Ladies and gentlemen, a very good evening, and welcome to Eternal Limited's Q1 FY 2027 earnings conference call. From Eternal's management team, we have with us today Albinder Singh Dhindsa, Akshant Goyal, and Kunal Swarup. Before we begin, a few quick announcement for the attendees. Anything said on this call which reflects outlook for the future or which could be construed as a forward-looking statement may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements. Additionally, please note that this earnings call is scheduled for a duration of 45 minutes, and we'll be starting directly with the Q&A section of the call. If you wish to ask a question, please use the raise hand feature available on your Zoom dashboard. We will announce your name on the call and unmute your line, post which you can proceed with your question. We will wait for a minute while the question queue assembles. The first question is from the line of Gaurav Malhotra from AXIS. Please go ahead. Yeah. Hi. Good evening, everyone. Congrats on a good set of numbers. Just a couple of questions. Firstly, you seem to have raised the long-term guidance in quick commerce from 5%-6% towards 6%. What gives you this confidence to do this now, especially when there is competitive intensity in the sector? Yeah. Hi, Gaurav. I think this is what we are seeing in the business. I think what we're trying to communicate here is that over time, we have increased the CapEx per store in our business, right? Some of these investments are leading to increase in efficiency in the business. It's also a function of the increase in average store sizes, et cetera. All these investments are clearly lining up in a way where we have now higher visibility on the margins, and we think at this point that we're likely to end at the higher end of the range that we had guided earlier, hence the communication. Understood. Okay. The next is, you mentioned the older cohorts spending 3x versus three years back. Just wanted to get a sense of the split between how much of this is related to order frequency and how much is it related to the AOV growth. Gaurav, we don't share that data, but directionally, most of it is frequency growth. I think with passage of time for a customer cohort, we see that AOV kind of stabilizes. It grows, but only slightly, and most of the growth comes from frequency growth. Got it. Just one last question. How much of this growth, which we are seeing at an aggregate level in Blinkit, how much of it is coming from existing cities versus geographical expansion? I think most of it is from existing cities. Okay. Thank you so much. Over all markets. Thank you. Thank you. Next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi. Good evening, team. My first question on Blinkit, two parts. On your response in question number eight, you have mentioned two points, if you can please elaborate on that. You have started with a statement, "No competitive intensity remains high, but it has become more predictable." Can I request if you can elaborate on this? Do you also think that this is, let's say, the first quarter has been the peak of competitive intensity or the phase where we are, the highest competition is at this point of time? Yeah, Vivek. First quarter, so far it was the peak of competitive intensity that we have seen till date, both because number of players were higher and everybody was more aggressive. When we look at competitive intensity, and the way that it has evolved over the last few quarters, what we are seeing is that most of the competition is coming in providing subsidies to customers on products and also on delivery fees. That is what has become more predictable, that most competitors are going towards grocery subsidizing, which we are fairly clear on what we do in that and what is the kind of impact that this has on the business. We don't think that there is a lot of wiggle room for people to go much, much deeper than what they are currently going, because that would balloon losses fairly significantly. That's what we mean by it is fairly predictable now. Interesting. Got it. The second part also, if you can elaborate on this. You have mentioned pricing-led growth requires sustained cash burn and leads to systemic trap they can't easily walk out of. Can you just elaborate on this piece also? We are fundamentally a supply creation business, if you channel your supply towards providing discounts to customers, that's what the business becomes. Every time you want to pull away from that, there is nothing else to offer to the customers, because that's what you got the customers in the first place for. There is no pullback in this. Like we also explained that there's no pullback that you'll pull the discounts and the customers will stay, because you got the customers by promising them a subsidy. They'll try to move to the next platform or the next platform, or they will drop out of the category. We don't see a recovery for platforms from this trap if they are acquiring customers by giving a lot of subsidies. There is no path to recovery of saying that they'll be able to retain those customers when they pull back the subsidies. Vivek, just to add, I think this is also coming from our own experience in the past. I think couple of years ago, when we were building out this business, we were, in many major cities, number three or four player. Our initial approach in those markets, like a typical e-commerce thinking, is that, "Look, let's start discounting and get customers, over time the investment will pay off." That didn't work for us initially in some markets in the south. Eventually what worked was working on the infrastructure growth, which Albinder mentioned. We have the outcomes in front of us. Now we are the leading player by NOV in most of these markets. We strongly feel that discount-led growth is not sustainable in the business, that is what has become predictable. We're able to more confidently plan our next few quarters on what we need to do. Got it. Just last one. On the same point, you already have a number of MTUs which is comfortably over 30 million. I'm sure the industry is growing so rapidly. If you have to double this number, so let's say 30 million + 30 million, do you think with the current strategy not discounting at the time where the intensity is very high in the market, the service quality and whatever you stand for will still be able to allow you to do that? Or there will be a cohort of customer which will be price-sensitive, and therefore getting incremental customer from this stage will require more probably discounting on your part? Vivek, our strategy in these things is that it's not like we don't give customers value as well. As our platform has gotten bigger, our profitability's gotten better. There is a certain amount that we keep reinvesting back into making our product prices more competitive, giving customers actual value, which allows us to also then be able to tap into deeper customer cohorts, which might be more price-sensitive than the ones that we currently have. That process will continue. That's a gradual process, whereas the platform gets bigger, we pass on more benefits to the customers. It allows us to tap into a larger market, and I think that is where the additional MTUs will come from as well. Also, Vivek, we don't think this level of discounting is sustainable, as we said. We expect this to not continue beyond the near future. We do think that this will come off and therefore, the pressure on us needing to discount just to maintain competitiveness on price will go down. Even with that, the prices can come off with scale, that's then a choice that we make, to pass on the benefits of scale to customers rather than actually trying to compete with price on someone else. Got it. Thank you. Wishing you all the very best. Thanks. Thank you. Next question is from the line of Aditya Soman from CLSA. Please go ahead. Yeah. Hi, good evening, and thanks for the opportunity. Two questions. Firstly, on Blinkit, we saw a lower AOV now for two quarters in a row. While we've seen very strong order growth, can you just explain what led to this drop in AOV? Last quarter, I understand there was an element of seasonality, but we've seen it drop a little bit more. Just maybe related to that, with sort of the delayed monsoon, what has been the impact, if at all, on the business or any changes in the mix or anything of that sort? Secondly, on food delivery. The absolute number of monthly transacting customers you're adding is actually increasing every quarter. Is this a function of new customers coming to the fold or just a faster conversion from the ATUs? Also any sense on frequency here in food delivery? I think on Blinkit, the AOV drop is still in the same range as we were last year, but most of this drop is usually just related to small changes in the patterns that happen during the quarter. Overall, in terms of the throughput and the category to change the AOV. Some of it is also can just be related to lower product prices because there is a lot of competitive intensity, which also forces us to price match on a lot of things. Those can also have an impact on lowering AOV. Generally, Aditya, we're not expecting the AOV to grow from here. If you look at year-over-year, it's flat. That accounts for seasonality for Q1. We expect broadly AOVs to remain in the same range. In Q3, they might climb up again because of seasonality, but broadly, ballpark, we don't think they should move up in a meaningful way. Understand. The right way then to understand this is the focus remains on order growth and maintaining AOV at the current level, which is already profitable. Yeah, AOV is more an outcome. We don't drive that. I think the mix of the categories and the products and the assortment that we have leads to that AOV. Eventually, what is important is the NOV in the business and the margins. As long as they move in the right direction, we don't worry too much about AOV because there could be smaller categories or products which are high margin and vice versa. Beyond a point, AOV doesn't dictate the margin structure too much from here on. No, very clear. Thanks. The food delivery question. Yeah. On food delivery, I think the increase in MTUs is a combination of both. Addition of new users. I think we've seen acceleration in new users that we've added to our platform in the last three or four quarters. The category is growing, as well as it's a function of more customers transacting more frequently. Right. Both of them are playing a part in the growth in MTUs which we are seeing, which is driving growth. Oh, very clear. Just to be clear, this does not include Bistro, right? No, there is no Bistro overlap in our disclosures, right? Neither in NOV nor in the bottom line. Correct. Yeah. Very clearly segregated. The Bistro business is also in a separate entity, so I think the segregation of accounts is very clear, and there's no overlap in this food delivery business. Perfect. Very clear. Maybe lastly, since we are on Bistro, just if you can give a sense of how many kitchens you have now and what the current state of the business is. I think broadly, we are adding about 10 odd kitchens a quarter. That's the pace of expansion there. What is encouraging is in some of our older kitchens, we are seeing a lot of progress in throughput. We feel like we're getting the mix of right assortment, menus, menu pricing, and operational infrastructure and efficiency right. I think as we iterate and make that better, we will see the business becoming more profitable. We can be then more aggressive on expansion as we build that confidence. It's the same mindset we had while we built out Blinkit, that you get things right, basic processes which you know need to be fixed, and as you do that allows us and gives us more room to more aggressively expand in the future. I think we'll be cautiously expanding for now, but at some point that it can accelerate once we are more confident about the business. Right. No, that's it. Thanks very much. Thank you. Next question is from the line of Swapnil Potdukhe from JM Financial. Please go ahead. Hi. Thanks for the opportunity. My first question is on Blinkit. You mentioned last quarter that there will be some bit of seasonality in the Blinkit business and that will help you grow meaningfully faster, and you did deliver 21% QOQ volume growth. I was looking at your historical data as well. It seems that between 1Q and 2Q, typically grow between 18%-20% in volume terms. In fact, last year, you grew 26%. Will it be fair to say that we should be looking at a similar kind of a growth in 2Q as well, and broadly in line with the historical range, if not more? Sorry, Swapnil. We don't want to comment on the quarter right now. No guidance on that. Okay. The second question is with respect to your take rates in the Blinkit business again. You are seeing some decent improvement in the take rates, but that doesn't seem to be flowing down to your contribution margin. Is there any particular reason that is hurting you here? Ideally, a decent proportion of your take rate increase should flow down to contribution margin, right? There was some increase, Swapnil, in the cost of doing business in the quarter, because there were a lot of states which implemented increase in minimum wage. That was one factor. Also, we are also opening now larger stores, so some of that contribution also comes from earlier stages of these stores, the contribution is lower than when we opened smaller stores. Yeah, again, Swapnil, it's a seasonal business, so in Q1, the last mile costs are also usually higher because of summer and heat and various other factors. If you look at year-on-year, you see that a large part of gross profit increase or take rate increase has translated into contribution increase. Right? On a more, I think, longer term, the right metric to compare with is the Q1 of previous year. It could be different for quarter-to-quarter, depending on seasonality. The margin could be higher because of mix change also. Right? Those things are also in addition to what Albinder said, I would like to note. Got it. The other question is with respect to your CapEx guidance that you said. You say, "Per store basis, one should look at around INR 2.5 crore of CapEx." You added around 200 stores this quarter, but your CapEx was INR 700 crore. There is a meaningful difference between what you're suggesting as typical CapEx versus what is there in your cash flow statement. Can you just help us- I think we should look at this number more longer term, Swapnil, because I think there is a lumpiness in investments here. While we are presenting the information as CapEx per store, but a large part of the CapEx is in warehousing. Right? That investment is lumpy. If you will therefore look at last six month, nine months, or longer term our CapEx and look at the CapEx per store for that period, you will find it is lower than INR 2.5 crore. We expect therefore that to continue going forward. Right. Just a last one on your NOV retention data that you mentioned that, over a three-year period, typically a cohort of customers see 3x increase. When you give this data, this data is for only those customers who you have retained or this also includes customers who may have left the platform and never come back after three years? Yeah. It's for the overall cohort. Right? If you are acquiring 100 customers in a quarter, the percentages are for the entire 100. Right? If 40 of them never show up again, then the retention is only 60%. Right? Despite that, you will have 3x increase is what you're suggesting. That's right. Yes. For the cohort that has remained, therefore the growth is much higher. Right? At a full cohort level, the numbers are what we have presented here. Got it. Thanks a lot for the opportunity, and all the best, guys. Thanks. Thank you. Next question is from the line of Jignanshu Gor from Bernstein. Please go ahead. Hi, Jignanshu, are you there? Seems like you're facing some technical difficulties. We'll move on to our next caller. Next line of question is from Vijit Jain from Citigroup. Please go ahead. Yeah. Hi. Thanks for the opportunity. Congratulations on a great set of numbers. My first question. You mentioned you plan to add gourmet stores in these tier 1 cities, right, as you focus on assortment in these cities. Does that mean split orders in metro cities in the future, or are you thinking of these stores as generally housing more expensive assortment, but housing everything? That's my first question. It's a combination of both, Vijit. Depends on the kind of real estate that we get. Right. Our gourmet stores have different infrastructure requirements, so if we are able to fulfill it within the same stores. Like I've said, we are opening larger stores, so we have the ability as well within some stores. Got it. Is there any consideration that split orders is not a good user experience? Is that the case at all, or in your experience, that has not really been a factor at all? Yeah, as a platform, we do want to make sure that we're not tilting too much towards split orders. The customer experience could be not as great. So far, we have not experienced that in practicality. I think customers value the availability of products more than the split orders. Understood. My second question is, in that comment on competition, I know one of the previous callers already talked about it a little. You also said that discounting, you believe, is even less effective in quick commerce than quick e-commerce. I wanted to just double-check. You say that because quick commerce is a higher frequency engagement and that habit formation and expectation of discounting becomes more entrenched here. Is that why you're saying that or is there more to it? No. I think the difference is, I think, on the real estate available, right? Quick commerce, you're working off smaller store sizes, right? You have a limited shelf space, right? If you are discounting in categories where the margins are low- I see. You discount on them, that's all that sells from that store, right and you don't have space to actually really increase assortment. Even if you increase assortment, the reliability of net availability is not there for the customers, right? I think that's the fundamental difference. In e-commerce, you have large warehouses, right? You could deliver into- you get more customers looking for grocery items that are highly discounted. Theoretically, you can still offer and fulfill wider assortment, right? Here- you're working, the constraint is the store size. That's why I think it's different in case of quick commerce. Got it. Understood. One last question. That comment on EBIT margin of 4% and adjusted EBITDA margin of closer to 6%. I want to be just clear because you say EBIT margin of 4%, not adjusted EBIT. Are you including ESOP expenses when you say EBIT margin of 4%, or are you including something else? Yeah. There is ESOP expenses and there is depreciation, right? We are accounting for both of them. Okay. You get to a GAAP EBIT margin of 4% as long-term. Got it. That's right. Understood. If I can just squeeze in one last question on inventory losses. You say that it's about 1.8% of NOV and largely driven by perishables. Practically speaking, does this go down from 1.8% or it's a harder problem to solve, aside from, of course, the mix changing? It has been fairly asymptotic so far, so we don't expect it to be materially much better. Got it. Do you net it at the gross profit level? That's right. That's what we mentioned also in the letter that. Okay. Last line of question six, that we. Okay. All the losses are netted off from gross. I mean, they're part of COGS in a way, right? Gross profit is net of inventory losses. Understood. Thank you so much. Those are my questions. Thank you. Next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead. Hi. Just couple of questions. Firstly, can you provide some color on the growth differential across bigger cities and the smaller towns in Blinkit? Yogesh, obviously the non-metro cities are obviously growing faster because they're also growing off a smaller base. The percentage growth rates obviously will look much higher over there. Whatever competitive intensity we see, we see mostly starting off within grocery in the top-tier cities. There is some impact of that over there. Although we are still seeing robust growth in the tier 1 cities. We think there is some share shift also which happens over there, which lowers the numbers that we end up seeing. Right. Thanks. Just the other one, based on the new economics for the stores, I think now since they are bigger stores, you're looking at 2,100, 2,200 OPD per store per day. Is there a possibility to modify the existing stores for them also to do 20 similar level of throughput going forward? Or we are close to peak there in terms of size and throughput? Not as a regular exercise. We've been upgrading a lot of the existing stores also to find more optimal properties which are larger, and move to larger store sizes. Right. Thank you. Thank you. Next question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Hey, thank you. Looks like a nice growth recovery in QC. Do you think you're back to regaining share in the market or is the industry growth really is better than expected in the quarter? We don't know. It's speculative, Ankur, I think we are more focused on what we can rely on is our data. As we mentioned, for us, the tracker is customer retention, which I think is better than what it has been. From our vantage point, therefore, if the market is expanding faster than us, really doesn't matter to us. Got it. Just in response to Vivek's question, you had mentioned that you have been passing on some benefit of scale as value to customers. How do you distinguish between giving customers value versus discounting you see from your peers? We usually don't look at whatever discounting is happening from the peers beyond a certain point. Our baseline is usually what we think product prices can be sustainable in the long run, that is sort of what we index towards. The idea is that if our business is generating more efficiency and we can actually lower those prices even further, that is when we actually take those price decreases. We want to sustainably stay at those prices for the foreseeable future. We usually don't discount for a shorter period of time just to get some customers. Got it. Just a follow-up. It was a nice surprise to see a very nice sharp increase in MTUs in quick commerce, despite a lower spend in marketing and fewer store ads. Is there anything you did differently this time to increase the MTU addition here? Not really. Just last question on food delivery then. Can you elaborate how you have responded to pricing and only given you have accelerated this quarter and doesn't appear like there's been any share loss despite lower customer fees from these formats? I think as we mentioned also, Ankur, in the response to question three, that we're trying to be price competitive in certain markets where these platforms are more aggressively spending. Right. So far, that's been enough to be able to make sure we are able to defend and not lose share to these platforms. Okay. Understood. One of the big things that we did was actually last year when we dropped the eligibility for free delivery for a Zomato Gold member to INR 99 instead of INR 199. That's one example of how that reduces the cost for a customer which is seeking a low-value order. Understood. Appreciate it. Thank you. Thank you. Next question is from the line of Abhisek Banerjee from ICICI. Please go ahead. Hi. Yeah, thanks for the opportunity. Again, very sharp numbers. Just on the CapEx per store bit, you're giving INR 2.5 crore now versus INR 1 crore earlier. Is that INR 1 crore should be comparable in terms of did you used to include warehousing fees also in that INR 1 crore number? That's right. Okay, good. On the net working capital side, you have actually managed to reduce it to 12 days. When you were actually going to the inventory mode, I think the thought process was that if you increase your assortment, it can actually increase from that 18 days number. What has kind of helped you reduce it further? Is it just terms of credit or something else? I think, see, 12 days is what we are saying here is like a steady state estimate right now. Currently, as we mentioned in question five, we are at 14 days, right? What has changed, like, what has helped us reduce it from 18 to 14 and what we think will take it to 12 further is largely, I think, on account of lower inventory days than what we initially thought we need to carry, right? That I think as the replenishment and the throughput from the stores and the supply chain has been able to achieve a lower inventory days number in the business, and I think that's been the main driver of this reduction. Understood. With regards to your OCF, right, there is a tax reversal, which has come in, which is right now OCF number is very high this quarter. Is that kind of a sustainable level going forward? Also if you could give some color on the taxation bit, that would be really helpful. Abhisek, this is Kunal here. The tax refund was on account of a refund because there were certain expenses which were ambiguous on whether they'll be allowable. We had deposited higher advance tax, there's a refund towards that. That's normal course of business. I think such things may come up once in a while going forward as well, but nothing structural. Got it. Could you also give some color on the Nugget business? Like exactly what is it that you are doing there? If you could give some clarity on that. Abhisek, I think we'll share more about it in the coming quarters. I think we are still in some ways in a little bit of stealth mode here, right? It's an enterprise AI product and business and I think we are seeing good traction in that, but it's evolving market, as you know, right, the entire AI space. I think we want to take a couple of more quarters and build our thesis more strongly around this and then we'll share more about this business going forward. Got it. When you're saying expenses, because your losses have kind of increased there. Is it on manpower or is it on buying GPUs and stuff like that? If you could just give some clarity on that. Largely manpower. Man. Okay, great. One question that is not really a quarter question, but since you've already spoken about how there's no really point getting users beyond a certain number of MTU, right? Could you give us some color on what does a Pareto ratio kind of look like in QC? We already know that it's very steep in food delivery. In QC, is it steeper than that? Or how does it kind of look? If you could give some color. Abhisek, didn't understand your question. Say in food delivery, right? Maybe your top 15%-18% customers already drive 80% of revenues. How does that ratio kind of apply in QC? If you could give some color on that. Much flatter than that. It is flatter. Got it. Cool. Thank you. Next question is from the line of Manish Adukia from Goldman. Please go ahead. Hi. Good evening. Thank you for taking my questions. My question actually is a follow-up on what was discussed earlier. Akshant, when you say that your AOV should remain range-bound in the foreseeable future, when you also talked about the cohort data earlier, you said that a large part of that expansion was a function of frequency and not necessarily AOV. Right. I'm just trying to reconcile that with, one, your assortment expansion over a period of time, where non-grocery has continued to expand from an assortment perspective. You're already talking about gourmet as also an added focus area from an assortment perspective. When I think about MTU expansion in the near term, I understand why average AOVs may not expand. Over a period of time, if I look at today, your basket size, your probably MTUs are spending less than INR 2,000 per month on your platform. Why should that number not be substantially higher in two to three years from now as MTU growth maybe starts slowing down at some point in time? If you can just help maybe explain that a little bit better, that'd be great. Thank you. Manish, I think the wallet share will increase, right? We are not saying a customer will spend the same amount of money, right? There's a distinction between wallet share and AOV, right? When we say AOV are unlikely to increase, despite assortment expansion, I think what we are saying is a lot of assortment that we are adding is also low-AOV assortment, right? There is that element which you have to acknowledge. Also, I think as frequency of consumers go up on a platform, we see that they really start ordering fewer items in a cart, right? Because it becomes a daily use case and as customers, we have seen for ourselves that the order sizes need not be INR 400, INR 500 for every order as you become a more frequent customer. There is, therefore, a drag on AOV from both these sides where, as frequency goes up, we see the AOV flattening out and also the assortment expansion in many of the general merchandise categories is actually small. The margin is higher, right? That doesn't hurt us. Net net, therefore, while there'll be an inflationary pull on AOV, there'll also be a pull on AOV expansion because of some assortment that is higher AOV. As a combination of all of these factors at this point, we feel that AOV expansion is not something that we see happening at this point. Got it. Very clear. Thank you. My second question was, again, maybe a follow-on to one of the previous questions. When you look at, let's say, your CapEx per store assumption, where you have now increased that by 150% versus where you had earlier, your NOV per day per store assumption is only up by 60%. How do I reconcile the difference between these two numbers? Why should NOV per store only go up by 60% when you're talking about CapEx expansion of 150% versus previous assumption? Manish, the CapEx expansion has a lot to do with the overall supply chain and not just the stores itself. The efficiency of the supply chain goes up because we are able to store more products in a single warehouse. We have pure requirement if we are able to do more CapEx and put more products in the same warehouse, ship them more efficiently. That is why we are doing that CapEx. The correlation to how it goes to, it is not only correlated to the store throughput. Another way to think about this, Manish, is that the higher CapEx with lower NOV growth can be explained if you are expanding the market, right? I think what we are solving here is actually trying to expand the market while making sure the ROC is healthy, right? For example, opening stores in smaller cities could lead to a lower NOV per day per store, right? If that NOV is still profitable at 6% margin, then that increases the top line for us, right? That's the whole point. I think the spirit on this topic is that, look, we are open with these numbers moving around, right? The CapEx per store, the networking capital or NOV per day per store, even the margins, EBITDA and EBIT margins. As long as the maths on ROC is stacking up well, right? The more we invest, even if the margins fall, for example, but if the ROC remains high, the absolute dollar of profit on the business will be more, right? That's how I think I would look at it. My just last question is on margin. Given that you mentioned that competition's become more predictable, so you're not seeing any material pressures of that or your margin's going to expand, despite that, and you also called out that June was probably at least closer to peak, if not the peak of competition. Is it safe to say that as long as growth in the business continues as per your expectations, which you said should be robust, there are no near-term pressures on margins that we should anticipate, and directionally, margin should continue to improve. Is that a fair conclusion? I think so. I think at this point, we can say that. Thank you so much. Very clear. All the best. Thank you. Next question is from the line of Garima Mishra from Kotak. Please go ahead. Yeah. Thanks so much for the opportunity. I had a couple of questions on District. You mentioned in the letter that District is operating across five categories. I presume out of those five, Dining-Out and movies are the largest revenue contributors. Is that correct? What traction are you seeing for the newer categories, let's say, events, activity outlets, et cetera? Yeah, Garima, that's broadly correct. Today, dining out and movies are the bigger categories. Amongst the newer ones, I think, retail stores and events could be the more promising ones. We are still early in that journey. We're seeing good traction. I think at this point, the idea is to figure out how much value we are able to add to the supply ecosystem. Also from a customer experience standpoint, kind of work on areas that improve customer experience. I think that's the journey we are on the other categories. Difficult to say what kind of trajectory of growth we'll be able to see. As of now, things are promising. Okay. Second, in terms of users, how would the MTU base of District compare with, let's say, that of the food delivery business? Should we assume that District is present in as many cities as, let's say, the Dining-Out or food delivery business is present in? Garima, like we pointed out in the past as well, for the Going-Out business, I think, we certainly think of the customer base as slightly different from the food delivery business and a base that is able to spend more and that's also reflected in the AOVs that we see in District. I think, we wouldn't compare it, but we think there's still enough room to grow even at this AOV base for the District business. It's definitely a smaller customer base, Garima, for Going-Out compared to food or quick commerce. The number of cities that we will do this business in will also be much smaller than the other two businesses. Understood. Got it. That's it from me. Thanks. Thank you. Ladies and gentlemen, in the interest of time, we will now take the last one to two questions. The next question is from the line of Aditya Suresh from Macquarie. Please go ahead. Thank you for the opportunity. Two questions. First is on the productivity gains which you'll have seen in the past, say, two quarters. Can you maybe just talk through that a little bit and how you see that trending, in the next few quarters or maybe on a, say, two, three year basis? That's the first one. The second is, Akshant, as the business stands today, if you were to kind of measure or calculate ROC, what would that be like? Thank you. I think right now, of course, EBIT margin is negative, there is no ROC, right? We are all talking about future here. It's a business and industry which is in the making right now. We're trying to invest. I mean, the framework we've given for ROC is a framework for us to think about on how much to invest in the business, right? As of today, given the margin in the business is negative, there's no ROC. I hope that answers your question. Yeah, that's clear. Thank you. On your first question, Aditya, can you be more specific? I mean, it's a very generic question, like. No, you have seen productivity gains at dark store level in the past few quarters, right? Whether that be on a per order basis, or a NOV basis. Can you maybe just talk through beyond just cohorts maturing, is there any other dynamics which are at play which is driving this improvement? It's everything. I think, not just last few quarters, we have seen the productivity improving since the time we started the business. Right? The productivity gains are at the dark store level, at the warehouse level, supply chain, even our marketing is getting more efficient, right? Assortment. I think it's everything the business is about. Yeah. Again, not sure, like if you have a specific question here, but otherwise the answer is what I just said. Great. Thanks, Akshant. Thank you. Next question is from the line of Ashwin Mehta from Ambit. Please go ahead. Yeah. Hi, can you hear me? Yes. Yes. Just two questions. One, in terms of payables, there seems to be a material increase of almost INR 1,650 crore this quarter. What exactly is driving that? Secondly, a broader view in terms of are we getting better terms from brands, et cetera, in terms of payables? The second one was in terms of food delivery, where the restaurant count this quarter seemed to have gone down. Is there some rationalization at play? How are we seeing additions there? On the first question, payables includes both trade payables as well as expense payables. Trade payables has increased because of the increase in the scale of the business, right? At this point, we are not necessarily trying to over optimize on terms with the brands. It's really more driven by scale. Then expense payables keeps fluctuating. There's nothing to highlight on payables. Payables, these are fairly on expected lines. On the second question, Ashwin, I think there's a little bit of impact of the LPG situation in the country, in the last quarter because of which some restaurants went offline. I think that's why probably you see a slight dip in the monthly active restaurant partners. Thanks. Thanks, Akshant, all the best. Thank you. Thank you. Ladies and gentlemen, we will now conclude this conference call. Thank you for joining us, and you may now disconnect your lines.