Ladies and gentlemen, good afternoon and welcome to Shiprocket's Q2 FY27 earnings conference call. As a reminder, all participant lines will remain in listen-only mode, and there will be an opportunity for you to ask questions after the management's opening remarks. For participants connected on only audio, If you need any assistance during the conference call, please signal the operator by pressing star followed by 0 on your touchtone keypad. We have with us today Mr. Saahil Goel, MD and CEO, Mr. Tanmay Kumar, CFO, and Mrs. Shreyans Jain, Director, Investor Relations. I now hand the call over to Mr. Tanmay Kumar for his opening remarks. Thank you and over to you, sir. Good evening and, uh, welcome to the call, our second as a listed company. Revenue is up 35%. Adjusted EBITDA is up close to 14 crores. Our emerging businesses grew 60% plus. With much better economics, and we have turned PAT positive. I will walk you through a short earnings presentation, and post that, we can, uh, we can have our conversation and question answers. Shiprocket remains focused on its purpose. 300 to 320 million Indians shop online today. Online is about 8% of retail. Spreading to about 15% by 2020. India has about 60 million retail and SMEs, and about 45% of online retail GMV already comes from T2 and beyond. Our view on the market remains unchanged. We are very bullish on D2C and on quick commerce now. The merchants driving this growth will not build their own logistics, their own checkout, their own marketing stack. They will rent it, they will use it from the people who build it, and that is what we serve, and that is what we provide. Shiprocket is arranged under Indian e-commerce. We are technology and technology first. A seller in Jaipur or Coimbatore opens one dashboard. And gets everything that happens after discovery, uh, payments, fulfillment, shipping, customer experience, returns, and so on. 42+ courier partners, 250 ecosystem partners, one dashboard. Thank you. Now, this quarter, our Data, money, trust flows through one platform. Our merchants do not need to understand logistics. She just needs to make a great product and हम बाकी सब संभाल लेते हैं। So that is what we are. Let me walk you through key financial numbers. Overall revenue was ₹670 crores plus, up 35%, and adjusted EBITDA was ₹14 crores plus at 2.1% margin. Core revenue was about ₹460 crores, up 25%, and adjusted EBITDA About 59 crores at 12.8% margin. margin. Segment, our revenue was about ₹210 crores, up 61%, and its adjusted EBITDA margin improved from minus 31.5% to close to 21% negative. Uh, so there is a 10 basis points improvement. Growth is broad-based, uh, core is scaling profitably and emerging continues to scale faster, and we generated about ₹55 crores of cash from operations in first half. That's about 2.3 times the ₹23 odd crores that we made in H1 of last year. Uh, so overall both engines are performing and growing and with better economics. Uh, we'll walk you through quarterly growth metrics. On trailing 12-month basis, we are at our highest ever on all the 3— 233 million transactions, about ₹37,400 crore of GMV and close to 2,36,000+ active merchants. All metrics have grown. In the quarter, GMV grew 33%. Transactions grew 34%. If you ask which operating number shows we are delivering ahead of what we set out in the beginning of the year, We are excited about overall 35-34% plus transaction growth. Uh, we are reaching more merchants, we are getting deeper into transactions. And that is exciting. Uh, revenue grew 35%, and the build is simple. I mean, we keep adding merchants, which was up about 8%, and merchants do more business with us. And revenue per merchant is up 25%. The RP is up with more and more emerging adoption while we continue to drive overall merchant count. So adjusted EBITDA up 3.3x obviously from a very small base. It was 4 crore last year same time and it is now 14.2 crore. And more importantly We are now cash positive. Uh, we are near breakeven, and this is delivered largely due to operating leverage from platform scale. We'll talk about it, uh, subsequently. So growth is volume-led, broad-based, and it's not price-led. You have to, uh, you know, put that point across. Overall contribution was 130 crores, up 43% against the revenue which grew 35%. So profitability has been improving overall for the platform. We continue to— on a unit economics perspective, we continue to grow profitably. The sequential growth in revenues for overall business was 7% in Q1 over Q4, and now it is 14%. Q2 over Q1. Margin. Is at 19.3%, up 11 basis points. The interesting fact here is that every incremental rupee of revenue this year came with about 22% contribution margin. That is how you see the growth in margin. So sequentially, we held contribution margin even if emerging became much bigger share of the mix. So contribution margin is growing faster than revenue. And that you can see overall operating leverage in the first line of the P&L. Adjusted EBITDA was at the 14.2 crore, margin at 2.1% against 0.9% a year ago and 1.5% last quarter. So it's improved both years. On average, on year-on-year and sequentially, and in both core and emerging. Adjusted EBITDA excludes other income entirely. So this improvement is all operating. PAT at, you know, 60 million against the loss of 20, uh, crore a year ago is about 21 crores. So here's the PAT walk, uh, the 21 crore swing I would break into 3 parts, about 10 crores coming from higher adjusted EBITDA, which is half set. About 5 crore coming from lower ESOP costs. And about 5.5 crore from higher other income from higher IPO funds. Everything else led to about 4 million. So the ESOP charge now keeps falling as a share of revenue. It's under 4% from 6% a year ago. So 3/4 of the PAT improvement is operating, and yes, there is higher other income due to stronger balance sheet post-IPO, and we have an effect of only half a quarter of, uh, the stronger balance sheet post-IPO in the numbers for Q2. Just a recap on the 3 segments. Core is the shipping, it drives profits. In emerging, we have checkout and martech and omnichannel, the compound growth. This quarter, core was about 69% of revenue and emerging was about 31%, up from 26% a year ago. So core generates the profit, we deliberately reinvest part of it in emerging. That's the reinvestment choice we've been exercising. Core brings the merchant and the transaction. And emerging monetizes more of that relationship. Now this is critical as the peak of this company 5 years ahead or 10 years ahead. This is how we intend to continue building a compounding business. The core transactions were up 31%, that's volume growth in core. Revenue about 460 crores. Which was up 25% like I mentioned before. The gap is market and mix. So the courier fees that we pass that through, And larger merchants are doing more. That's the second. And thirdly, there are new categories like hyperlocal which carry a little lower Revenue per transaction. We have been trying new ways, uh, hypermarket, supermarket, food, all of that we're starting. It's very early. new categories in the past year, but for some time we've been focusing on sweets, uh, same-day delivery, fast delivery partners we've been ramping up. So all of that I think we will see finishing of that and we will see more and more, um, you know, uh, growth coming through. of about ₹97 crore, up 25%, which is steady at 21.1%. So we are Uh, investing a bit in CAC, frankly, as I've been saying from before, so long as our CAC pays back in less than 1 year, it's a beneficial investment to do. And we are focusing on ramping up the overall merchant base. Now the contribution margin We've also been investing in experience centers in core. So all of that, uh, we held, uh, the percentage, uh, and, and focusing on growth. Adjusted EBITDA of about Uh, ₹59 crore, up 29%. That's faster than both revenue and contribution margin growth. Both margins at 12.8% against 12.4%, and then you can see operating leverage coming in. So, Kunal. Doing well at improving margin and it is self-funding the emerging well. We do not own a fleet, and that is the point here. Uh, we are carrier neutral. Every order goes to the network's best placed to deliver a transaction. So AI picks the partner order by order, learning cost, speed, and performance at a pin code lane-level, uh, RTO prediction and address intelligence. those PTO orders before they get shipped. So no single network dependence, and we know things about stretched networks, um, and that is why we went for this long version. So, uh, that is the point here. And then, you know, we are expanding in hyperlocal. So demand for fast delivery is now everywhere. Hyperlocal is a natural extension of the same platform. with, uh, 2 new use cases, um, like I briefly mentioned, uh, retail stores and restaurants and so on. So multiple well-known brands have started using it, and also restaurants. AI is playing a role. Uh, you know, I talked to Radar, I talked to Analytics. Um, which rather optimizes the courier selection and provides stretch rates and analytics. Essentially, the idea is for— to continue providing better access for the merchant. And choosing the right network for every order, they have a value. Radar is our AI-powered control tower. So it continuously analyzes network data to find safe lanes and zones by courier. before they can affect the performance for the merchant. So an example, let's say from some city, let's say Chandni Chowk in Mumbai, which has 79 pin codes. Let's say of 20-30 are assessed, uh, by end of same percent of you are moving through them. Because what happens in this case is that Radar picks them up and them, uh, tries to courier by courier. So sellers use it in 3 ways. A dashboard showing which lane and pin codes are swept. They use it for auto-block, so orders are not assigned to a stressed courier. And a real-time radar appears when they choose a courier in the ShipNow screen. So Radar also feeds the analytics agent, uh, on the— you know, I'll talk to you in the next slide— very surface-level exceptions that sellers should act on, right? So this is a network data you know, that merchant should get, and we give it to them. We moved the Shiprocket platform to an agentic experience, uh, with an AI embedded across sellers' daily workflow. We have launched it in beta. To about 1,000-odd users. So an analytics agent sits alongside the dashboard. The seller asks in chat and it drills into the numbers and it analytics screen, and instead of seller doing the analytics by hand, uh, they get the insight. Idea is that we give the power in the hands of the merchant on what's happening. Omni-channel grew 79% year on year this quarter on fairly healthy merchant additions. So as brands go omnichannel, The hardest problem is staying in stock on quick commerce, right? So we replenish dark stores through appointment-based delivery, uh, you know, booking slots from the branch warehouse, match the POs with the loads on time, and we give them real-time PO visibility. Smaller brands do have a challenge. We talked about it last time. They're scaling very well. Close to half of, uh, omnichannel now getting driven through this. And, uh, as you know, quick commerce is going very well. So, uh, our— this business will more and more get indexed to quick commerce as it continues to grow fast. And several well-known brands, you know, move it today. So we move largely brand stock to dark stores. Fulfillment center, uh, on time so that consumer gets it faster. So that's the whole idea here. Um, Martech is now rebranded as Fastest. It grew 102% year on year and powers about ₹1.3 billion of annualized GMV, about— that's about ₹11,200 crore. So let me link ads which help merchants advertise and check out, uh, that converts shoppers. What is interesting is that we are finding that Uh, the decision maker is the same within the organization, and this means more and more bundled selling or cross-selling opportunity between the 3, which means you should see effectively the take rate within Martech growing over time. Uh, our guide to them here is the data WhatsApp ads, real delivered addresses, consumer personas, and we see the journey from click to delivery so we can show merchants better ROAS. and real conversion uplift, and as one unified shop. So, uh, the upside is that fewer than 10% of our merchants use Martech products today. So it's a, it's a cross-sell opportunity, and increasingly it's also becoming an acquisition in its own right. So every, um, Martech product runs on data from its own delivery, and that's why it converts better and continues to grow really well. So yeah, financials on the emerging segment. The emerging revenue was about ₹2.10 crores. It was up 61% and 18% sequentially. The ₹32 crore we added this quarter is largest sequential addition in the last 6 quarters. So Martech up 102%, Omnichannel up 79%, Cross Border too is up 9%. We continue to invest in product, brand, and capability, and we keep adding merchants across Smartech and Omni Channel. Um, contribution margin about ₹33 crore, 1.5 times a year, uh, versus a year ago. Margin is 15.2% against 10% in every sub-vertical. So you can see it is in the, in a similar range. Because Omni-channel is a growing share. And it is investing in a virtualized network now that keeps the margin slightly lower in the short-term, but this can really be a very big, big advantage. Adjusted EBITDA margin improved by more than 10 percentage points to -21% from -31% in last quarter to this quarter. Also is a 3 percentage point improvement just in one quarter. That's the first one. Next number is also interesting. Um, so we are scaling, emerging, and improving its economics at the same time. 9.3% of core merchants now use emerging products, up, uh, 140 basis points year on year. Uh, merchants served through emerging views, 75%. to 63,000+ as merchants adopt omnichannel, martech, and cross-border. And the funnel now runs both ways. About 17,300 new merchants joined us through emerging this quarter against 5,400 a year ago. So the other interesting fact which is not here is that martech has close to 20,000 merchants, uh, checkout was engaged. What is our overall base of 2,26,000, and that tells you the opportunity. As you know, discovery is moving from Google to AI assistants. So now there is no second page, so that makes AI visibility the new SEO. Um, Atlas tracks how brands across, across appear across ChatGPT, Gemini, Claude, Perplexity, and Google's AI Answers, etc., and it finds the gaps and helps fix them. So how it runs is you go to the dashboard, then run the brand scan live against the competitor or a similar product, then walk through the prompts and gaps, uh, that it throws. It throws out where you are mentioned, where others are mentioned, where you're not. The system gives you an AI visibility score, a mention rate, a share of voice, and a citation rate. The prompt gaps and the questions where the brand does not show up at all. And the citations, which, which site is the AI quoting, and then it gives you a way to fix. So there is a tool we call Hydra, uh, our built-in AI writer. It creates content to fill in the gaps through a setup, ready-to-run agent. So that's with Correct. Now This one is, uh, you know, you know, prompt-driven retargeting essentially. So the average B2C website converts 1-2% of visitors. Now recovering a random task can, you know, can convert 5-10% of them, but building those journeys is very hard. So now, you know, We made it easy. It's an existing product, but, uh, what's become easier is that now a merchant just describes the journey in a chat, for example, uh, and it cover abandoned carts, um, and, and, and, you know, uh, drive repeat. So the journey is created through, uh, the chat commands and then It runs it through, you know, client's phone or across WhatsApp or email or SMS push. We've also done on the checkout, we've also, you know, this is a feature addition where the merchant can share payment link. A shopper can send the payment to a family or a friend. So daughter can shop and her parent can pay, and, you know, the order can complete still on our phone. Uh, it helps younger buyers and less tech-savvy users and so on. So Similarly, there is discounts added, so, you know, the best price Uh, is now, you know, we integrate now the product page, not just over checkout. So we just lift add to cart and buy now. So overall, you know, this is a summary of the numbers. Core about ₹39 crore at adjusted EBITDA. Emerging at negative 44 crores, group, uh, EBITDA of 40-odd crores. Cost between contribution margin, adjusted EBITDA fell as a percentage of revenue in both segments. Um, like I mentioned before, please note that the IPO happened towards the 3rd week of August, so, uh, you know, the finance cost reduction YouTube download. payment of the loan as well as the increased other income reflect impact of half a quarter over here. So we— there would be again, sir, Next, next, I mean, sir, negative 20 crores we delivered near breakeven, uh, this this quarter, and for the overall Uh, first half now, our revenue is up 34%, uh, core is up 24%, and emerging is up 65%. That is the broader picture. Um, the economics continue to improve, and so these numbers give us the confidence that we are largely on track to deliver on the vision and the roadmap that we, we had on the, on the medium term. So that is— we are very, very excited and Um, I'll hand back for question answers now. Uh, on how great thing the business is growing. So that is all I have to share over here in terms of overall, uh, numbers. I'll Thank you very much, sir. We will now open the floor for the Q&A session. To ask a question, participants connected on audio call may press star followed by 1 on their touchtone keypad. If you wish to withdraw yourself from the question queue, you may press star followed by 2. Participants connected on webinar may click on a raise hand option. We request participants to keep their questions brief to allow us to accommodate as many participants as possible. We will wait for a moment while the question queue assembles. The first question is from Sachin Salgaonkar. Kindly introduce yourself and proceed with the questions. Hi, thank you for the opportunity. This is Sachin Salgaonkar from BofA Securities. I have 2 questions. First question regarding margins for core business. We did see contribution margin largely constant at 21.1% for last 4 quarters and EBITDA margin also almost in the same range. And then I do understand your point that, you know, you guys are investing So CAC is a bit high. The question out here is, you know, are these steady-state margins? When should we start seeing improvement in margins? And, you know, how to think about where margins stabilize? And let me actually go through the second question also right now. We read in media about your strategy on food delivery. I was trying to understand if you could elaborate what are you guys trying to do on a food delivery front. That would be helpful. Thank you. Thank you, Sachin. This is Saahil. Thank you for both the questions. See, on the core side, you are right that, you know, it's, you know, there is investment again in AI for experience as well as in acquiring more customers at large. And obviously the realities of the business keep kind of evolving and we want to do the right things in the long run for the business. That being said, the margins are obviously slightly improving in the shorter term, but in the longer run, I do see them improving because it's the nature of the way the team is constructed. Uh, essentially the design of the business has fixed people more or less who are working towards selling, acquiring, servicing, building, engineering, and so on. And then we've got growth in customers as well as in R2, which leads to higher margins downstream. So I think that rhythm has not changed or is not going to change. So in the longer run, automatically, you know, the margins should improve. Um, on the, on the second question, sorry, on, on food. So basically we've, we've been— see, we stand for allowing anybody who runs their business to be able to go and reach their customers directly and be able to sell and grow their business, right? Uh, and if you've been following our kind of overall vision to be able to kind of reach larger masses. Uh, we have been talking about different categories that could use our stack. As part of that, one of the categories we've been trying is restaurants. Where essentially they're using our faster marketing stack to run Facebook ads. Hope that answers your question. It does. Uh, just a follow-up out here. Eternal continues to be one of your key shareholders. Is there at some level of conflict what you are generally seeing with Eternal, or it doesn't necessarily matter because it's more a passive investor out there? They're using our checkout to be able to convert sort of visitors on their website. And then finally, they're using the hyperlocal delivery Uh, you know, integrations to be able to deliver from their stores. So essentially that's a new kind of category we're trying out amongst, amongst others that we will I don't think, uh, I don't think there's any conflict. I mean, Eternal is a financial investor, first of all, and secondly, it's You know, we aren't really— we aren't in the marketplace business, right? We're simply giving that business tool. For example, restaurants also have PTL and cargo needs. They also have advertising and WhatsApp needs. They also have voice and AI needs. So I think you've got to think of it from that perspective. So I don't think it's, uh, it's not really an apples-to-apples at all. Got it, very clear. And Saahil, when you said in the near-term margins in the core business might be here and in the medium term it will improve, should— is it fair to say that for a couple of quarters it could be largely range-bound because you continue to make these investments in AI? Uh, Sachin, hard to give you a future timeline, boss. I mean, uh, I think I'm going back to saying the way the business runs is that, right? And then like I said few quarters, you know, the realities of where we need to invest, you know, where is the competition going, all of those things, you know, can make our decisions, uh, you know, difficult to to kind of give you a projection on that. So Sachin, directionally nothing is changing, all right? Uh, just come here. Uh, directionally nothing is changing. There is, uh, As far as core is concerned, there is far greater operating leverage opportunity on the overall EBITDA, and we've spoken about it before, and that Uh, we don't see, uh, any change there, and there is a smaller operating leverage in the contribution margin. So that's how the structure of the team itself is the way it is, and that we don't see a change here. I mean, we're just speaking of quarters essentially. So, uh, if you see in medium term, I don't see any— our We're not seeing much different in our, uh, you know, how the business is running. Got it. Thank you and all the best. Thank you, Sachin. Thank you. We'll take the next question from Della Desai. Please introduce yourself and proceed with the questions. Hi, thanks for the opportunity. Uh, good evening everyone. So my first question is, um, you know, the core volumes have grown 31% year on year. Revenue grew 25%, which implies like a 4 to 5% decline in realizations. And the carriers earlier had mentioned that they've passed through the fuel wage as a cost inflation in Q2. So how should we think about your realization trend against that backdrop? And, uh, how are these carrier costs being passed through to merchants? So if you could just, uh, shed light there. And I have 2 more questions, maybe I can follow it up after you answer. Sure, uh, Della, hi, this is Sahil. Uh, thanks for the question. So your question is like, you know, what's happening on the yield or whatever, right? Yeah, yeah. So look, first of all, the transactions is what, you know, we gain from the market. That's the way, uh, we observe our business because price and margin is the downstream outcome. Uh, price I think is also a function of, you know, how many kinds of customers are making up a cohort or which customers grew more in a certain period. And, you know, that leads to some level of changes there. So for example, if a larger customer grew more Right, the price may look like it's changed along with the volume in that particular period. Uh, so there is some of that effect. So it's a mixed effect in the base along with obviously some amount of changes. Uh, fuel pricing, etc., did get passed on more or less. Like, like I said, we, we don't absorb it and that shows up in the contribution margin, right? So while you see that Uh, 31% on transactions and 25% on growth on revenue, you'll see like similar growth on absolute contribution as well. So clearly the margins have held you know, while this kind of play between transactions and revenue continues to pan out, this is a mixed stuff. Thank you. So what you're saying is the top 5 customers or top 10 customers have grown faster, which is why the, the decline in yields— is that what you're saying? So how the salience moved on these customers? I'm not saying that. I'm saying that customers, basis their mix, can be yielding different, uh, because of their size, right? So you could say that you've had larger customers generally doing better. Or you've added more mid-plus larger customers, and hence you are reflecting in the mix in a certain way. Some percentage points from there, some percentage points also from the carrier mix. So I think it's very hard to try and give you an exact walk, you know, because it kind of fluctuates. This is a mix. I'm simply telling you the variables that cause it. I don't think you should infer at all. doing better. But yeah, there are bigger customers who will slightly better off this quarter. Yes. Got it. So that's helpful. My second question was on martech. You mentioned that 10% of Shiprocket's merchants currently use martech products. So what could possibly be the constraints to adoption for the larger cohort? And, uh, in that context, could you also shed some light on the competitive intensity that we're seeing in martech, especially checkout? Yes, yeah, thanks. So I think, uh, The reason we are at 10% is not because we have adoption barriers, Della. We are at 10% because we started this business from 0% 3 years ago, right? So we are rapidly growing adoption. Uh, which means that, that penetration would only continue increasing. From an opportunity set perspective, obviously there's several tens of thousands, you know, tens of thousands of websites which are running sort of the non-new age checkout, let's call them, which is the majority of the checkout in the website market in India today irrespective of the platform. And from a competition lens, yes, there are— there is competition. You know, it's an exciting market. Uh, there are other players out there who are, uh, you know, going after the same pie. And obviously, you know, Shiprocket continues to try and win this as a full-stack offering using our intelligence and trust with the shipping and so on. So that's kind of the way we are going at it and we are going after our distribution from shipping and from other products in a big way. So that's in some ways sitting on cash So yeah, from there there's a lot of headroom, I look at it as the opposite, like it's only 10% done and every month we're adding like tons of customers. It is— we are growing very rapidly, right, we've almost more than doubled in this business over the last couple of years and continuing to grow at a very, very fast clip and continuing to also be able to demonstrate growing take rates as we're growing in the volumes and, uh, in the, in the GMV are showing that, you know, we're able to go deeper as we're going wider at the same time. So it's exciting times to be in. Got it. So I just want to squeeze in one last question. Sorry to interrupt you, ma'am. Ma'am, there are other participants. Sure, I'll come back. Thank you so much, ma'am. I request to all the participants to kindly limit their questions to only 2 per participant. Should you have a follow-up question, please rejoin the queue. We'll take the next question from the line of Avinash Sharma from JM Financial. Please go ahead. Hi team, uh, thanks for the opportunity. Am I audible? Yes. Yeah, uh, so I have 3 sets of questions. Uh, so one of the 3PL players in its earning call highlighted their increased focus on the D2C market, and I presume this to be one of our top supply partners. So how does this impact Shiprocket and the risk associated with it, given that we rely on them and they're targeting what was our key focus area in the first place? Okay. Okay, thanks, uh, thanks, Avinash. Goodbye. Uh, sorry, Avnish. Thanks, this is Saahil. Yeah, um, so I think the, you know, if you think about it, a large part of I would say more than 90% of our business is D2C, right? Because we created the category and we're trying to build this as a to-end solution. Now this is a high-yield category because shipping here is not just the a cost leader. It's an experience builder. It's a way, uh, you know, small merchants reach out to consumers pan-India. So they need the best shipping provider and best experience to build business. So I think from the carrier perspective, like, they— it's a high-yield category, and if you map the whole market, you know, there's larger, very large D2C, and then there's like the long tail. And then there's everyone in between. So I think, I think we are concentrated in some ways towards slightly different parts of the market. That being said, our offering doesn't change based on what our suppliers would like to do. Right, our value prop and the fact that we're able to build solely for this segment and be able to offer them marketing, checkout, shipping, all of it in a box in a connected way. continues to be how we compound, right? Um, you know, we— like, if we pan the overall market and look at the growth rates of e-commerce, look at the growth rates of quick commerce, and look at the growth rates of D2C as a market and then you look at Shiprocket growth rate in the last couple of quarters or H1 sequentially, you'll get a fair idea of how this was affecting if anything at all, uh, in the overall sense. I hope that's useful as an answer, Avnish. Understood. And my second question was, uh, last quarter, to my question on seasonality, uh, management highlighted that Q3 is a seasonally weak quarter. I want to understand, when we say seasonally weak, is it in terms of growth or is it in terms of margins? So while I understand that D2C brands might push sales through the marketplaces during the festive and hence could be impacting growth, so how should we see on the margins going forward in the seasonally weak quarter. request you to kindly rejoin the queue for call. There are others who are waiting for their turn. Sure. Thank you. We'll take the next question from Garima Mishra. लो वॉल्यूम, दैट्स ऑल। या, तो आई थिंक योर और योर स्ट्रीटशिप सीज़न। यस। मैं रिजल्ट डैमेज। वी जस्ट टॉकिंग या, सीक्वेंशियली। या। Understood, understood. And lastly, on, uh, so emerging markets improved around 1,000 bps, but the absolute loss is still low. So, uh, I'm sorry to interrupt you, sir. I would This should be no change, Avnish. It's just lower volumes, that's it. So you will see it last year, you will see the year before, you will see it this year. It's not us, it's the way— like, as you rightly, uh, described in this quarter, large brands and a lot of our brands actually decide to either not sell aggressively on the D2C channel or they start pushing their inventory into marketplace, and the marketplace marketing dollars are, you know, at the all-time high. So brands also pull out of PPC for us like a month or so, and that ends up hurting the quarter a little bit. But it's not, it's not in terms of margins or anything, it's just, uh, Kindly introduce yourself and proceed with the questions, ma'am. So hi, am I audible? Yes, you are. Yes, you are. All right, uh, thank you so much for the opportunity. My questions were more on the emerging business. So Tanmay, you did mention in the presentation that you've been adding an increasing amount of revenue on a quarterly basis in this particular segment. Um, so let's say, you know, uh, the 30+ crores that have been added sequentially, is this a number that is sustainable, or you think, you know, this is a number that can just keep going up given the traction we are seeing in some of the subsegments? I think it is, but then the interesting part is that if you look at— let me just break this, right, in terms of what is driving Right, so let me start with this. Checkout. Uh, and the entire martech suite. Now on the martech suite, which has grown at 102%, the interesting reason why we see this growth rate continuing is that when you think of a decision maker for a martech suite, the person who's making a decision for the checkout is the same who will take decisions for the ads and for the engage remarketing, and we are seeing more and more of these products selling, right? So the momentum will continue, uh, that is one. And the fact that you know, we've only sold to 20,000 out of a very pretty large base. Uh, I also wanted to point out on martech is that on ground, and this is someone else asked this question And I would add here that we do find that our product has much superior results as, uh, is backed by, you know, visibility of the Uh, actual data, etc. So yeah, in terms of anonymous shoppers identified, in terms of address index accounts, we're like 10-20% better. than what we see across the market. So I think this is— we have a strong proposition there and it will continue. The second is on the omnichannel that is riding on the rails of the quick commerce growth like we mentioned, and that will, uh, and that we just begun to be frank, right? Uh, it's a very early game, so On both the key growth drivers, there is a lot of confidence that we should see sustained growth. If I was able to— got it. Yeah, yeah. All right, that is very clear. Um, second question is on, let's say, margins for both the segments. Now if I see the core business particularly, right, you will see at least this quarter the way I compute is simply a contribution minus EBITDA gives you the fixed cost of the business. That fixed cost itself is up from 18-19% on a Y-Y basis, and of course we don't have too much quarterly history here. But you think there is potential for this fixed cost growth at least to sort of keep coming off with time, particularly for the core business? Yes, uh, I mean, with scale, clearly you wouldn't— you shouldn't see, uh, the growth in the overhead cost, uh, is going to be much lower versus growth in revenue. So that answer is a straight yes, uh, very much, uh, on the core. core business period. Understood. That's, uh, the questions I had. Thank you so much. Thank you. We'll take the next question from Kunal Thanvi. Please introduce yourself and proceed to the questions. Hey, hi, thanks. This is Kunal from Banyan Tree Advisors. I had a few questions. First of all, congrats on good set of numbers. One question was on Power Merchants. So if we see this number, you know, it has been slightly, uh, you know, stagnant or degrowing in recent times. Uh, if you can share with us, how do one think about these power merchants and the growth from a longer-term perspective? And have we reached the plateau, or it is something that we are not able to break through? Uh, the second question was on martech, like, and, uh, even, you know, Uh, the omnichannel business on martech, we saw like last quarter the growth run rate was closer to 200% and it is 100% now, like we are doing in omnichannel. If you can help us understand the unit economics, who pays us, uh, you know, what is the role of, say, Blinkit and Zepto, like Is it like which number is, you know, is there a base that has caught up, like how do we think about the growth on martech from a longer-term perspective and also from a medium-term perspective because as you said the penetration is much lower. Like, is like, you know, uh, that was the second question. And omnichannel, the question was around unit economics. Uh, we understand, like, like you in the presentation, you did explain, you know, what are they paying us or they are not paying us? it can theoretically be even higher margin than the core business at some stage. Uh, how do one think about the omnichannel business, uh, omni business, you know, uh, from a longer-term perspective? Like, if you can just run through that business in slightly more detail along with, uh, you know, some unit economics indications, uh, because like, will it be better margin business? Because martech, we understand Thanks. So yeah, so Pavel, the, the, uh, Pavel, you There are 2 interesting things happening. Uh, one is that you see that while we have been consistently adding to the funnel, uh, which is you know, in terms of growth in the count of overall merchants we have, you would also— you also notice that the ARPU isn't adding up significantly. Now, as the— so that's what we influence, right? So we add merchants, and as the business of the merchants grow, they become power, right? So yes, there was a fluctuation. I think— I don't know if it was one quarter, two quarter, or whatever, for a very, very short period. Because we are looking at, you know, trailing 12 months numbers, you could— you may not see an effective power, but I think the entire funnel growing, the fact that the ARPU is growing The power count, uh, you will see it ramping up. Uh, that is, uh, how we've seen this before. So this is— we are going to continue. Number 2, on the, on the overall checkout market, yes, there is a little bit on the, on the basic and so on. of a very small base and so on. But largely, you know, the kind of growth that you're seeing now is something that we see it's something that, you know, uh, is not difficult to sustain, right? So that, um, is on the martech. Third is on omnichannel. Omnichannel, our customer is the merchant. Right, it's not, uh, we're not monetizing from the quick commerce per se, so our unit economics is very different. Uh, so, uh, this is Sahil Kunal, just to kind of share what we do there. Basically, we work with, uh, D2C brands who need slotted deliveries into certain, uh, quick commerce outlets, Flipkart, Tesco, Flipkart Smart, and we do integrations with their POS system. So the brands pay us for a, like, a consolidated on-time appointment delivery, and we are able to hit SLAs of, uh, you know, uh, 97 to 97%, which are the best in the market, which continues to give us a very rapid business, right? Uh, so it's our same like D2C customers who we were doing last mile in their website for and then started doing checkout and other things for them. Now it is their kind of quick commerce channel fulfillment replenishment. Which is becoming a big part because quick commerce continues to have high tailwinds. You know, I think like a third maybe I'm guessing is D2C, and that is growing as a share. Quick commerce is growing. And hence the need for sort of digital replenishment and reconciliation and kind of integration with the marketplace so that everybody— everyone is more efficient. That is sort of the proposition. So the margins are indexed to, you know, what we're able to— what we have to pay our suppliers to move the goods and what the brand is paying us. So they are healthy margins, you know, similar to our other logistics. style businesses. Fair, very clear. So basically in this business one should expect that, you know, the trajectory in terms of profitability, profitability, and, uh, you know, the way you charge will be similar to what you do. why should that lead to our power merchants kind of, you know, degrowing? Uh, how do one read it? Is it like too much reading into it, or like— I, I don't, uh, get Okay, can you also talk more about the power merchants? I'm not able to understand because like I understand that you're, you know, adding a lot of merchants, uh, but Still, you know, what's the reason for that? So, so, Kunal, I think, uh, Tanmay briefly tried to explain this. Basically, here's how we run our company, right? We want to add more paying customers first. Correct, because as they become paying customers, they grow, and as they grow, they become power merchants, they become large merchants, and so on. Now, in periods where the market goes through rapid growth the growth of our cohort itself will create more power merchants in periods where the market is like, you know, the merchants are going through different cycles or our base becomes bigger, bigger, bigger. In certain periods, we might see that customers, you know, for example, if a company focuses heavily on acquiring new customers and all of my marketing dollars are going towards getting new customers into the base, I'm building my base to be able to then kind of funnel them up. This is what Tanmay was saying, that over the quarters, as some of these newly acquired customers become larger, many of them will end up converting into power merchants. Because if you think over 3 years Our paying active merchant base has gone from I think like 1.5 lakh, 1.4 lakh, something like that to now 2.2-2.3 lakh this quarter. So the base has gotten added now in the last 18 months. And now people from here will graduate up into becoming power merchants. Other than that, you can look at total ARPU, you can look at average ARPU and total customers. That's another way to look at what's happening. Because as we've rolled out multiple emerging businesses, multiple units, there's multiple funnels happening at the same time. So you have to take a slightly longer-term horizon to this, but it's in no way Will I guide you to say that it is capped or anything? It's not like that. It's a matter of time, right? As people graduate and they grow, more people will be in the power bucket or whatever, right, as the overall market शॉर्ट फेयर एंड लाइक मार्टेक लाइक एस गम्मे सेड दिस काइंड ऑफ़ रनवेज़ सॉरी टू इंटरप्ट यू सर सो बट दिस द विल डे बी थैंक द लास्ट यू सो क्वेश्चन मच सर फॉर Please, and gentlemen, that was the last question for today's call. On behalf of Shiprocket, that concludes the Q2 FY27 earnings conference call. Thank you for joining us, and you may now disconnect your line. Thank you. Okay. Goodbye.