Aurum PropTech Limited Q3 FY23 Earnings Conference Call Insights

Key highlights from Aurum PropTech Limited (AURUM) Q3 FY23 Earnings Concall

Management Update:

• [00:02:20] AURUM achieved exponential growth, with 3Q revenue of INR 38.6 crores, which was 5 times higher than the revenue from 3Q22.

• [00:02:37] The company said it is confident of achieving its projected 4Q revenue of INR50 crores, despite starting the year with revenue of around INR14 crores.

Q&A Highlights:

• [00:15:52] Aditya Sen from RoboCapital asked about the reason for employee cost increasing from INR10 crore to INR15 crore currently. Kunal Karan CFO said the rise in employee cost evident in 3Q23 resulted due to the addition of new companies. As new companies join AURUM, new team members are added, resulting in increased costs. The company expects this trend to continue.

• [00:18:09] Aditya Sen from RoboCapital enquired about the EBITDA on the RaaS and SaaS business. Kunal Karan CFO replied that RaaS has depreciation cost within it. So if that’s remove, then the RaaS EBITDA will improve more.

• [00:18:44] Aditya Sen from RoboCapital queried about any aspiration target for revenue for the next 2-3 years. Kunal Karan CFO answered that currently the focus is on 4Q23 revenue of INR50 crores. However, there is expectation of exponential growth in revenue for upcoming quarters. AURUM plans to provide more details about this in the next earnings call. The current focus is on delivering the previously projected and committed targets.

• [00:35:07] Rahul Jain from Dolat Capital asked about the organic and inorganic breakup of the growth and the key drivers. Kunal Karan CFO replied that out of the total revenue of approx. INR39 crores in the current quarter, the organic component is around INR2.5 crores, accounting for only 10% of the total. The remaining 90% of the revenue is contributed by the inorganic growth, which may take time to mature as the products are still in the process of being prepared.

• [00:40:13] Rahul Jain from Dolat Capital enquired about the challenges in interest rate and how the macro situation may impact growth projections. Onkar Shetye ED answered there has been a lack of available banking capital for real estate due to the 2014-2020 banking crisis, leading to increased demand for foreign institutional capital. Another significant development is changing consumer behavior between 2015-2020 driving technological advancements and evolution in real estate sector from a consumer perspective.

• [00:42:09] Devang Chokani from Devang Management asked if the company is planning to expand the functions of HelloWorld.  Onkar Shetye ED replied that HelloWorld is company’s integrated ecosystem and now has a new product line called HelloWorld Select. This premier co-living cohort helps the company expand its target customer base and allows to upsell existing tenants to more premium facilities with a strategic focus ongoing deeper in the Student Living segment, leveraging good control and understanding of this large market.

• [00:44:41] Devang Chokani from Devang Management enquired about the growth plans and potential for Aurum InstaHome. Onkar Shetye ED said that InstaHome’s unique business model revolves around “click, set, sold” in the residential real estate resale segment. It offers fair, real-time prices, provide tools for sellers to expand their reach, and offer branded apartments with standardized offerings. They have completed a successful proof-of-concept in Navi Mumbai and plan to expand to other cities while offering exclusive offerings as they deepen their market penetration.

• [00:47:31] Faisal Hawa from H.G. Hawa enquired about any revenue target for FY23-24. Onkar Shetye ED said that the company expects the growth momentum seen in the current year to continue. And plan to make projections in the next quarter, similar to the earlier projection of becoming a INR200 crore company.

• [00:47:41] Faisal Hawa from H.G. Hawa also asked if the company has any plans to merge all the companies fully owned by AURUM. Kunal Karan CFO replied that the subsidiaries were created with specific business requirements and need independent approvals from statutory authorities. Each subsidiary has its own management and should run independently. Mixing them with a larger organization may hinder their operations. Currently, it’s early stages as the acquisitions are recent.

• [00:52:31] Faisal Hawa from H.G. Hawa asked about any progress and data generation updates on the AI and facial recognition software for capturing customer reactions. Onkar Shetye ED said the company has integrated this data into its existing products, including Sell.do. Aurum Analytica will soon use this data to track consumer behavior and predict their behavior over time.