the largest platform for people to buy used products in this country. So obviously, in a country like India, where there are more than 1.4 billion people, the need for most Indians is to buy or sell a used product, right? And we feel that the TAM of that is also limitless. Obviously, for us as a group, in the first few months of the acquisition, a little more focus on the used car side because that's what we understood better. And obviously, our plans are to grow in the medium term the used car classified side. But we are also making strong plans for the non-used car side, which is homes, jobs, electronics, household items, two-wheelers, etc., etc. And we feel that TAM could really be the future growth driver for the company over the next few years. Okay. On the non-used cars part of it, what kind of investments would you need over the next 2-3 years from an OPEX point of view to get there? And how would that play out in your balance sheet and P&L? Yeah. So there's obviously a lot of tech and product investment, as well as investment in various other processes like sales and other operations, etc., etc. But the non-auto, the non-used car part is profitable as well today. We don't see further cash going into it. I think the investment is really in resources and bandwidth more than cash. As I said, it's already profitable, the non-auto part. So we don't see that as an issue. But we do see a lot of investment going from our side on various other things. Okay. Thank you so much. Thank you. Thank you. Thank you very much. The next question is from the line of Ankit Kanodia from SmartSync Services. Please go ahead. Yeah. Thank you for taking my question. Congratulations on the setup number. Thank you. So my first question is related to the OLX business. I know that we don't have numbers to compare for the previous 2023 quarter. But if I look at the August- March 2024 period, so broadly, it gives me a monthly run rate of around INR 13 crore. In this quarter, we have done more than INR 15 crore. I think we missed your question. Let me see. No noise. Mr. Kanodia, you're unmuted. Am I audible? Now you're audible. Hello. Shall I repeat the question? Yeah. We didn't get the last part because yeah, could you repeat the question? I think we didn't get the full question. Yeah. So what I was saying is that in the August to March period, we had INR 110 crore in OLX India. And out of that, INR 13 crore was the monthly run rate. So if you divide it by 8 months, it would come to INR 13 crore. And it also included, I'm assuming, it doesn't include any of the discontinued business. No, it doesn't. That is correct. Yeah. So now, in this quarter, when we see the monthly revenue run rate, it comes to about INR 15.3. So is this a seasonal jump, or do we expect this to continue similar levels to continue going forward as well? That was my question. Yeah. Thank you. I think actually, the season is actually sweeter now than it is normally the automotive or even non-automotive season. In India, for shopping, it is mostly from October to March. April to June is normally the weakest quarter of the year in terms of revenues, normally, across auto and non-auto for us. We do feel there's some revenue growth. I think a lot of this is just us getting more focused on the efficiencies of both the auto and non-automotive business. Naturally, we do expect and we are working towards stronger revenues in the coming months. It's not a seasonal jump in April to June, if that is the question. Great. So that's very helpful. Second question is related to the expense. In the last quarter, also, I asked this question, and I think you mentioned that the current level of expenses in the OLX business will continue. We don't have any one-off anymore. So INR 36 crore was the total expense last quarter. In this quarter, it has been INR 38 crore. Do we expect a similar kind of run rate? Yeah. We don't see much change. I think these costs are fully baked in, as you answered earlier. I think, in fact, as I said again, this carries increments in April for OLX, the team at OLX, which, of course, is now fully baked in here as well. Every company has an increment cycle, and ours is April. And that's also being factored in here. So definitely, in the next nine months, we should see a very stable cost environment. Other expenses here include the marketing and advertisement costs for? It's mostly operating costs. There's almost no marketing in this company. OLX, as you know, is a very, very strong brand. It gets almost 31 million unique customers a month, which come almost to brand-related apps which people have on their phones. So the marketing expense is almost zero in this company. This is really operating expenditure. Yeah. Thank you. Including technology infrastructure as well. Yeah. Got it. So technology-wise, we have already done all the expenses. We don't expect to incur? Yeah. No. There are obviously monthly costs, and I think even server costs, etc., we incur. But these are fully factored in these things. Okay. So my last question would be related to our remarketing business or SAMIL business, which I think in the last 4-6 quarters has been very, very, very difficult. And in the last quarter, I think we already get to the point that we are trying to focus more on the retail rather than the repossession side. So any color as to how we are? Yeah. I think, unfortunately, the same thing. Repossession continues to be repossession supply for us continues to be a challenge. And that speaks well of the Indian economy, I would say. The fact that NPAs are lower in banks and NBFCs for automotive lending is the result of repossession being lower. The reality is the team out there focused very, very strongly in the last 3-4 years on building an alternative supply segment, which is retail, which is almost now equal to repossession supply. So that is the reason the results are marginally up because of that effort. But repossession is still not showing any uptake, which hurts the remarketing business, actually. I just want a clarification. You mentioned that retail is almost equal to repossession. In terms of volume supply for us, that's correct. Yeah. Okay. Great. Thank you so much. I'll come back and get you if I have any more questions. And all the better. Thank you very much. The next question is from the line of Vijit Jain from Citi. Please go ahead. Yeah. Hi. Thank you. Can you hear me? Yes, we can hear you. Yeah. First off, congratulations. This looks like a pretty decently good set of numbers across all three businesses to me. My first question is, on the OLX side, so growth looks pretty solid in the quarter, right? I mean, the only way to look at growth, I guess, is the QOQ, and it's about 8%. And you guys had called out that growth should start to pick up from this quarter onward. So congratulations on that. And I'm just wondering, how should one look at this QOQ number from a going-forward perspective? And related to that, any thoughts on additional disclosures on user metrics on OLX? Yeah. Obviously, the idea is to keep these revenues growing. I mean, obviously, I'm not able to give guidance on whether it will be 8 or Q on Q or what the rate would be. But for us, in the last quarter, we've heavily focused on getting the operations of the company and processing the company in place. I think the first six months has been a technology transition and other things. And obviously, in the last three months from April, we've got heavily focused on the automotive and automotive processes and strategy of the company. And it takes time, but we're pretty confident looking at the TAM on the used car market and the non-automotive side. We should have a strong revenue growth in this business. But a lot of efforts are on, and this is reflecting partially in the first quarter. But in very early days, I think a lot of work still needs to be done in the company. And as I said, the TAM is just limitless as far as we think in both the auto and automotive side. So optimistic place to be in, but a lot of work to be done by the team as yet, I would say. In terms of user metrics, I think the big ones for us have always been traffic, which we talked about in the business. The other big user metrics for us is the revenue split by auto and non-auto. But if there's some specific metric you want, if you tell us what they are, then maybe we can consider them start giving it out. Yeah. So just a quick clarification. The traffic metric that you share, the 40 million unique visits, that doesn't include OLX properties, right? No, 40 million is only consumer CarWale, CarTrade, BikeWale. OLX is another 31 million last month. Yeah. Yes. I think to start off, I think that metric would be useful, I suppose. And also transaction activity. We will do that separately. We'll do that separately. Great. Thanks, Aneesha. Then my next question is, so in general, now OLX is also hitting that comparable to standalone business margins. Obviously, the growth seems to be a bit higher. So where does the margins go from here? I guess you're already at 24% yesterday, but margin, I think, 17%-18% if we include ESOP costs. So with this, and this looks like it's growing ahead of the standalone business, right? So I'm just trying to get a sense of where do you think margins go from here? And will that be a function mainly, you think, of growth, or do you have further cost savings to achieve here? No. I think margins in both OLX and the consumer group were better in April, June, and will rise. We'll increase in revenue. As revenue goes up, as we've always said, margins will go up. And profits will grow at a much larger rate, which was obvious from the first quarter results. In fact, the first quarter results carry the increments. If they were not there, the rates of growth would have been faster. I mean, it's a profit-good position. Yeah. I mean, it's pretty yeah. It's well yeah. It's well above what I would have thought. So I'm wondering from that perspective. Exactly. So So that's just the nature of business. It'll continue. There will be no change. I don't think cost reduction there may be some minimal cost reduction, but I don't think cost reduction is now I think we've done a lot of optimization of cost across the group in the last six months. So I can't see cost being the driver of margin growth. It has to be revenue as a margin growth driver. Correct. The last question on the remarketing side. Thanks for the earlier comment on retail and repossession metrics around that. In general, if I see your revenue, and the way I look at it is remarketing revenues per vehicle auction, and that number seems to be up decently on a YoY basis. Even with seasonality, it seems to be a pretty decent number. I'm wondering, is that driven by used car prices going up? No. It's a little driven by supply chain mix, right? Because the more retail goes up, it does help our margins a bit. It's harder to grow retail, but it does help our margins a bit. I think the challenge here is that if half the business is growing and half is not, or degrowing, half is degrowing, that becomes a challenge sometimes. And the repossession has actually been degrowing for some time now, over a 12-16-month period, 12-15-month period. So that's been the challenge. But retail continues to be strong, and margin growth is coming a little bit from retail. Got it. Sorry, Vinay, if I can ask a last question related to it. Within the OLX business, since nearly half of its revenues comes from used vehicles, so in general, when you have this revenue number for June quarter, right, and if I, let's say, just for comparison, say, compare it to March, did this growth mainly come because of more transactions on the platform, or was there better monetization because of the same dynamics at play here, basically auto industry dynamics, whatever they might be? No. So OLX used cars is a classified platform. Dealers pay subscriptions to be on the platform. It's a little like CarWale used cars, where also dealers pay subscriptions to be on the platform. It does not actually monetize the used car transaction, right? Or dealers don't pay us on transactions. They pay for buying packages to list on OLX or on CarWale. So the revenue growth is coming from more dealers or higher ARPUs from existing dealers, right? It doesn't come from transactions specifically. In fact, April-June is actually a sluggish period for the used car industry in general, I mean, compared to the rest of the year. If not, the automotive cycle will now become less evident. But then still, April-June is normally the worst quarter of the whole year for the automotive industry, right? Normally. But yeah. So I don't think it's being driven by doing transactions. It's just about more dealers or higher ARPUs than existing dealers. That's what comes in this particular module. And we keep working on adding dealers to the platform, renewing existing dealers, or upgrading how we charge existing dealers through providing more value to them. So that's a continuous, continuous effort for us over the next many years is how do the existing dealers renew faster, renew on time? How do we upgrade them to give them more services so they pay more money to us? And the third part of it is how do we keep adding new dealers to the platform? This applies to OLX and applies to CarWale as well. The only difference is used cars in CarWale is 85% new. OLX is 45% used. OLX is the number one used car platform in the country as well. Got it. So Vinay, I guess this also helps me answer your earlier question to me better because if you could share more metrics around how many dealers subscribe to packages and the yields on those packages that you get so we can better gauge whether you are seeing growth in what amount of growth is coming from adding new dealers versus upgrading them, adding new services. If it's relevant to include details around how many services and what kind of packages dealers are availing so we could better track how those dealers are availing. What kind of package, of course, is completely public information already because dealers buy those packages. In terms of mix in your revenues and that. Some of these metrics are still out there because it's a new acquisition. They're still maturing, reviewing, getting into the details, and filtering it out. We will, at appropriate time, absolutely share some of the data as well. Great. Thanks, Vinay. Those were my questions. Congratulations once again. These look like they've been. Thank you. Thank you. Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Jitu Panjabi from EM Capital Advisors, please go ahead. Hi. Hi, Vinay and team. Hi. Thanks, Vinay. Thanks, Vinay. Thanks, Vinay. I'm very well. Thank you. So on this whole OLX thing, I just want to be clear. Everything that was in OLX, the autos, non-autos, technology, cost, everything is folded into this number, and the eighth quarter bit does an outcome of that. Is that a fair assumption? That is correct. That is That is correct. And. Everything we do, which means that's the company, OLX Autos, which is called OLX India, which is basically classified for used cars, classified for home, jobs, electronics, two-wheelers, and household items, and other items as well. And all its associated costs of technology or people or anything else. It's a standalone. It's It's 100% subsidiary, and the accounts are reflected in that. So the question linked to that really is that you had two parts of the business fundamentally. One was the non-auto, one was the auto, and then you had the tech costs around, which is a separate line item you guys paid for, right? The idea was to cut the auto losses, consolidate on the profits coming out of the OLX classifieds, and then bear the tech costs and come out of the number. Is there more to cut on the auto side losses? No. The two businesses we bought, one was the classified business. The classified business carries an automotive, non-automotive side, which is what is reflected in all our accounts now. There was an automotive transaction business, where C2B, which is an asset-heavy business, that they bought vehicles and sold vehicles, which was reflected as a discontinuing operation last year, which we discontinued. So what you have seen in the last two quarters is what is left after discontinuing the asset-heavy business. And the continuing operation, which you're seeing in the accounts, has a used car classified business, which is 45% of its business, and has a non-automotive side, which is 55% of its business. And all tech costs related or is moved to our environment on 1st January this year, about eight, nine months ago, which are completely reflected, and all those costs are reflected in accounts now. They have been reflected the last two quarters, actually, not just now, but for the last two quarters. Yeah. Yeah. Yeah. Yeah. Okay. So sorry. My bad. That's what I'm about to say. Yeah. These are full reflection of the company's classified business, automotive and non-automotive, these current accounts. Okay. The second question is really around, I mean, the chitter-chatter out there. There's a lot of PV inventory, passenger vehicle inventory, sitting out from the OEMs in the system. The system is heavy, whatever. Now, can you just take us analytically through whether that's an advantage or a disadvantage for you guys? How do you play that out, and what are the implications on CarTrade over the next year because of that? Yeah. Sure. If you see the PV, the passenger vehicle industry is growing at 3.4% in the first quarter. Normally, for companies like ours where manufacturers and dealers spend money to sell vehicles or advertise, it is favorable that supply is more than demand. Normally, a market which is growing, but supply exceeds demand is better than when demand exceeds supply. Because when demand exceeds supply, dealers and manufacturers tend to mute or control their advertising, which happened in the past two, three years ago when we had the supply chain issues around semiconductors, etc., etc. Clearly, an environment where the market's stable and growing and supply is more than demand, or manufacturers want to sell more vehicles, or dealers do, it's a little better or a better market situation for companies like ours. Yeah. So you'd expect that there would be a positive outcome as a function? There is. And that's where you see this big growth, 18% growth, as well as this big profit growth, which has come in the first quarter in the consumer group. Okay. Okay. Okay. Super. Thank you so much. Really appreciate it. Thank you. You too. Take care. Bye. Thank you very much. The next question is from the line of Akshay Jain from Xponent Tribe. Please go ahead. Hi. Thank you for the opportunity. I want to focus on the OLX side of the business. First question I have here is that on the seller platform, I mean, my broader understanding is that our platform should probably be also compared to Facebook Marketplace, given that the way people sell there is also similar. So have we got a chance to compare how the seller side of the platform looks there versus here, and what are the areas in which we can improve the targeting capability that we give to sellers? Yeah. We've looked at all similar kind of sites, of course, and our product and tech teams continuously do that. I mean, obviously, the scale of OLX on the used side is very, very strong, whether it's someone listing, as I said, cars or two-wheelers or electronics, houses, or even household items. We obviously feel there's a tremendous product and response strength which OLX has got in terms of sheer usage of these products, right, by consumers who list or who buy, right, compared to any other platform in this country. I mean, we've obviously looked at Facebook Marketplace and other and tried to do a competitive benchmarking. Actually, what I meant is that which are the areas in which we can kind of improve? Because when I used it as a seller, I used it. It seemed like there are very few things I could do as a seller. And so I couldn't, for example, target, I mean, there was, at least, I couldn't see a single capability to target my ad better. So as an individual seller of a product, we have two types of sellers. We have dealers who sell and consumers who sell. Consumers like me and you who sell a car or a two-wheeler or a phone or any other item can list their product, and buyers for these products can sort and find these products in the geography and where you are. So if you are selling it in one area or one location or one pin code in, I don't know, Delhi, someone can target you from that pin code and find you and find your product, right? OLX is best in class in responses for listing, which means if you list, and you have two options to list. You can list for free or for paid. Once you list, obviously, the user has a chance to look at your listing and then pick and choose and see whether they want to buy this product or not. But just to tell you, the consumer response to listings is probably the highest, best in class in OLX, maybe across the world even, not just in India. The response rate. Sure. Sure. And second question was on the, I'm sorry. Just on the revenue mix, how much of our revenue would be coming from people paying for ads versus coming from Google delivering ads on our landing page? You're saying how much revenue comes from consumers paying for listings, is what you mean, right? Merchants paying for their own ads of the product? I'll just speak about the percentage consumers paying, not businesses paying. Maybe about 10% or less. I'm just guessing a bit, but maybe 10 or less. Okay. No, sorry. What I meant is from the Google ads or the various open internet ads that get delivered on a landing page, right, which are not our ads. Sorry. What is the question? What part of revenue comes from ads that are not from consumer or businesses but from the open internet? Oh, you mean just for Google Ads Network? So any other ad network, is that what you're saying? Yes. Yes. Yes. It's about just a little more than 10%. Oh, okay. And do you see scope there? Yeah. We see that kind of correlated with the traffic. Of course, the scope will increase, but kind of correlated amount of traffic we get. Sure. Thanks, Vinay. Thanks. I'll come back in. Thank you. Yeah. Thank you very much. The next question is from the line of Sachin Dixit from JM Financial. Please go ahead. Hi, Vinay. Congrats on a great set of results. Thank you. I had a few questions. Some of them have already been covered. So the first question is basically on the new auto. Obviously, that 18% growth is good. But I just wanted to understand from your angle how much growth is achievable in this business. Is this a 15% on an average sort of level growth story, or this is a 20%-22%-odd% growth story? Where do you think is roughly the sort of steady-state growth for this business? It's very hard. It's very hard to give exact guidance, whether it's 15 or 22 or some other number on it. But we got to look at the fact that the new car passenger car market is growing at 3.4%. It's hard for me to predict what the market will grow in the next nine months' time for the new car market. But I would think we would outpace that by a big number, right? And as you've seen here, when we do, whether we do 15 or 22 or whatever the number is, our profits will grow multiple times that. And I think, as you can see in the results, I think that is very, very clear. But it's hard for us to go around giving guidance exactly what that percentage of growth might be. Got it. My apologies. Just to add to that, Sachin, that the new car, I mean, our new car, not only a new vehicle, the consumer group itself as a whole is achieving its highest-ever quarter performance quarter after quarter, right? I think that one should keep in mind that every quarter it delivers its highest-ever number. I think that's one thing one should keep in mind. Even the numbers delivered this last quarter, even though it's April-June, which is not typically the biggest in terms of the seasonality or the cyclical nature of this business, it still achieved close to its highest-ever number or its highest-ever number in a quarter. Something we also looked to that part that it has done better than Q4 of last year, I think, is already remarkable. Yes. It It is not normal for the automotive industry in general. It's not normal. Yeah. So that's it. Coming to basically on some pieces in remarketing business, what we are seeing is that there seems to be a dip in employee expense both on YOY as well as on QoQ basis. I understand that the business is not growing in terms of, so you might not need more people, but are we sort of getting rid of people, or are we not filling in people who are leaving? No, no. We're not doing that. We're obviously very cautious about cost there. The business is just flattish. We're reallocating costs, right? Suppose the repossession business is regrowing and the retail business is growing, obviously reallocating jobs and people. But we're very conscious of cost in a business that doesn't grow, right, or is not growing. We do feel that we're not cutting investments with the intention of that question, whether it is technology or product or people or operations, etc., etc. But we are conscious of costs in that business to make sure that even any kind of growth we get contributes that if we go above and beyond. But we are conscious of, as I said, we are conscious of cost. Just one final question for me, and this is more of a follow-on to Rujit's questions, but in case of OLX, we have gotten decent 7.5%-8% sequential growth. This growth is driven by more sort of businesses, or they see more people getting listed on the platform and giving you listing as a subscription fee, or this is also driven by price hikes? I remember we were talking about low-hanging fruits and the acquired OLX, and price hikes was one of them. It's mostly the combination of it, but obviously, our tempo right now is not so much price hikes, but it's about really making sure we get more people onto the platform. I think whether it's traffic on one side or it's dealers or advertisers on the other side, I mean, it is important to increase the liquidity on the platform. It's just healthy, and we obviously have to be very careful of just increasing prices. It's more important to get more people on the platform in the near term, right? So we obviously focus heavily on it. But it's very early days, and a lot of work to be done. I think it's only been, as I said, a year for the M&A, and in that period, we've had to do many, many things in the first five months. We've got a very, very stable, that is a good part of the business. If you can see the last two quarters, I think the last three quarters, you'll see a tremendous amount of stability to growth in the classified business and margin expansion and complete transfer of technology and other things. And not only that, what's not coming out in this presentation is really people stability. I think in lots of M&A, you find that the challenge, which in this case, as I said earlier, almost all the PMP or the key management of the company, all of it, in fact, there's actually no one from the key management to invest the team. So it's all of these things. There's lots and lots of work to be done on revenue growth. We're just starting our work, I would say. I would say it will take us, I think the question asked earlier, the potential to grow on the used classified side or in the automotive side is just tremendous. As I said, we feel very optimistic, but at the same time, we've got a lot of work in the next many quarters coming. Understood. Thanks so much, Vinay. I'll end it here. Thanks. Yeah. Thank you very much. The next question is from the line of Sahil Doshi from ThinkWise. Please go ahead. Actually, sorry. Oh, sorry. Oh, definitely. My question pertains to OLX where if we can get some metric related to the paid listings which we have today and how that number has grown over the last one year, and what will be the strategy in terms of that? Because that's when you want to really—like you alluded to the fact that you want to grow the number of transactions and the listings. So it should be good. We acquired since August a reflection of growth in paid listings and the reflection of growth of the revenue of the company. As you can see, the company's revenue growth, as earlier discussed, has gone from INR 43 crore in the last quarter operating revenue, INR 43.4 to INR 46.68 in this quarter. So that is the growth, 7% or 8% quarter-on-quarter sequential. And obviously, as we go on, our objective is to, as we discussed, to keep increasing the number of advertisers. And advertisers for us are two, three kinds. There are dealers for various products: cars, two-wheelers, etc., etc. And then there are consumer advertisers, people like you and me who come on the platform to sell products. But the objective is, of course, to increase both these sets of paid listings or advertisers, as we call it. Sure. Would we be in a position to quantify some of these paid listings? We don't normally give guidance on the revenue and the number of paid listers, which will go up or likely to go up in the future. But obviously, the effort of the company is entirely to increase these paid listers, whether they're dealers or consumers. Sure. I think the first conversation we alluded to the fact that you'll be building out a team for developing the non-auto business. Where are we in that journey, and how do we plan the investments in this for the rest of the year? Sure. That's a good question. We've actually, in the last few months, appointed a head of our non-auto business who's obviously taken charge of all our non-automotive businesses. He was then the CEO of OLX India. Obviously, his job is to run homes, electronics, jobs, household items, and various other categories that exist. He's also now started building out a lot of his team and building out a strategy to grow this business. For us, in the first phase, obviously, used car classifieds came on actually to us as a group, and we focused heavily on that in the first few months. Now we're starting to spend a lot more time on the non-automotive side, and the objective will be to start to keep doing that business as well in the next few months and quarters. But we have built out the CEO. Then, as I said earlier, the investments are in bandwidth and people and our own focus. It's not so much about money because this business is profitable. So whether we invest in field people or we invest in technology and product teams out here, it's not likely to cause any financial investment. It's more likely to be more bandwidth investment, actually, because the business is already profitable. Okay. Okay. Got it. So if I see Q on Q, we've seen—at least on the OLX side, we've seen a sharp increase in the employee costs, and also the resource has also increased. Is this on account of the new hirings and the new CEO also coming in place? And hopefully, this should stabilize going forward, or how do we think about this? OLX's first increase of manpower is mostly on account of increments. There is some manpower increase, but mostly it's on account of increment cycle and increments are given on 1st April. We also acquired the company in between the year, and it's the first increment we've given. So that's what's happened. The ESOP cost has actually not gone up. The ESOP cost was actually the same rate as the last quarter. It was last quarter. It was given in, I think it was given in February. So it was factored two months the previous quarter, now it's three months. So that's what it is. The CEO hire was actually previously in the quarter, so it was not new to this quarter, if that's the question. Yeah. Okay. The question was, because I see a 26% growth on the quarterly quarter-year employee cost, right? So that was slightly higher than the normal increment which you are seeing in a classified business, so. Yes. It is on account of a little bit on account of increments, and I would say some new hires during the quarter. Sure. The employee cost is up. Yeah, okay. I didn't start. But otherwise, the increment cost is actually—is it 26 initially? 13-16? Yes, it is. Is it 26? Got it. Okay. Yeah. It's been increment and hires, I think. Understood, sir. Understood. And sir, we'd really appreciate if you can incrementally share out more data or points on evaluating OLX business for better, like how you do give out the operating metrics for the classified business. Similarly, if you could possibly list out the number of paid listings you have or any other metric which could give us a sense on how the business is growing between auto and non-auto, it would be really helpful, sir. Perfect. Yeah, we will come back on this. I think it's a point which an earlier speaker made as well on some of the metrics for OLX evaluation. Sure. Just the last question with the cash challenge. Oh, I think we have time. May we request you that you return to the question queue for follow-up questions? It's okay. I think if we just quickly finish this, it's okay. Go ahead. Go ahead. Yes, sir. Just related to the cash challenge, do we have a plan on buyback or something of that sort? Aneesha, you want to answer the question? Yeah. So actually, on the buyback, as per our Companies Act compliance, unfortunately, we're not able to do a buyback right now. But the question, I think, when I was also stated of what we—because we have the 782 clause of value, we will buy back when probably the Companies Act allows us to do so, which is once we wipe out all the P&L losses. Understood, sir. Thank you so much and best wishes. Thank you. Thank you. Thank you very much. The next question is from the line of Akshay Satija from Alpha Invesco. Please go ahead. Hi. Congratulations on the great sales numbers and thank you for the opportunity. Sir, I actually wanted to understand a little more on the actual side of the business. I believe we already mentioned that we are operating 400+ stores, and I believe the OLX stores are also included in that portion, and we closing C2B business for OLX. So I just wanted to understand. I had a little confusion, like what's happening on that OLX stores front? And secondly, if you could throw some light on what sort of revenues come in from the SAMIL business, what's the take rate for us, or yeah, slightly on that front, yeah. Sure. Yeah. So we've got in CarWale, we've got the CarWale signature outlets as well as OLX, and we acquired the company at OLX franchise stores. These OLX franchise stores have got nothing to do with the C2B transaction business that we shut. That was more a transaction operating business for a different kind of business. The OLX franchise stores continue to be there. I think collectively between CarWale and signature stores plus OLX franchise stores, it would be more than 200, 220, I mean, probably 225. I'm not sure where the number, but 225, 230 stores. Obviously, our objective is to keep growing this. It's a big part of our focus. It's part of our used car classified businesses on both CarWale as well as OLX. A lot of discussions have happened the last 2-3 months on taking this franchise network of OLX India stores and abSure plus signature stores of CarWale and growing this out. We feel committed to this to establish a very differentiated retail network. So that's the objective here. I think the total, as I said, the total number of stores are close to over 250 stores between OLX and CarWale, abSure plus signature. Okay. So if you could throw some light on the, so we believe all these retail numbers are included in the remarketing business. If you could throw some light on what's the volume difference between the retail and probably the B2B business, and what would be the take rates for us in the retail and B2B business? The retail is about 42% of our business, and the B2B repossession, supply from repossession, is about 46% of our business. So these are rough ratios of the percentages of revenue. The margins, we don't have a cut right now on the different margins, but we did disclose, I mean, we did indicate to a previous speaker as well, that obviously the margins from retail are higher than the margins on retail because just from the nature of supply coming from an individual source or a single source versus bulk supply coming from corporates or big banks and NBFC. So the margins are higher here, but we have not at this point got a margin cut in the financials between the two. Okay. My understanding was we roughly get, so in terms of revenue, if I just simply look at the remarketing revenue and the number of cars that we've sold, it shows we get roughly INR 10,000 per revenue per car. I just wanted to understand, would it be somewhere around INR 12,000 for a retail car and probably INR 8,000 for a? I can't give the exact margin, but the margins in retail are higher. That's the point. I don't offhand can say 12 or 8, but the margins in retail are higher. That is correct. Okay. If you could also just throw some light in terms of what—so I believe India sells 5 million used cars. What would be our percentage in terms of market share? Because I believe the 2.5 million 2.5 lakh cars that we sell every year, it also includes maybe some commercial vehicles. It's not just passenger vehicles. From SAMIL's point of view or from all our platforms' point of view? I think the different things, different ways we address the market. If there are 5 million or more than 5 million used cars sold every year, about, I mean, there's some estimates given that there are about 25%-30% of these consumers, the consumer-to-consumer transaction, which is like me and you selling to a friend or somebody we know, OLX caters to that in a very big way. The consumers list and consumers buy. So we address the used car market across the group in different manners. So OLX completely is the strongest C2C platform in this country for consumers buying and selling. So that's one part of the used car market. The second part of the used car market is those B2C, which is dealers selling to consumers, right? And again, OLX and CarWale are dominant there, where a large, large percentage of these dealers who sell 70% of India's used car sales advertise on OLX and CarWale. And obviously, OLX and CarWale are big, big contributors to that classified part of the market, right? So it's just, as I said, and then comes the auction side, where some part of India's market is of retail consumers or big businesses taking used cars and selling them across or used vehicles selling them across an auction. So there are different, different segments. I think Shriram Automall caters to one of that segment. OLX is another one. CarWale is some other segment. So there's different, different ways we're addressing that 5 million used car market across the different businesses. Okay. Okay. All right. We have managed it from my side. Thank you so much. Thank you. Thank you very much. Thank you. The next question is from the line of Gunit Singh from Counter Cyclical PMS. Please go ahead. Hi, Sir. I just want to understand some basic things about the business. In OLX, our main revenue stream is from the listing fees that the people listing on the platform provide us. Is that correct? Yeah. Then the people include people like you and me who list products and dealers in India. So dealers for cars, tools, electronics, brokers for real estate, etc., etc. All right. One business would be dealers selling to consumers. One would be consumers selling to consumers. That's right. Sir, I mean, what does the remarketing business basically constitute? The remarketing business is about it's got two different segments or two main segments, I would say, where it's a physical and online auction platform where if you're a big bank, like any big bank in India or a non-banking finance company, and if you repossess vehicles, you need a platform to sell them. So these big banks keep the vehicles with us in some cases, and they run online sale on our platform to dealers. So there's a B2B side, and that's one part of our business. The second part is retail users. It could be a taxi owner to a truck owner to a car owner saying, "Listen, I want to sell my vehicle to a dealer." So they come and put up an online sale for these vehicles on our platform to dealers. So it's like a B2B, C2B transaction system. That's the remarketing business. All right. Got it. Sir, what about the retail stores that we have? I mean, what part of business do they? That's part of our classified B2C platform. So if you're a dealer in India selling used cars to consumers on OLX or on CarWale, as a dealer, you can also say, "Listen, I want to become a franchisee of a brand, CarWale or OLX, and I'll take your brand and your processes and your technology and your product." And I will, in a way, being just from a retailer, I'll become a CarWale curated store, which is operated by the dealer and owned by the dealer, but operated under a CarWale or OLX brand plus the software elements of that brand, which is technology, product, etc., etc. All right. So all of our outlets are basically franchise? All franchise. We don't own any stores. We're a complete asset-light company. Sir, what is the margin difference between selling by ourselves and selling with CarWale, say, from the franchise? We don't sell cars ourselves. We don't buy or sell cars in any one of our businesses. We are a platform where we're a marketplace where little buyers and sellers come and sell cars and buy cars. Dealers list and consumers buy. Involving the franchise versus selling just from a platform? Obviously, our margin of franchisees are obviously higher. The more value-added services provide to a franchisee than to a standalone dealer. You can be a standalone dealer selling on CarWale or OLX, or you can be a franchisee doing it. Obviously, our margin of franchisees and our fees are much higher in a franchise store than a normal store. All right. Sir, and I also understand that we also benefit from sale of new cars. Is that correct? That's true. 85% of CarWale's business is new cars. We're a manufacturer and dealer of products for sale to consumers. Cars and two-wheelers both, that is, yeah. So, sir, how does this new car, I mean, business work? In my understanding, what I understood was that, I mean, new cars are just bought from, say, if I want a Toyota, I'll go to the Toyota dealership and I'll buy a car from there. So I think consumers come to CarWale to find out which car to buy, whether it's a Toyota or a Honda or a Ford, any car. And then they do all the work on CarWale and then eventually connect to a dealer through CarWale. That's how it works. Or a manufacturer through CarWale. Sir, I mean, does this happen online or is it from some physical stores? It happens completely online. The stores which advertise are physical. All the dealers advertise on CarWale. All right. So sir, I mean, what kind of revenues do we earn? I think what we can do, because this is more into detail. I think what we can do is an earnings call. What we can do is maybe offline, if you contact us, we will spend time and explain this entire thing because we're going into, as I said, it's an earnings call, so we should better do this to the earnings and the later quarter performance. We're getting into the very core of the business and the strategy or the background of the business. It's probably better to do it in a separate conversation, I think. Sure. Thanks, Lord. Most of the questions were already answered. Okay. Thank you so much. Thank you. Thank you very much. Ladies and gentlemen, that was the last question for today's call. I would now like to hand the conference over to the management for closing comments. Thank you, everybody, for joining the call and going through this earnings performance update from the company. As I said, we're going to be very excited about the company's future and also excited about the results for the last quarter. Look forward to seeing you again. Thank you so much. Bye-bye. On behalf of CarTrade Tech Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.