Ladies and gentlemen, good day, and welcome to the Just Dial Limited Q4 FY 2023 Earnings Call. At this moment, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. At that time, you may click on the Raise Hand icon to ask a live question. Please note that this conference is being recorded. We have with us today Mr. VSS Mani, MD and CEO, and Mr. Abhishek Bansal, CFO from Just Dial Limited. I now hand the conference over to Mr. Abhishek Bansal, CFO from Just Dial Limited. Thank you, and over to you, sir. Thank you, moderator. Hi, everyone. Welcome to Just Dial's Earnings Call for Fourth Quarter of Fiscal 2023. Our operating revenue for the quarter stood at INR 232.5 crore, witnessing 5% sequential growth and 39.5% on a year-on-year basis. Year-on-year growth seems higher due to COVID-impacted quarters in last fiscal year, fiscal 2022. On a per-day basis, QoQ revenue growth stood at 7.4% in last quarter. Our Adjusted EBITDA, excluding non-cash ESOP expenses, stood at INR 35.6 crore, representing an Adjusted EBITDA margin of 15.3%. Our employee expenses have increased 29.2% on a year-on-year basis, led by about 37% increase in average headcount for the year. Last year, we have done primarily recruitment in our sales, technology, product, and content teams. On a sequential basis, employee expenses were relatively controlled at just 3% QoQ increase, with headcount remaining almost flattish. Our advertising expenses for the quarter stood at about INR 6 crore. Other income stood at a normalized level of INR 74.2 crore for the quarter. Profit After Taxes stood at INR 83.8 crore, representing a growth of 278% on a YOY basis, due to low base effect, and 11.3% on a sequential basis. For full year, revenue grew 30.6% year-on-year to INR 845 crore. EBITDA margin, excluding ESOP expenses, stood at 11.3% for the year. Overall, as we see, fiscal 2021 and fiscal 2022 were impacted for us due to COVID, but the business has been able to bounce back very strongly this year. In fiscal 2023, our collections stood at almost INR 945 crore, representing about 44% year-on-year growth. We sold about 68% of our contracts on monthly plans this year. As a result of which, monthly ECS collections have witnessed very strong growth. Our March month ECS collections from customers stood at about INR 45 crore, which was just about INR 26 crore a year ago. This essentially demonstrates that we are exiting the year on a relatively strong note. As far as margins are concerned, they are also on an improving trajectory. As we have mentioned earlier, most employee costs hit our P&L immediately, but corresponding uptick in revenue recognition happens with a lag as services are rendered. While reported EBITDA stood at INR 96 crore for the year, excluding ESOP expenses, there was a INR 100 crore difference between accrued revenue and collections for the year. As and when revenue catches up with collections, margins will see expansion, which is also visible on QoQ basis. Deferred revenue was also very healthy at all-time high of about INR 438.2 crore, growing 29.6% on a year-on-year basis and 8.9% sequentially. This was led by strong 4Q collections, which were about INR 268 crore, up about 9.5% sequentially. Active paid campaigns at the end of the quarter stood at 538,000 approximately, which was up 16.6% year-on-year and 3.1% sequentially. Overall, cash and investments stood at INR 4,067 crore as on 31st March. Coming to operating highlights, traffic stood at 159.3 million unique users for the quarter, growing 10% year-on-year. 86% traffic comes on mobile, and mobile traffic is growing at about 13% year-on-year. Total listings now stand at about 36.5 million. Both desktop and mobile platforms are seeing revamp, and several user-friendly features are getting added as we speak. Overall, if I were to summarize, FY 2023 was a very healthy recovery year for us. Our assessment is that we are exiting the year on a strong footing on most parameters. For example, traffic is close to pre-COVID peak levels. Current traffic came in at almost 65% lesser spends versus pre-COVID advertising run rates. Paid campaigns have surpassed pre-COVID levels as well. Most of the top-line driving parameters, such as collections, the deferred revenue, are all quite healthy. Pre-COVID, we used to get just about INR 20 crore, INR 21 crore on a monthly basis from our monthly plan customers, but that, as I just mentioned, stood at INR 45 crore for the exit month. Margins on reported basis are in mid-teens, but, with respect to collections, they were still 25% plus in fourth quarter. Our endeavor this year would be to build on a strong base, which is laid down in fiscal 2023. With this update, we shall now open the floor for questions for further discussions. Thank you. Thank you very much. We will now begin the question-and-answer session. To ask a question, please click on the Raise Hand icon available on the toolbar, or you may click on Q&A icon to raise hand. The operator will announce your name when it is your turn to ask a question. Please accept the prompt on your screen and unmute your microphone while proceeding with your question. We will wait for a moment while the question queue assembles. We have our first question from Vivekanand Subbaraman from Ambit. Please go ahead. Hello. Thank you so much for the opportunity. I'll start with the bookkeeping question. Could you help us, Abhishek, with the split of the paid campaigns by top 11 cities versus the non-top 11 cities and the revenue split? That's one. Secondly, Abhishek, I think in an interview today on television, I think you mentioned a little bit about JD Mart and its progress. Could you help us understand the journey of JD Mart? I mean, it's been almost three years since launch. What does it contribute to revenue? What is the, you know, percentage of manpower there? What is the realization? obviously also in terms of, let's say if you are able to quantify the operating margins there, or any other qualitative aspect, that'll be very helpful. Thank you. Vivek, on your first question regarding tier one versus rest of the cities. Tier one cities contributed about 61% to revenues and about 41% to paid campaigns. Essentially our ticket size in tier one is more than twice of what we have in tier two, tier three cities. On JD Mart, the platform is shaping up well. The way we look at it is B2B segment now contributes over 26% of our overall revenues, versus three year back, this contribution was just about 20 odd percent or so. In terms of traffic as well, these particular categories now get almost 10% of our overall traffic. In order to monetize this segment better, there is a 700-750 member dedicated team that is working on monetizing these B2B categories. Even going forward from next two to three years, I think, this particular segment should be the key driver for growth for us. In B2B segment, most of the SMEs do require a platform such as ours to get to reach out to customers pan-India. Okay, this is very helpful, Abhishek. Just a couple of follow-ups on JD Mart. When you say 26% of revenue, this is exit or is it fiscal 2023? That's one. Secondly, could you give us any color on the realizations on the JD Mart side? Also, when I look at Similarweb, right, it shows that the traffic doesn't seem to be very big in jdmart.com. Perhaps you are getting still a lot of traffic in these categories on justdial.com. Could you help us understand this better? Also, you know, when you say that this is going to be a key driver, how is it that you will drive revenue growth here? Is it going to be getting more SMEs to pay for JD Mart, or is it going to be getting more revenue from the existing ones who are already paying you? If you could help us with some of these things, that would be helpful. The 26% revenue contribution is for the full year. The exit run rate would be probably half a percent or 1% higher. As far as realizations are concerned, realizations on the B2B side broadly should be, I think, 10%, 15% higher versus the rest of the paid subscription business that we have. Coming to your point on traffic, the way we look at this particular traffic is that pages which are specific to JD Mart, all the B2B pages, which could be a product page for a particular B2B digital catalog or a specific results page. Those particular pages are available both within JustDial ecosystem as well as the new JD Mart ecosystem. For a merchant setting up a B2B listing, it does not matter to them whether a particular inquiry was generated from JustDial or JD Mart. Justdial has a very strong, SEO recall, SEO rankings, so it makes sense for us to be to leverage those particular rankings for even B2B related pages. Overall, we look at it on a combined basis that out of the 159 million users that I'm getting, on a combined basis, about 10% of the traffic came for these B2B related pages. Makes sense. Thank you so much. I'll skip back in the queue. Thank you. Thank you. We have our next question from Nikhil Choudhary from Nuvama. Please go ahead. Yeah, Abhishek. I have a couple of question. One is regarding the contribution of B2B, which is already at 26%. What is your expectation going forward? What kind of contribution it can become in the next couple of years? Nikhil, good part this year was that there was relatively broad-based recovery, and even the B2C side of categories had a very strong rebound in our 50% year-on-year collections growth. B2B segment is having a relatively higher growth, this 26% over the next two to three years, our assessment is could go to, say, 33% to 35% or so. We'll obviously keep assessing as each quarter, each year passes by. Sure, Abhishek. second is, in, one of the interview in the morning you mentioned about, your collection margin, hitting, 25%. just want to understand, what would be the timeline basically in terms of its conversion, and its impact we can, fully see in our, financial? I think pre-COVID, we used to be at a sustainable sort of 25% plus kind of margin, and we exited last year at about 15% on margin. I think, next year, same time, we are targeting that we want to be at that pre-COVID, margin levels. Okay. As I mentioned during my interviews as well, the accrued revenue for the year stands at INR 845 crore. My total operating expenses of INR 758 crore. In reality, they actually fetched me INR 945 crore for the year. While P&L revenue recognition will catch up with collections, I think in another three to four quarters that catch up should happen. Okay. Okay. Understood. Just one more on bookkeeping side, Abhishek. Tax rate since last three quarter has been relatively low. What is the reason for that? What would be the normalized tax rate going forward? That's it from my side, Abhishek. Thank you. On our operating income, we attract a complete 25.2% tax rate. There are one or two deductions that we get. Effectively, it should be around 24 and a half percent or so. Having said that, in a year, if operating income is on the lower side, those deductions result in a much lesser operating tax rate. For next year onwards, I think 24% to 25% should be the tax rate on operating income. Other income so far used to attract about 12% to 13% tax rate. As you know that taxation norms have changed from 31st, from 1st of April, so the treasury that is already invested, the gains that will get realized out of these investments should, on an average, get taxed at 12% to 13%. Assuming we are holding them for three years, wherein it will be taxed at 20% with indexation. Okay, Abhishek. Understood. Thank you so much. Good luck for next year. Thank you. Thank you. We have our next question from Swapnil Potdukhe from JM Financial. Please go ahead. Hello? Yes, sir. We can hear you. Yeah. Please go ahead. Yeah. A couple of questions. One on your headcount change. What we noticed that your sales headcount has come off quite decently on a sequential basis. Was that a particular effort that you took to save on cost or have you reached the, you know, the required number of people to ensure that you can continue to grow at a certain growth here on? What was the reason basically? Swapnil, on headcount, fourth quarter typically sees lesser hiring because primarily there is a chunk of hiring that we directly do for freshers from campuses, and those joinings are typically during the first quarter or so. Fourth quarter has relatively muted hiring. That is why you see that particular dip of around 250-300 employees in sales. That is just an aberration. This year, the increase in manpower was significantly higher, which has yielded this particular growth as well. Going forward, there will be hiring, but will be relatively calibrated. Will it be possible for you to quantify that, like, versus the current year maybe? Probably, I mean, it could be around, say, overall basis, 8% to 10% at best. Endeavor will be that whatever hiring that we have done in last two to three quarters, we get them to desired productivity levels and thereafter re-assess that what kind of hiring we need to do for growth in later half of fiscal 2024 and even fiscal 2025. Got it. Got it. Second question is on your sequential paid campaign additions. If I see your last five quarters, your number has come up in this quarter. If I were to just compare that with the numbers that you were adding. Is that to say that the easier part is done now and here on the paid campaign additions will come to a normalized rate which was in at the time of just before the start of COVID? Okay. See sequence, sequential trend in paid campaigns, I don't think so we should look at it in that much granularity that we were adding 18,000 and that has come to 16,300. Overall, on a broader picture, if you see for the year as a whole, this particular 30% revenue growth was split as about 17%, 18% growth via realizations and rest via paid campaigns. Fourth quarter has couple two, say, lesser working days compared to third quarter. Those things can play a bit of a role in terms of volume count. For next year and coming years, overall, we would look at growing our top line with, say, half of the growth materializing from addition of paid campaigns and the rest half via realizations. There is nothing to say that easy growth has already come in and now it's, it will be a previous sort of levels and so on. With the base of 76,000 additions in this year, will that be possible to achieve? Definitely. I would say that we are now at the levels where we were pre-COVID. Ideally, we this particular business should be at a much higher level. Even at from a top-down perspective, India has about 65 million small and medium businesses. Another 10-15 million could be freelancers. A universe of, say, 75-80 million businesses. Why should 1% of the population at least not be spending on digital advertising? 1% is a very conservative number, which comes to 800,000. That way, dearth is not about opportunity size, et cetera. The numbers that we have, this 538,000, et cetera, these are also, I mean, there can be very well growth on these particular numbers as well for coming several years. Got it. Just one last question, if I can also squeeze in. Any update on JD Xperts? Last time, I think you had mentioned that, the pilot was successfully conducted, and you were expecting a full-fledged launch, in the next quarter. Any update on that? JD Xperts, in terms of user experience, things are getting fine-tuned. now, for whatever bookings that we are accomplishing, the cancellation rates, which were about 35% to 36% two quarters ago, have come down to almost about 20% levels. 91% of the bookings are happening, are being fulfilled on time. The average rating that we get from users for services rendered is 4.7+. This way, user experience at least is quite well established. Going forward, we shall look to scale up transactions for JD Xperts during first half of fiscal 2024. Is JD Xperts by any chance supporting your realizations improvement? No. Report that in your— I— Yeah. At this point of time, there is no revenue contribution of JD Xperts that gets recognized as revenue in financials. Got it. Got it. Thanks a lot for those answers. Good. Thank you. Thank you. We have our next question from Darshil Jhaveri from Sapphire Capital. Please go ahead. Hello. Hi. Good evening. Am I audible? Yes, please go ahead. Yes, please go ahead. Yeah, thank you so much for taking my question, and congratulations on a great set of results. Sir, I would just like to ask, now I think we are back to our pre-COVID levels. Kind of, whatever our growth ambitions were, they would have been caught and delayed by two years. What trajectory do we see over the next two, three years? Will we be able to grow at this 30% to 40% growth rate? That was my first question, sir. Darshil, you are right. COVID did set us back by almost about two years. The good part is that this particular year, in a single year, we were able to grow several of our top-line parameters by 45% to 50%. Second, the exit run rate is much healthier versus where it was pre-COVID. As I mentioned in my opening remarks, we used to get about INR 20 crore to INR 21 crore from our ECS, monthly ECS customers way back in March 2020. I exited March 2023 at INR 45 crore. Basis that, overall fourth quarter collections were, say, about INR 268 crore, and pre-COVID run rate was about INR 235 crore. On that basis, we are already about 17% to 18% higher versus pre-COVID levels. Since we have been able to achieve such a strong growth in one particular year, we do think that we will be able to have sustainable growth in coming years. In quantifying the same, whether that will be, 20%, 30%, whatever, that we will have to see as we go along. Okay, sir. Okay, so we can't quantify it. With regards to margins, I think our target it could be to go back to our pre-COVID levels. Would that be a linear type of growth where we could, you know, see quarter-on-quarter improvement, or would it come after a jump when we hit a certain benchmark revenue level? The way revenue recognition works for us is that if I pick up a contract of, say, INR 24,000 from a customer, revenue recognition is on a daily basis for, say, 24,000 divided by 365. Most of my expenses, they tend to be front-ended, so if I have ramped up my hiring, most of my employee expenses hit my P&L in that very month, which is why this particular year, my reported margins are relatively on a lower side. As and when revenue recognition keeps improving in future quarters, margins should keep expanding. You could take you from last two to three quarters, the kind of sequential improvement we have been able to demonstrate. Similar sort of trend should continue in future quarters, assuming we are able to grow our sales in a similar fashion. Okay. Sir, if I may ask, sorry, one more question regarding top line. Sir, do we face any seasonality in our top line, or would we be able to see, you know, a kind of QoQ increase only? Typically, fourth quarter tends to be relatively stronger for us. First quarter slightly softer. Primarily reason being that historically, March month, which is the year-end month, has seen surge of customers who have signed up, and year-on-year their renewals keep coming in. Slight seasonality is there. Otherwise, there isn't much of a seasonality. Though at a specific category level there could be. For example, in first quarter or summer months, there could be customers for AC repairs kind of categories who could be signing up. In wedding season it could be related categories and so on. Since overall revenue base is very diversified across categories, there isn't much of a seasonality that way. Okay. I think that helps me a lot. Thank you, sir, and all the best. Thank you. Thank you. We have our next question from Darshit Vora from RoboCapital. Please go ahead. Yeah. Hello, am I audible? Yes, sir. Yeah. Good evening. My question is quite simple. I think I just need a basic, you know, ballpark, view of, revenue and margin guidance going in FY 2024 and 2025. Darshit, in terms of explicit guidance, we do not issue a particular guidance. I think some of our parameters should be able to give some cues on where things could be headed. For example, as I mentioned, against INR 845 crore of revenue, we had about INR 945 crore of collections. The realizable value, which is the amount of money that I expect to receive in next one year from sign-ups that I have done in last year, that stood at broadly about INR 1,000 crore also. My deferred revenue stood at INR 438 crore, and that has been growing at 30% year-on-year. Basis this there could be, I mean, there should be healthy revenue growth next year. As far as margins are concerned, they should see sequential improvement and the target would be to exit next year or even earlier at about pre-COVID margin levels. In case there is scope for additional margins, we would take a call whether we would want to deploy those incremental margins towards advertising to grow the user base, which would aid monetization in future years. Okay. All right. Thanks so much. Thank you. Thank you. We have our next question from Vijit Jain from Citi. Please go ahead. Mr. Vijit Jain? Please accept the prompt on your screen and unmute your microphone. Since there is no response, we'll move on to the next question from Vivekanand Subbaraman from Ambit. Please go ahead. Hey, thank you so much for the follow-up opportunity. Abhishek, could you talk a little bit about the INR 30 crore intangible assets under development money that was spent in fiscal 2023? Could you give us some color on how much got spent in expert shopping and other discretionary projects, and how to think about this number getting operationalized in the P&L? Vivek, we had about INR 30 crore spent towards these particular newer initiatives. This particular development happens in a phase-wise manner. Most of these particular developments for the first phase are coming to a end. I think sometime during next or subsequent quarter they should start getting capitalized. Basically they should move from intangible assets under development to capitalized assets. Thereafter they would get depreciated over the useful life of these platforms, which could be broadly around two and a half to three years. Great. This is helpful. Thanks a lot. Thank you. Thank you. We have our next question from Ruchi Mukhija from Elara Capital. Please go ahead. Thank you. Hope I'm audible. Yes, you are. Please go ahead. Yeah. Hey, Abhishek, since you last spoke to this forum, has there been any strategic discussion on the use of cash? Ruchi, right now the INR 4,050 crore treasury is deployed in safe instruments. They yield about 7.2%. There is no explicit thought process right now on utilization or dispersal of this particular cash. The idea is that, the macro environment remains uncertain. We operate in a very disruptive sector, so to say, so there could be opportunities in future either on the organic side, for example, some of our newer initiatives, they might require part of the cash, though our core business itself throws sufficient, free cash flows. The way environment is panning out, there could be some inorganic opportunities as well. Having said that, there are no incremental discussions, over last, say, quarter regarding this particular usage of cash. Got it. Secondly, we used to see a typical seasonality for your advertisement spend, which used to fall, more in the Q1 or June quarter. Do we expect similar to happen this year? Have you started some new advertising plans for this quarter? Advertising spends in the past, it has seen seasonality whenever we have done typically TV advertising, because that tends to be lumpy in nature. Last year, bulk of the advertising was digital in nature, so that was quite smoothened out. For next year, we could, we think INR 35 crore to INR 40 crore we are earmarking for digital and related initiatives. In case we assess that we need to spend more either for new initiatives or otherwise for the core business, we will assess at that point of time. As of now, I would not build in any particular seasonality for advertising spend. Got it. The last bit, Abhishek, we know that, I mean, Justdial has started integration process with ONDC. Does that have any overlap with some of the new initiatives that Justdial is pursuing? With ONDC, the integration, et cetera, is in relatively initial stages itself. We do understand that ONDC as a architecture is still getting finalized. Some particular partners have come in on board as buyer apps, and some have come in as seller apps. Our core strength historically has been service-oriented categories, so we would see how this particular thing pans out and what role we can play, either as a seller-side app, wherein we can onboard vendors whose digital catalogs we could create such that those vendors could sell online via any of the buyer-side apps that are out there. It should not conflict, so to say, with any of our existing initiatives. Okay. let me add more details around this. As you said, you have strength around the service category. Do you see ONDC having some kind of play in JD Xperts, at least at the conceptual level? My understanding, my limited understanding is that ONDC plays a role more on the product side, wherein if you are selling a particular product, you have a flexibility to sell via any particular consumer app, front-end app, and you also have the flexibility to choose any logistics partner for fulfillment of those. On the services side, I don't think so at this point of time ONDC shall play that significant role. Thank you, Abhishek. All the best. Thank you so much. Thank you. Ladies and gentlemen, in order to ensure the management is able to answer queries from all participants, kindly restrict your questions to two at a time. Kindly join back the queue for follow-up questions. We have our next question from Lavanya Tottala from UBS. Please go ahead. Hi. Hope I'm audible. Thanks for the opportunity. Yes. Hi, Abhishek. Most of my questions are answered. I just wanted to understand your view about the incremental paid campaigns increase given the macro environment, which is making it a bit difficult for SMEs. How do you see the incremental increase in next year, FY 2025 specifically? Lavanya, while you rightly pointed out the macro remains challenging, the good part for our particular business is that post-COVID, most SMEs have a realization that if they have even INR 10,000 to spend for advertising, they should ideally spend on some digital initiative rather than any traditional media or so. Our particular subscriptions are quite affordable at just average ticket size of INR 18,000 per annum. To that extent, so far, we have been able to grow our campaigns in last three to six months as well when these macro challenges have been unfolding. We'll see how things proceed, at this point of time I think, we are fairly confident that we should be able to manage... still manage this macro and be able to grow both our campaigns as well as realizations for next year's growth. Okay. I mean, just wanted to make my understanding clear. Even the exit rate in the month of March and April, more or less, the situations are not that bad as one would assume, right? March historically has been a seasonally strong month for us, and this year was quite strong, like it used to be pre-COVID. April, it is still very early days, first two weeks itself, and in our business, it's not possible to ascertain just on weekly trends whether there is softness or not. So far, I do not see those concerns. I just have missed this part. In B2B contribution is 26% and within that, JD Mart, what will be the proportion of JD Mart? When we refer to JD Mart, we are essentially referring to the B2B side of the business. 26% of our overall revenue came from SMEs who deal in B2B related categories. Y eah. out of that, how much is through Justdial and, what will be the share of JD Mart, the direct hit? There is no segregation that happens. When a particular ball bearing manufacturer signs up with us, that particular amount results in services being rendered across my all platforms, be it JD, be it JD Mart, be it the mobile platform, desktop platform, voice platform. There is no platform-wise segregation of that revenue. Okay. Okay, got it. Okay, got it. On the ad spend that you have mentioned, INR 35 crore, that's for the full year which you have earmarked or— Yes, for the full year, fiscal 2024. It's the overall ad spend, not just— This INR 35, 40 crore we have earmarked primarily for the core business itself. For other initiatives, that will have to be looked at separately. That you are planning anytime soon in the next coming one, two quarters for JD Mart or JD Xperts specific advertising in coming few quarters? As and when we have, more clarity on the same, we shall share. Immediately, I think in next or the ongoing quarter, there is unlikely to be a meaningful spend on the same. Got it. Got it. Thank you. Thank you so much. Thank you. We have our next question from Abhishek Banerjee, from ICICI Securities. Please go ahead. Hi, Abhishek. Thanks for the opportunity. Obviously great set of numbers. Just wanted some clarity on your plans for JD Mart going ahead. You gave some details on how the transaction level KPIs are panned out for JD Xperts. Can you give something similar for the transactions that are happening on JD Mart? Abhishek, JD Mart is also a paid subscription basis model. The key difference versus the core Justdial platform is that JD Mart is focused towards B2B, and search for JD Mart originates primarily as a product-based search. Earlier on Justdial, you would search for, say, a coffee machine manufacturer, but in case of JD Mart, you would specifically search for coffee machines. You will get various products out there, and from there you navigate to the specific merchant and then get in touch with that particular vendor. In essence, both are primarily lead generation models because in B2B many of the user requirements are customized in nature. Buyer and seller need to agree on delivery terms, payment terms, quality of the product associated, et cetera, et cetera. To that extent, the key difference, as I said, it is about products being brought in, and those products have been brought in on JD also in those B2B listings, and there is a dedicated platform, JD Mart, as well. In terms of numbers, we have 6.5 million-7 million businesses which qualify for these B2B categories. Out of those, for about 1 million listings, we have catalogs on our platform. Those catalogs are being enriched on a day-to-day basis. B2B categories currently contribute about 10% to our overall traffic that we get in any quarter. Understood. So you will not be getting into the ordering and fulfillment part of the value chain with JD Mart? The ordering and fulfillment part in case of B2B primarily happens for bulk purchase of, say, branded goods itself. You need. Yeah. 10,000 pieces of a 100 ml Dettol hand sanitizer. Yes, those particular transactions can take place, but that again is a low margin, e-commerce business. For us, the low-hanging fruit is to grow our revenues from the subscription business on the core B2B side, wherein we are able to get quality buyers for sellers listed on the platform. Got it. Then JD Shopping is going to, get even more de-focused from now on? Again, in JD Shopping, as we briefly discussed last quarter as well, the key thing that we are evaluating is the kind of unit economics that can be there. We did certain pilots, but clearly, if we are making 7% to 8% margin. The ecosystem is such that there is no way we can even break even on those particular orders in near future or maybe in couple of years. The approach that we intend to take is slightly different, use JD Shopping also as a lead gen vehicle, wherein we bring in our concept of, say, reverse auction, where if a user is willing to buy a Samsung mobile phone, the user is able to get quotes via our platform from local vendors. In case a user likes a particular quote, they could use our particular payment solution to make online payment also to that vendor. We pass on that particular order to that particular merchant. The merchant can either do the delivery on its own or they can even avail third-party logistics which are integrated with our platform. The difference in this approach versus a conventional e-commerce or inventory-led model is that in this particular case, the fulfillment is primarily being handled by the merchant. We believe that this particular model will be much better in terms of unit economics. That is how we are looking at this at this point of time. Yeah. Understandable. At the same time, that would also mean you would have limited control on quality. You are right. See, one approach could be that, okay, if you want to have absolute control on quality, that would require significant amount of investments. Not just that, we have seen that user behavior in India is not that loyal. Even if I were to give a great user experience, I need to be very competitive or lower in terms of pricing as well, which could consume a huge amount of cash. Since our strength historically has been services, within services versus products, I would try to scale up on services bit first and then possibly see how to play the product side. Understood. Understood. Just one last question on, you know, spends on JD Xperts. You mentioned that now you are almost ready to ramp up JD Xperts. Any indication on the timing and exactly what. Would it mean that you are going to do a lot of advertising or does it still require more operational, you know, pieces to be put in place before you can really ramp it up to a pan-India level? There are two parts to it. One is the platform becoming commercially live. That should happen over the next three to four months. The second part is ramping up transactions for that particular vertical. Now, we are also conscious of the fact that from the same set of categories, we are even today earning a decent subscription revenue as well. While there would be a bit of cannibalization as we ramp up those particular transactions, so we will assess that at what point of time we want to deploy advertising money to ramp up those transactions. That we'll communicate as and when we crystallize our advertising plans for the same. In terms of platform becoming commercially live with the majority features, that should happen in another one quarter or so. Understood. Thank you, thank you, Abhishek. This is very helpful. Thank you. Thank you. We have our next question from Raghav Behani from Citi. Please go ahead. Mr. Raghav Behani? Okay. Hi. Am I audible? Yes. Yeah. last three years, based on B2B going from 20% of revenues to 26%, it implies B2C is down 20% over FY 2020 to 2023. Given you have also taken some price hikes of 10% during this period, paid campaigns must be further down. That's my first question. You mean paid campaigns on B2C side? Yes. Paid campaigns on B2C side, out of the 538,000, yes, B2B side would be big down versus pre-COVID levels. That would have been offset partly by B2B campaigns. Having said that, B2B, the contribution is more from the realization side rather than the campaign side, because historically, our B2B realizations were very close to B2C. Whereas the thought process was that once we have a dedicated platform in place, we should be able to monetize much better on the B2B side from the same customer. Okay. Also one follow-up question. In the balance sheet, I see that the other current liabilities is up INR 100 crore year-on-year. Any reason behind this sharp increase? The deferred revenue, which increased by INR 100 crore, we collected INR 945 crore and we consumed INR 845 crore as revenue. That incremental INR 100 crore is what sits as deferred revenue on the balance sheet. Okay. Yeah, sure. That answers my questions. Thank you. We have our next question from Rupesh Tatya from Intelsense Capital. Please go ahead. Hello, sir. Can you hear me? Yes, please go ahead. Yeah. My— most of my questions have been answered. My first question is, what is the number of paying subscribers on JD Mart? Number of paying subscribers on JD Mart should broadly be, I think, in the range of about 120,000 or so, though I don't have the exact figures. I think about 20% to 22% of the overall paid subscribers would be for B2B-related categories. Okay. Okay. This number I had for Q1, which was around INR 1 lakh, so now you are saying INR 1.2 lakhs. Broadly, anywhere between INR 110K to INR 120K or so. Okay. Then my second question, sir, is this. I mean, JD Xperts, what is kinda like revenue of the, let's say, largest player in the industry and what kind of revenue, you know, and you expect to do in, let's say, 2024 and then 2025? The biggest vertical player in this particular segment, as I know, they do anywhere about, I think INR 350 to INR 400 crore, though there is a overseas contribution also they have. I think more importantly, they also spend INR 800 to INR 900 crore to get that revenue. This is the kind of mismatch that exists in the ecosystem right now, and which we keep grappling with that the pricing for most of these services are at a very healthy levels. For example, a haircut is at INR 299. I don't think there is scope to increase prices. The top segment of population which wants to avail these services, a good chunk of them are already using these services. In light of that, we have to see that while revenue is one part of it, how much do we spend to get that revenue? We are very clear that while we want to do investments, but just putting money something after something which is clearly negative unit economics, that is not prudent in the long term, which is what the entire ecosystem also, I think, is realizing over the last 12-15 months. Okay. Okay. Understood. Thank you. Thank you, sir. Thank you. Thank you. We have our next question from Sarang Sanil from RW Investment Advisors. Please go ahead. Hello, sir. Am I audible? Sir, your volume is a little low. Hello, am I audible? Yes, sir. Please go ahead. Now? Okay. Hi, good evening. I would like to know what's the gap between this deferred revenue growth and revenue growth on a sequential basis, right? Deferred revenue grew about 9%, while the revenue grew about 5%, while we are also moving towards, you know, higher monthly packages. Is there any accounting policy that's, you know, driving this or something else that I should know of? No. Last particular quarter, we collected INR 268 crore from our customers, and we rendered services amounting to INR 232.5 crore. Deferred revenue is nothing but increase in collections less the amount consumed. That is what resulted in that INR 35 to INR 40 crore increase in deferred revenue. There is no accounting policy change. It's straightforward. Whatever money that comes in, that sits in deferred revenue, and whatever is existing deferred revenue, part of it gets recognized as revenue in coming quarters. Okay. It's not because, you know, we are moving to more multi-monthly plans, right? Whether I sell a subscription as INR 2,000 a month or I upfront collect INR 24,000 for the year, the revenue accrual remains the same. It will be on a INR 24,000 divided by 365 basis. Revenue is basically what is the worth of each day service that I'm providing to a customer. Whether I collect it monthly or I collect it upfront, that does not impact revenue recognition. On the deferred revenue side. Yeah, it will impact on the deferred revenue side because, in upfront, mode, that adds to deferred revenue. Now the monthly ECS has become so healthy that despite selling two-thirds of our subscriptions on monthly plans, still we were able to have INR 268 crore of collections for the quarter. Sure. Sure, sure. Sir, another question. You were citing about JD Shopping that the unit economics is not working. Also, what is our plan with the new JD Home while other players in this space are just burning a lot of cash and we are entering right now? What is the plan right there? In JD Homes or JD Real Estate, the key thought process is that in erstwhile ecosystem, our user was coming to our platform and searching for estate agents or property dealers. Now, as a user, I want to be able to search for properties as well. If I want to search for a two-bedroom apartment in Malad West, I should be able to see those two-bedroom apartments and then navigate to the vendor. This philosophy is similar to what we have adopted in B2B as well, that you first search for a product and then navigate to the seller of that particular product. The idea is simply to give a better user experience where user sees what is their requirement and then gets connected to the seller instead of connecting with four or five sellers and then figuring out that these four are not suitable for me and this one suits my requirement. Right. The competitive space is intense, right? Yes, the competitive space is intense, but for me, the way I look at it is that if I am earning INR 20 crore from this vertical, can I make an attempt to make INR 40, INR 50 crore from this particular vertical? From that perspective, that profitable revenue from that vertical, we do think that will materialize with these particular product changes that we have done. Sure. In order to gain more market share, we won't be burning a lot of cash, right? Just for the sake of getting more market share there, right? We haven't done it for past so many years, I think. Right. One can assume that that will not be the philosophy going forward as well. Sure. A couple of more questions. Any expected campaign addition for next year? Last quarter when we came in, when it hit 18,000 mark, the commentary was that, you know, it was a festive quarter and, you know, that's why the muted paid campaign addition. This quarter we see 16,000, right? Any expected paid campaign addition for next year? Could we do 20,000 per quarter? Okay, let me put it this way. See, the total active paid campaigns are 5,38,000. 1% of 5,38,000 itself is, say 5,300 campaigns. Falling short or being excess by 2,000 or 3,000 campaigns doesn't really matter much in the broader scheme of things. What exactly matters is that, okay, for fiscal 2024, overall how much revenue growth will we be able to get and what will that be distributed across campaigns and ticket size. It can be very easy to possibly not take price increases or even slightly reduce prices, and that 20,000 can be even 25,000. Right. Whether it will result into overall collections revenue growth or not, that is what is the key question. Right. Yes, sir. Understood. The next question on JD Pay. Any transaction details that you can provide with, how much of the total transactions go through JD Pay? JD Pay is in very nascent stages. We are in the process of enabling UPI transactions, et cetera. At this point of time, I think it wouldn't be meaningful to discuss quantum of transactions on that. Got it, sir. The final question is on the productivity of sales force. When we see pre-COVID, you know, campaigns per employee was much higher to what it is right now or what it has been for the last four, five quarters. Any target that you would, you know, have going forward? The way we look at this particular metric is overall cost of sales. Our cost of sales pre-COVID used to be at about 40 odd% or so. That currently stands at about 46% to 47% or so. There is a significant amount of hiring that has happened. Endeavor this particular year would be to bring this particular cost of sales back to 40% to 42% kind of levels. Got it. Okay. Okay. Understood, sir. Thank you and all the best. Thank you. Thank you. We have our next question from Mohit Motwani from Nuvama. Please go ahead. Hello. Hi, Abhishek. Thanks for the opportunity. Just one question from my end. You know, you spoke about increasing the productivity of the hired sales force recently that you have hired in last few quarters, right? And you did about INR 260 crore in collections. Just wanted to get your thoughts on, you know, if they improve the productivity, what kind of pre-collections do you expect from the current sales force that you have? Meaning that they would be able to contribute to the growth in addition to the new sales force that you'll hire in the coming quarters. Just wanted to get a sense on that. Thank you. When we talk about productivity, we essentially mean that, okay, the same sales person, if they were getting me INR 100 thousand, how much extra money that I can get. Whether that extra money is coming via additional campaigns or via ticket size increases, that is a relatively secondary factor. INR 945 crore we did for the full year. The sales headcount is, I think, higher versus pre-COVID levels by probably 1,000, 1,500 or so. The idea would be can we get another 10% sort of revenue with productivity improvement in the existing sales force itself. Thereafter, whatever is the additional growth that we want to do for the year and coming years, part of it will require additional manpower. Got it. Thank you so much. Have a good day. Thank you. Thank you. We'll take a last question from a connection as HSSA Self. Please go ahead with your question. Hello. Hi. Can you hear me? Yes. I just have one quick question. What is the realizable value for quarter four? You gave it for the year, but I don't know for the quarter four itself. It should get about, INR 270 crore to INR 280 crore. Okay. You know, obviously you had mentioned last quarter was 265, as I understand, and you said it was a relatively weaker quarter. Do you feel that these realizable value, given your current manpower, has it flattened or do you expect this to further grow quarter-on-quarter towards like whatever benchmark of the next 10% or 20% that you, that you have? Or is this now you feel it's flattened given this employee base? The realizable value, let us understand, it's an estimate that I do bases my historical trends to assess that, what is the money that I expect to receive over next one year. That estimate obviously keeps getting revised every particular quarter. Last quarter did have a sequential improvement, and there is scope for these particular realizations to further improve as and when the existing sales force becomes more tenured in the system. Okay. An absolute final question for me. Thank you for that. The employee cost this year was around 65 crore. Do you believe that next year, would it be wise to say 72 crore would be what you would be looking at? Would it be a fair number for me to take? You are considering it on a monthly basis? Or how you are taking it? I'm sorry, annually. Annually. Annual was about INR 650 crore. Sure. Yeah, sorry about that. INR 650, yeah. Would that be INR 720? Would that be a fair number to take? I think, yeah, 10% to 12% increase on overall employee expenses could be the case. Okay. Thank you. That's all from my side. Thank you. Thank you. I would now like to hand the conference over to Mr. Abhishek Bansal for closing comments. Over to you, sir. Thank you everyone for joining us. In case you have any further queries, please do reach out. We will do our best to address and that's it from our side. Thank you. On behalf of Just Dial Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.