CarTrade Tech Limited (NSE: CARTRADE) Q2 2025 Earnings Call dated Oct. 28, 2024
Corporate Participants:
Vinay Sanghi — Chairman and Managing Director
Aneesha Bhandary — Executive Director and Chief Financial Officer
Analysts:
Siddhartha Bera — Analyst
Ankit K — Analyst
Sachin Dixit — Analyst
Akshay Satija — Analyst
Vijit Jain — Analyst
Rahul Ranade — Analyst
Mohit Madhiwala — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to CarTrade Tech Limited Q2 FY ’25 Earnings Conference Call.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performances and involves risks and uncertainties that are difficult to predict.
As a reminder, all participant line will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Vinay Sanghi, Chairman and Managing Director of CarTrade Tech Limited. Thank you, and wait to you, sir.
Vinay Sanghi — Chairman and Managing Director
Thank you. Good afternoon, everybody, and welcome to CarTrade’s Q2 earnings call. I want to — of course, we’ve uploaded our presentation and the financials for all of you to see in advance. I just want to start off with saying that it’s been a good quarter for the company. In this quarter, we’ve achieved the highest ever revenue and profit before tax in any quarter.
We’re the Number one automotive platform in India across use classifieds, horizontal classifieds and of course, vehicle auctions. We received almost 77 million monthly active users on — across all our platforms, CarWale, BikeWale, OLX, etc. We — I think what is more remarkable that drives the performance of the company, 95% of these users come to organic sources, which means we don’t pay for these users to come on to the platform. We are now covering almost 150-plus physical locations. The auction at a rate of 1.4 million vehicles a year.
Revenue for the quarter is at INR172 crores, which is highest, as I said, adjusted EBITDA is at INR57 crores, INR56.8 crores is also our highest ever. Profit after tax is almost INR31 crores. And as you know, we have a strong cash balance debt free with about INR832 crores of surplus cash.
If you go to our consolidated results, which is on page six. As I said, our revenue is INR172 crores. Revenue has grown by 27% in Q2 over last year. Half yearly revenues at INR328 crores, which has grown by 35% year-on-year. So the six month results showing a 35% growth in revenue. If you see our margins, our EBITDA margin, EBITDA is up at INR32.7 crores for the quarter and EBITDA margin jumped from 15% last quarter to 21%, which shows the leverage in the business.
Then increase in revenue — what we are able to demonstrate is an improvement in our operating and EBITDA margins. As you can see, even the EBITDA is up from 21.58 last quarter, which is almost a 50% jump in EBITDA quarter-on-quarter, 54% jump from last year. And half yearly EBITDA jumped 104%, INR54.8 crores consolidated from INR26.65 crores last year. And therefore, you see the margin gone up on 11% to 17% half yearly.
PBT is up by 44% to INR37.14 crores for the quarter and INR61.29 crores for six months, which is up 48% half yearly from last year. And that’s what showed the leverage in the business, a 35% increase in revenues resulting in a 48% growth in the profit before tax. PAT for the year — for the quarter first time INR30.72 crores, which is up 500% from last year and INR53.62 crores half yearly, which is up 189% from last year at INR18.55 crores. So generally, you’ve seen a very strong set of revenue and profit growth with increase in margins across all periods.
If you look at adjusted EBITDA, which is just moving the cost and adding the interest income, it’s at all time high of INR56.81 crores, up from INR42.8 crores last quarter and 37% year-on-year growth and almost INR100 crores for the six months ended, which is up 38% from last year. So this is on the consolidated results, because the stand-alone results, which is for the consumer group contains CarWale, BikeWale, some of these brands. Revenue was up — operating revenue was up 23%, which is INR55.62 crores.
Other income is down because of the acquisition of OLX last year, our cash balances have gone down, and therefore, see a slight dip in interest income, but operating revenue up 23% for the quarter, 20%, six months at INR106 crores. It’s been a strong quarter performance of the consumer group. I think the highest ever revenue in any quarter.
You see the employee costs and other costs well in control now, which shows the operating leverage even though the revenue is up quarter-on-quarter and year-on-year. You see the actual costs, overall expenses are flat or close to flat, which is really resulting in the massive 464% growth Q-on-Q on EBITDA and last year [Indecipherable] becoming INR18.4 crores of EBITDA in the first six months here.
So massive growth in both EBITDA over the small increase in revenue — with these increases in revenues. PBT, again, is showing a 71% up to INR19 crores and half yearly up at 30% to INR32 crores. When you look at profit after tax, INR15.75 crores versus INR12 crores last quarter and INR10 crores last year was up by 55% and INR28 crores for the six months on the stand-alone side, which was up by 27%.
So you see a strong operating performance here, slightly lower other income just because of the reduction in cash balances due to the acquisition of OLX, but overall, again, very, very strong operating metrics being reported in the stand-alone results.
When you look at the remarketing result, which is on page eight, we had a modest growth of about 3% — INR57.24 crores and 3% for the year at INR105.84 crores. But we’ve kept our expenses under control, and there’s been slight cost reduction, which has resulted in a 34% growth in profit before tax at INR10.26 crores and INR14 crores for the half yearly, which was up by 29% to last year.
PAT is also up 32% at INR7.59 crores and INR10 crores for the six months ended at 26% up from the last year. So generally a strong financial performance. We like the revenue growth be stronger, but the financial performance has been quite strong even in Shriram Automall and the Remarketing Group.
When you look at the OLX results, which is on page nine. OLX, obviously, there’s a growth over the previous quarter from 49.48 [Phonetic] from 48.23 [Phonetic]. It is difficult to compare over last year just because only two months of operation during the first half of last year. But at six months now, we’ve achieved 97.72 [Phonetic] revenue for the six months ended September ’24.
EBITDA is up at Q-on-Q from INR8.05 crores [Phonetic] to INR8.55 crores and half year is now at INR16.6 crores. I see a small improvement margin from 17% to 18% quarter-on-quarter and PBT is up as well. PAT is slightly down, and that’s partly only because of tax incurred on other income on some of our interest income we incurred some tax, and that’s why the PAT is slightly lower than the previous quarter. But generally, operations are stable. We feel it’s a reasonably strong financial performance. Revenue growth is something we feel we’ll achieve a stronger revenue growth something we’ll achieve in the coming quarters, but generally a strong, stable performance from OLX as well.
This is a good summary of the consolidated and subsidiary accounts in finance and operating metrics. I’d be happy to take questions now from each one of you. Thank you.
Questions and Answers:
Operator
Thank you so much sir. We will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Siddhartha Bera from Nomura. Please go ahead.
Siddhartha Bera
Thanks sir. Hi sir, congrats on a good set of results and happy Diwali greetings to the entire team. Sir, first question I have on the OLX business. So if you see the ramp up, now it’s been like close to one year, we have this business, we are operating and running this. How do you think has been the performance? Is many of the improvement still yet to play out or do you think it is taking longer? If you can guide us about how to look at the revenue scale up in the OLX business and some more color about which are these segments? Any mix or any more data, if you can share in terms of OLX? How the business is changing or what are we doing here to sort of scale up the revenues it will be helpful.
Vinay Sanghi
I think — happy Diwali to you as well. The second thing is we’ve — over the last — it’s been about 11 months to the end of September, for the — from the acquisition of OLX, I mean, sorry, 13 months or so and obviously, the 10 in those first 13 months was around stability of technology platforms, teams recruiting all the product technology teams, moving all of this technology and product to our own environment, stabilization and growth traffic, consumer traffic, processes and sales, etc., etc. And the segments are pretty much the same. It’s 45% of it is auto, used cars and used two wheelers and the rest is non-auto, which is led by real estate jobs, electronics, mobile, etc., etc. We’ve obviously — there has been revenue growth in the last 13 months of operation during this period. And we feel a lot of the things we’ve done and a lot of the foundation we’ve laid the significant part of that growth will come in the future. When you take over a business, I think you layer a foundation where over the next five to 10 years, you can see that growth.
So some of it started to play out. Obviously, the auto side is something we were more comfortable with and obviously, lot of the initiatives were launched in the automotive side first. But now we are also working heavily on the non-automotive side, which is other segments of real estate mobiles and jobs, etc. etc. And we do feel in the coming quarters, we’ll start seeing a more — a stronger growth in revenue, I would say, across various sectors, which we’re working on there. So we feel very confident about that. We also feel very confident about the quality of traffic and users of — and the brand of OLX, right? I mean almost 30 million people a month, some every month. And as you know, we spend no advertising on OLX, which just shows the affinity of the brand, right? It’s one of the leading — or probably the leading use product platform in the country where people can come in and sell their products or buy used products, right? So we feel lot of the initiatives we’re taking will — a lot of the growth, which is — will show in the next few quarters by the initiatives we’ve taken in the last 13 months. But when we took over the business, it’s important to bring full stability and transfer of technology and product to our environment first. So that’s what we did. But we feel now — we are actually working on the business very hard, on various aspects of sales processes and other things to make sure or to — a strong foundation for growth in the future quarters coming ahead.
Siddhartha Bera
Got it, sir. Sir, second question is on the consumer business, where we did see a very good growth sort of playing out. Here, again, if you can throw some light about how is the mix between OE and new and used car and where is basically the stronger traction if you are seeing any particular segment worth highlighting?
Vinay Sanghi
Here the consumer group is mostly 85% new vehicles, right, as you know. And there itself, the car industry has been at a very modest 2%, 3% growth in the first six months of the year. In fact, in the last two, three months, it’s been de-growing. And the two-wheeler industrial had a robust growth of 18%, 19% for six months, as the industry has been. We’ve actually seen growth across segments across all new, used segments. I feel one of the — even though the industry of car growth — the growth in the car industry only 2%, 3%, it is still at a high base of last year, and that’s helped us as well. So we feel good about the car industry, as well as the two wheeler industry and the used car industry the way they stand. Some of the results have come in the first six months, and we just hope and we think that some of this will play out still in the two, three quarters coming. So it’s been a reasonably strong performance from the consumer group, both on the car side, bike side, new and used both, I think.
Siddhartha Bera
Got it. Sir, lastly, on this auction business, now volume seems to have gone up quite a bit compared to last quarter or year in the current quarter. So are we looking at any signs of turnaround in this business also as we enter the second half of the year or do you think this business also may take still longer for some of the recovery to play out?
Vinay Sanghi
We think that this — it definitely seems to have bottomed out the reposition cycle, right? It doesn’t seem to be getting — it seems to have bottomed out. We do feel confident that this business now seems to be getting better. And of course, the other segments when we position have gone down, we’ve built other segments, which we are also helping at this point of time. So it’s a mixture level of cost control, little bit of revenue growth, but we do feel that in the next couple of quarters, somewhere should deliver a reasonable performance. And it’s hard for us to right now say with the repossession in banks and NBFCs are getting stronger or not. I mean if it is early to say that, but we do feel it’s bottomed out, that’s for sure.
Siddhartha Bera
Got it sir. Thanks a lot. I will come back in the queue.
Vinay Sanghi
Thank you.
Operator
Thank you so much sir. The next question is from the line of Ankit K from SmartSync. Please go ahead.
Ankit K
Thank you for taking my question and congratulations on the good set of number.
Vinay Sanghi
Thank you Ankit.
Ankit K
So my first question is related to all the three segments, actually. So if I look at the segmental revenues, coincidently, all three businesses are having roughly the quarterly revenue run rate of INR50 crores today. And — but when you look at the life cycle of all the three businesses, probably all three are completely different in their life cycle revenue. So I just wanted to know from your side, I’m not looking for any guidance, but just directionally, how do you see these business — these three businesses, three distinctly different kind of businesses growing or going from here over the next, say three years to five years, qualitatively speaking, I’m not talking at any numbers, but how do you see the line growing?
Vinay Sanghi
Thanks for the question. I think the first part is because the consumer group, which is CarWale, BikeWale. It’s 85% new vehicles, right, which is cars and two-wheelers. And obviously, we feel with the car industry, India is the largest two wheeler market in the world, right? It is also Top five car markets of the world. And naturally, for our country to grow, when you look at the penetration of cars in India, if you’re going to be at 30 or 40 or 1,000, the penetration is extremely low. So you do feel over a long period of time, three years to five years is what you’ve asked, the car industry will grow and the two-wheeler industrially will continue to grow with personal mobility on the rise. And therefore, we feel very strongly the health of the consumer group by itself, which is 85% dependent on new vehicles, right? We also feel for us if you have seen two years, three years ago, it is harder because you know when there was a semiconductor issue and other supply chain issues in the automotive industry, and demand was more than supply, it affected us because it stopped manufacturers and dealer from advertising on our platform because they didn’t need to. They were sold out because of just the availability of vehicles is low.
When availability is high, which is what the situation is today, where supply is more than demand, it’s a little more favorable for the company, and we do see a strong demand cycle for the next three years to five years in the automotive industry, but you also see supply being available. And therefore, we feel very confident about the consumer group by itself over a three to five periods. And obviously, what our attempt is not only is to go, as we said earlier, in CarWale or in BikeWale too not to move from a situation or go deeper into our transactions with our manufacturers and dealers and for our customers who will not be able to find their car, select their cars, connect to a dealer online, but also tomorrow buy cars online. So we’re moving and building technology and going deeper in that process for all our customer and dealers and manufacturers. So naturally we feel confident about that.
On the Shriram AutoMall side, in the last year and half, with reposition of vehicles coming down and supply to us coming down from that source, we had built a whole retail segment, which is almost 40% of our business today. So obviously, we believe optimistic about growing the retail side of the business, but we also believe in times to come, with financing going up, demand for vehicles going up, new vehicles, the repossession will also grow. And obviously, in the next three years to five years, we feel both the retail and the repossession market will grow and Shriram AutoMall will be a strong player, will be a big beneficiary of that. So we feel confident about that.
And then the third is OLX where the TAM of the business we operate in is limitless, right? It is basically handles all used products in India. It’s the Number one or leading place where any consumer can sell a used product or buy a used product. So we obviously feel that TAM in India is just, as I said, limitless I can’t put a number to it even. We have a large set of Indian consumers, who — I mean, as some of the data we’ve shared before, more than 30 million users a month come on OLX to sell a product or to buy a product, use product. And we have obviously a significant leadership here. So there’s limitless growth opportunities here, whether it’s used cars, whether it’s used bikes, whether it’s used mobile phones or good household goods, like furniture, etc., etc., or even homes. And we feel very confident about OLX’s future here as well over the next three years to five years.
On the whole, across all three businesses, we see tremendous amount of levers to grow. I think one thing I would add here, as you might know, that — and we’ve demonstrated successfully over the last five, six quarters is that every increase in revenue in this company, results in a very strong profit growth. We have lot of levers in our business as normally when our revenues go up, only a small amount of manpower cost goes up with it, but a large part of the revenue growth used to profitability, which you’ve seen.
Ankit K
Got it. Got it. Thank you so much for the detailed answer. Is it fair to assume that, say three to five years down the line probably our consumer business will form a large chunk of our revenue compared to what it is today, because that is as well fastest growing also?
Vinay Sanghi
No, we don’t think so. I think all the three businesses have opportunities. I mean they’re all similar size today, but we don’t — it’s hard for us to say that one is within the other. They all have their reasonable opportunity to grow. So I wouldn’t want to predict that the consumer group will be the largest or OLX will be the largest or Shriram AutoMall will be the largest. I don’t want to predict that right now, but all the levers to grow.
Ankit K
Got it. Got it yeah. So second question is related to the competition. So ever since we got listed and we started doing concall and presentation, one slide which has always been there is what you share regarding the Google trends where CarWale is always on top compared to all the other competitors, which you share. When I look at the on-ground feedback from maybe customers or dealers, we get some really good feedback about the competitors also in terms of the business, which is happening. So can you share one reason why on Google Trends we are so high on the chart and consistently?
Vinay Sanghi
It’s a brand, right? So Google Trends is basically how many people search your name whether it’s OLX or CarWale or BikeWale into — they search your name, right, and come to a platform, which means that it is — the number of people who remember CarWale versus other people. That’s what it is. It’s a digital brand index. And that’s what it is. It’s got nothing to do with dealers. It’s got to do with consumers. It’s the reason the 77 million MAUs come to these platforms. Just to give you context, 77 million people a month come to CarWale, BikeWale and OLX, that’s a huge number. And 95% come in an organic manner, which we don’t pay for it, completely free of advertisement [Phonetic]. That’s why you have the margins we have in the company, because 95% of our users come without any advertising costs, which is partly a reflection of Google trends, as you see, right? And which is why the consumer group or CarTrade Tech as a company is extremely profitable is because of the brand affinity of CarWale, BikeWale or OLX. These are strong brands now in the businesses we run. And that’s a reflection of Google trends. It’s got nothing to do with talking to dealers actually, it’s not connected with that. It’s a consumer index.
Ankit K
Thank you so much. That was very helpful, and all the best for the future.
Vinay Sanghi
Thank you.
Operator
Thank you sir. [Operator Instructions] The next question is from the line of Sachin Dixit from JM Financial. Please go ahead.
Sachin Dixit
Hi Vinay, congrats on a great set of results. Three coming to questions, I wanted to understand the [Indecipherable] that we can probably cater to first of all, I wanted to just check on that –.
Vinay Sanghi
The voice is not clear. Say it again, please?
Sachin Dixit
Sorry, I was saying that on OLX side, you — we have discussed that there are a bunch of low-hanging fruit we can cater to in order to deliver the growth that we wanted. I wanted to just get an update on that. Where do we stand on that? Have we seen any ramp-up in terms of advertising income coming from OLX or any price hikes or any such things? Can you please give an update on that?
Vinay Sanghi
So you know on OLX, I think what the things we’ve been working on as far as the automotive side, which is the used car classified side of OLX, right? And then in non-automotive side, there’s also an advertising side, which is driven by advertisers coming and putting this advertising on OLX side, the three different revenue sources in a way. That is — I would say a lot of work has gone in. I wouldn’t say that a lot of the revenue, what we — what we feel would kick in very quickly has all come in. I think we will probably see some of this growth coming in the next two to three quarters. And obviously, a lot of the foundation platform work is done, right, which is the products side, technology side, people side, processor side, so many small, small things after the M&A. But as I said, some of it has come in, in terms of revenue growth, which you can see and some of it is a lot of it yet to come. And we just feel like OLX is a kind of a platform where we’ll always be saying this over the next three years to five years because this is so much the TAM is limitless, as we say, right? Once we get one side, we got the other side and keep going deeper and deeper to monetize more and more aspects of the platform, right, and get more of more consumers on board. So it’s a non-stop effort. I think we all are spending lots and lots of hours on it. And we do feel in the coming quarters, you’ll see some of that. And even the coming years, not just the quarters because, as I said, there’s just no limit to what can be achieved in OLX over the next five to 10 years.
Sachin Dixit
Understood. Quickly on revenue side on OLX again, right, so we delivered roughly 2% Q-o-Q growth. Now if we recall like when this acquisition have been last year, we did talk about almost 20-plus percent plus odd growth. In order to deliver that, it looks like we need to deliver anywhere between 30-odd percent, 30%, 32-odd percent Y-o-Y growth over H2. Do you think we are on track for that or that’s going to be miss on that piece?
Vinay Sanghi
I don’t know, I don’t want to give any guidance on revenue. As I said Sachin, we don’t want to give any guidance. So we’re working on, obviously, all the growth levers. And some of them will happen next six months, some will happen in the six months after that. But all I can say we do see a very long-term growth opportunity here. I don’t want to talk about the next three months or six months, very specifically. I mean the one thing what is happening in OLX is that every quarter we get better than the last month, right? And not just in OLX, I think that applies in the consumer group as well, where we actually make progress every single quarter. You see the numbers, almost every single quarter, but year-on-year better, right? So we’ll keep doing that. And some of it will play out now or some will play out after three months, six months, but the effort is to continuously do that. And as I said, again, when we grow our revenue, the margin expansion is quite high, right, the moment we grow revenue.
Sachin Dixit
Right. That’s fair. Coming to new auto side quickly, on that we slightly delivered close to 23% growth in the quarter while auto industry continues to struggle to say the least. Do you see this trend sustaining? Obviously, you have highlighted that this is probably the best time and advertisement has been peak.
Vinay Sanghi
Yeah, we see — we see some of this continuing. I think I do feel like October, December normally is a better quarter than even — than even July to September, normally year-on-year. I don’t think that’s changed at all. I do think October, December, it is going to be better. And probably this trend might continue, is possible that I do see that volumes are generally at the highest ever for two wheelers and cars, even though the growth is low for cars, although absolutely no growth, but the volumes are pretty high and supply is higher than demand. So it’s reasonably a favorable market condition, I would say.
Sachin Dixit
Sir, the reason why I asked that question was last year in H2, our Y-o-Y growth dipped quite sharply compared to H1. So that’s why I am asking this question.
Vinay Sanghi
The growth rate — not the absolute number, the growth rate may be lower.
Sachin Dixit
Yeah, growth rate. So which is where I’m coming from, like do you see that growth rate like this 23% Y-o-Y growth rate sustaining in H2 or we can expect [Speech Overlap].
Vinay Sanghi
I don’t want to give a guidance on growth rate, but all I can say is normally the market conditions are slightly better. And I do feel like these quarters will be better than the previous quarter. That’s what I do feel. Is that — but I can’t — I don’t want to give a growth rate guidance.
Sachin Dixit
No worries. Thanks so much. Happy Diwali. Yeah, thank you. Thanks Sachin. Thank you, happy Diwali.
Operator
Thank you sir. We have the next question from the line of Akshay Satija from Alpha Invesco. Please go ahead.
Akshay Satija
Hi, congratulations on a good set of numbers and happy Diwali to all of you.
Vinay Sanghi
Happy Diwali.
Akshay Satija
Sir, my first question will be, for our remarketing business, our EBITDA per car sales have improved from what it was in Q1. So I just wanted to understand is it because of contributions from maybe retail sales, higher number of retail sales, or it’s just that, as you said, the operating leverage that you sold more cars.
Vinay Sanghi
It’s part of the operating leverage [Speech Overlap] it’s also some cost. It’s also the remarketing. There’s also some cost reduction, but it is also — the product mix has not changed much, but it’s — there is some cost reduction as well, which will help.
Akshay Satija
Okay. If you could specify the numbers for retail and B2B that you do for remarketing?
Vinay Sanghi
Aneesha, you want to give it? But I think it’s 40% is retail, which is quite similar to what it was earlier, 39% earlier, it’s 40% now I think. So it’s quite similar actually. Not much has changed.
Akshay Satija
Okay. Sir, could you also share the new versus used car ratio for the consumer business? And if you could just go a little into detail for the abSure business that we have. So what would be sort of revenues? My belief is that we report abSure revenue under the consumer business, so what would be the revenues or volumes for the abSure business and how many stores that we hold of abSure as of now?
Vinay Sanghi
Sure. So I think the first part, about 86% is new in the consumer group. That’s one, which is pretty similar to what it was, 85% and now it’s 86%. That’s the first question. The second question is abSure. So Aneesha, you want to tell how many outlets we have, but I’m sure plus — abSure outlets are actually growing. What’s that? What is that?
Aneesha Bhandary
165.
Vinay Sanghi
165 are the number of outlets. We normally don’t disclose the volume and the revenue as yet. But the 165 outlet is something obviously we are growing. And not only are we growing it here, I think OLX has a very similar number of OLX branded stores as well for used cars, right. Am I right, Aneesha? Similar number? Sorry, go ahead.
Aneesha Bhandary
About 170.
Vinay Sanghi
170, so that would be actually 335 such stores now. So the intent of these stores, I’ll be honest was and still is the ability for a consumer to come online and select a good certified car and then buy it with a — eventually buy it in a one click experience, so they can actually have a completely online experience. And we’re working towards that, but the coverage actually improved with the OLX acquisition. The 165 actually become about 330 now, or 340 stores.
Akshay Satija
Okay. So my final question is, could you just elaborate a little on the Automall stores and on that front, so say we list roughly 1.2 million cars a year, but we are selling only 20% of those cars. Just wanted to understand what happens to rest of the cars? Are they kept as an inventory? Not with us, but with someone who’s listing it with us. Just wanted to understand is that inventory carried forward to the next quarter or Just wanted to understand the business trend there?
Vinay Sanghi
Sure. First, a large part of that inventory does not come physically. It’s not — I don’t have the exact number yet, but a large percentage only comes online. It doesn’t ever come physically to us in the Automall. Some percentage comes physically and even in that percentage, if the seller decides not to sell it, they can take the vehicle back and then give it back whenever they feel they would like to sell it again. So, the 20% — I think it’s 25% or 28% is a conversion ratio, which is of every hundred vehicles coming to auction that many get sold, I think that’s what it is.
Akshay Satija
Okay. Do you see this number probably could go up or –?
Vinay Sanghi
No, it’s been quite stable actually. It’s not gone up. It’s not gone down. It’s been quite stable. I think the conversion ratio would probably be stable. Our attempt here is of course to improve conversion ratio by getting more buyers, but it’s also through increase in volume on supply. I think they’re two different efforts here, but we don’t see much — there’s not been much change over the last couple of years in the percentage actually.
Akshay Satija
All right. That’s it from my side. Thank you.
Vinay Sanghi
Thank you. Thank you.
Operator
Thank you, sir. [Operator Instructions] We have next question from the line of Vijit Jain from Citigroup. Please go ahead.
Vijit Jain
Yeah. Thanks.
Vinay Sanghi
Hi, Vijit.
Vijit Jain
Hi, Vinay. Hi, Aneesha. Congratulations on great 2Q across the three businesses. My first question is, so I note on the presentation that organic traffic growth was especially stronger than the overall growth this quarter. But you did increase your standalone marketing spend about 20% this year — this quarter, right. So my question I guess is, is that with an eye towards the next half of the year? Are you seeing any trends which makes you want to increase your marketing spend here? And I think a related question to that is, in addition to what you show on Google Trends, one can see on app traffic and other third party data sources as well that you have taken market share in both cars and bikes from the competitors this year, especially on the bike side. So if you could give a view on what is happening there really? Have — is your business in the bike side, for example, particularly higher now this year versus last year?
Vinay Sanghi
Yeah, okay. The first is the marketing spend. Marketing spend in these businesses is very — I would say, tactical, but it’s very — it’s not brand driven expense or traffic driven expense, it’s very targeted at manufacturers who may want to sell a certain kind of product and who are spending money on advertising and they try and build a specific consumer for them and that traffic and their advertising has incurred with them. 20% is up, but it’s a very small number. I mean, the numbers are really small, right. Our total [Speech Overlap] insignificant, so the amounts are very insignificant here. That’s one.
I would not think and correlate that with any increase in advertising or any significant increase in advertising spend in the next six months. I would not think that would happen. It may be — directly a little bit in correlation with a bit of revenue, but it’s not likely to go up substantially in the next six months at all. This is also not driving the growth in traffic, as we said. This is — actually the organic percentages are going up. It’s 95% now across platforms. So it is going up. The brands are getting stronger. Our consumer traffic actually in absolute terms if you see, it is in the deck as well in one of the last two slides, is substantially up. So, the quantum or traffic up cannot be done by advertising. This is just done on brand and organic basis. Two wheelers have gone up a lot and so have cars gone up. So both traffic on both concepts gone up. We do feel that — one is that, as I said earlier, the demand for cars is not down, it’s just that the growth rate is down, right. If you look at the first six months actually it’s grown by 2%, 3%. So it’s not negative, number one. Number two, the two wheeler industry has been very, very strong, which has shown growth in every parameter, right. I mean the volumes have gone up. Traffic is of course going up. Everything is going up. So, it is — it’s a massive opportunity for us as well, the two wheeler side but both cars and two-wheeler have been quite healthy. So this traffic — in fact the traffic growth has been very, very healthy I would say. Also some of the new launches, have fueled this, right, I mean we had a couple of big launches in the car market where there’s a lot of interest on traffic, right. I mean, the traffic side.
Vijit Jain
Right. So, Vinay, any broad sense on, I don’t know if you want to — if you don’t want to disclose split between say two wheelers and four wheelers, maybe some sense in terms of what growth rate you saw in the two categories this year?
Vinay Sanghi
It’s been strong on both sides, I would say. I mean, two wheeler is on a smaller base, right, so it outpaced the growth. But generally it’s been strong both places. The revenue split is something — Aneesha, have you given the revenue split on two wheelers and four wheelers? No, not yet. Not yet, right. Not yet. Okay. Because it’s quite — okay. It’s — actually we didn’t mix up. This has been in OEMs and dealers, not so much on two wheelers and cars. And that’s the reason we’ve given the OEM and dealer split. But the — I think we see robustness in both actually, cars and two wheelers both have grown.
Vijit Jain
Got it. Great. And my next question is the remarketing business, right. So I guess the shift — the mix shifted a little bit in the repo favor this quarter because obviously I can see the — auctions went up, but the realizations went down. So [Speech Overlap]
Vinay Sanghi
Slightly better. I think, there’s some suppressed pricing of used products as well, used vehicles as well, which has affected a little bit, but generally that’s, what I said, repossession seems to have bottomed out. It’s always hard to predict, because not something in our control but seems to have bottomed out, that’s what I said earlier in the call. It seems to be a little better.
Vijit Jain
Right. And you have — I mean, I think you mentioned it around the end of 4Q results, but you have added about 100 locations across Shriram Automall, abSure and OLX this calendar year, right. I think last 4Q you were around 350, now you’re at 450 thereabouts. So could you give us a sense of where these additions are coming? Are these mostly in abSure here or [Speech Overlap]
Vinay Sanghi
Yeah, they are mostly in abSure, Signature and OLX. They’re not — they’re not in — Shriram Automall has a very few. So it is almost all there.
Vijit Jain
Right. And so basically about 50 to 100 store adds [Speech Overlap]
Vinay Sanghi
Probably about 100. Probably close to — I don’t have exact number, but almost all the additions will be there. I mean, I think — I don’t think [Indecipherable] am I right? Could be more than, I mean, like, five. They don’t — we don’t really add very many Automall. So it’s mostly come in OLX and abSure.
Vijit Jain
Got it. So with abSure, do you think you could — this is a pace that you could probably continue to — [Speech Overlap]
Vinay Sanghi
Yeah. That seems logically the pace, yeah. There are lot of work to be done on — to the pace, which probably will continue both on the OLX side and the abSure/Signature outlet. What we’re looking at doing is obviously adding a lot more tech and product to it and over time as consumers want — the whole idea of getting is to — also is to give a differentiated experience to our user on CarWale or on OLX, right. And I think that is something we’re working on. Distribution seems to be catching on, but now we’ve got to also — when you come to the consumer, provide this one click like ability to buy a used car if you want to do so, right, I think that maturity will also come in consumers over time, right. So it’s a combination of all of that.
Vijit Jain
Got it. And my last question, Vinay, just OLX business, given the nature of the business, the October, November, December quarter should have a fair bit of seasonality related uptick. I mean not just — I mean I know you said that for the auto business, but also [Speech Overlap]?
Vinay Sanghi
OLX to — it should be better — it should be better, because normally October — October is definitely normally better. November the holidays and stuff, so you don’t always know, because Diwali, there is no — by the time people come back — by the time businesses really start all over again, right. But generally this O&D is normally a little better than July to September generally, yeah.
Vijit Jain
So the question I was trying to — the answer I was trying to get to also in part Vinay was — we have a lot of these festive season sales at the e-commerce platforms run and I would imagine some of that will drive traffic to yours for used transactions. Is that a fair understanding of how this would work?
Vinay Sanghi
No, I don’t think they’re really connected with — even though every e-commerce platforms have sales, not convinced that they’re directly correlated with the traffic on OLX or — definitely not CarWale. But I would think that this season is normally better for anybody, right. I think normally October is always — this year Diwali and Dussehra both happened to be in the same month as well. So normally it is a strong month always.
Vijit Jain
Got it. Understood. Thanks Vinay. Those were my questions, and Happy Diwali to you and Aneesha.
Vinay Sanghi
Happy Diwali. Thank you, Vijit. Thank you.
Operator
Thank you so much, sir. We have the next question from the line of Rahul Ranade from Goldman Sachs Asset Management. Please go ahead.
Rahul Ranade
Yeah. Hi. Thanks for the opportunity.
Vinay Sanghi
Hi, Rahul.
Rahul Ranade
Happy Diwali, Vinay and –.
Vinay Sanghi
Happy Diwali, Rahul.
Rahul Ranade
So just couple of questions. So one got answered actually in terms of seasonality for OLX. So you’re saying there could be some bit of a seasonality element in Q3. So, that has answered. But just on the other side, OEM to dealer, we used to share this split earlier on. Did we share that now?
Vinay Sanghi
Yeah. We can give it. Aneesha, you have it? Can you please give the OEM? Was it 67% [Phonetic]?
Aneesha Bhandary
Yeah, 67.33 [Phonetic].
Vinay Sanghi
67:33 [Phonetic]. It’s not changed much. I think, this is — it’s just a model that’s been, I mean –.
Rahul Ranade
Okay. So is it right understanding when you say new to used is 85:15. Then this 67:33, this 67 is out of the 85 and then the 33 is a split between the new and used.
Vinay Sanghi
That is right.
Rahul Ranade
Okay. Okay. Got it. Got it. And lastly, just wanted to check in terms of progress on these allied services that we kind of talk, when we say buying vehicles at the click of a button. So let’s say financing or insurance, have they started contributing to our revenue in any way in terms of –?
Vinay Sanghi
They are very small revenues. Insurance is not, financing in a very small revenue contributor, but the important thing is the tech and all of that is starting to play in, right. So you can see on almost all our platforms now that one keep it within their own, right. I think those are the kind of things and a lot of the products were launched whether it’s abSure or these loans to enable a lot of the future transactions might come online as consumers want to do more and more. So when you buy a loan today and you come to CarWale or BikeWale or OLX even now and you apply it online and you get sanctioned instantly by multiple, multiple banks and vendors, you got a sanction. But from sanction to a disbursement, it’s not necessarily that all the banks and other partners are ready to at this point — or able to do it even at this point. It requires all the documentation, KYC of customers etc., etc., as per their processes. So it’s not fully — I would say, the product — although the deal is sanctioned instantly, it doesn’t still probably give you a loaning account in the next one minute or something, right. I mean the disbursements — the sanctioned disbursement cycle is not fully online yet.
Rahul Ranade
Got it. Got it. So the meaningful accretion in terms of monetization will only happen when that piece also falls in place, is that right?
Vinay Sanghi
I think the important monetization might improve it, but that’s not the intent here. The intent was always that we give the journey to a car buyer or two-wheeler buyer or used product buyer, initially when you buy a product, you can get a loan instantly, so you can buy the car online, like a large part of two-wheeler, then part of finance. So if you don’t get the loan instantly, then buying a car on one click on one is almost impossible, right. Because if you want a loan, the journey anyway is going to get broken. And I think that’s what we working with banks and other stakeholders to see this journey can be completed online. We did want more from a customer experience angle. Monetization is one thing, but it’s also experience.
Rahul Ranade
Yeah. Understood. And just lastly, this is not very CarTrade or CarWale specific, but just wanted to understand from a financial penetration standpoint, if you were to look, let’s say, four years, five years back to now for used vehicles, both used cars and used two two-wheelers, do you see a significantly greater proportion of people going for financing for their used vehicles or is it more or less the same how —?
Vinay Sanghi
New cars — new cars, as you know, it’s for the last four years, five years, maybe last 10 years, it’s been — it’s very, very high, the percentage. In used cars, we’ve actually seen it being not move much. I feel like the industry has grown one. And second bigger thing is that, you still don’t have a large number of organized financials financing used cars, right. A lot of people buying used cars are taking loans from unorganized sources, right. It could be a personal loan, it could be like a personal unsecured loan or it could even be from an employer or someone else, right. You feel that there is a long, long way to go in used financing in India. It’s actually a massive opportunity, I think, for any bank or any NBFC. It’s just a big, big opportunity.
Rahul Ranade
Understood. Understood. Thanks. Thanks, Vinay, for this.
Vinay Sanghi
Thank you, Rahul.
Operator
Thank you so much. sir. The next question is from the line of Mohit Madhiwala from Envision Capital. Please go ahead.
Mohit Madhiwala
Hello, and thank you for taking my question. Great set of numbers, so congratulations on that. Just a few bookkeeping questions. Number one, I can see on the balance sheet that the — in the non-current assets, other financial assets have gone up. While in the current financial — other financial assets, they’ve gone down kind of in a similar amount. Just wanted to understand what that movement has been firstly.
Vinay Sanghi
What is that, Aneesha? Do you want to explain that?
Aneesha Bhandary
I’m sorry. Mohit your question is that, other financial assets have come down and the investments have gone up. Is that the question?
Mohit Madhiwala
No. So my question is that, in the current assets part of it, it has gone down by about INR50 crore from March 31st to September 30th. Whereas in the non-current part, it has gone up by INR58 crores. So just wanted to understand what this is related to?
Aneesha Bhandary
Just give me a second, because most of it would be because fixed deposits. Fixed deposits we would have moved it to investment in mutual funds. But give me a minute.
Mohit Madhiwala
Okay. Got it.
Vinay Sanghi
It must be that. [Indecipherable]
Aneesha Bhandary
No, both [Indecipherable] but no other changes. Total cash balances improved by INR50 crores.
Mohit Madhiwala
Okay. Next question was basically that there’s a been a bad debt written-off of just a very small amount, about INR75 lakh. So just wanted to understand where this has come from?
Vinay Sanghi
Aneesha, do you want to — I don’t remember which slide it was, but is it in a consumer group?
Aneesha Bhandary
Yes, Vinay. We’ve done a cleanup for debtors which are more than three years. We have kept provisions in the — only what was beyond three years is what we’ve written-off this year.
Vinay Sanghi
Yeah. So what we do is the provisioning as per accounting policies and then we move from provisions to writing-off. I think that’s what’s probably moved from provision bucket to the write-off bucket.
Aneesha Bhandary
Right. Yes, We are fully provided. But we fully provided for earlier anyway is what — is what she is saying.
Mohit Madhiwala
Okay. Got it. And the ESOP cost, we are still at the run rate of INR6 crore per quarter, right. So this is expected to continue going ahead?
Vinay Sanghi
Yeah. I think, for this year it is going to be similar. It should, as per the vesting schedule, come down from next year further. Yeah. At this point, it’ll continue through this year and I think it comes down next year as per the vesting schedules.
Mohit Madhiwala
So for FY ’25, we would still be at around a full year INR24 crore kind of on an ESOP cost?
Vinay Sanghi
That’s right. That’s right.
Mohit Madhiwala
And it will be slightly lower than FY ’26.
Vinay Sanghi
It will come down in ’25 — ’26, it will come down. That’s correct.
Mohit Madhiwala
Okay. Got it. And just one last question. What would be a reasonable kind of overall tax rate to assume for the full year FY ’25, because we are currently at around 21% on an effective tax basis. So, just wanted to understand where we can end for the full year given all the OLX, kind of, let’s say losses would have been absorbed [Speech Overlap]
Vinay Sanghi
I think there is no — Aneesha, correct me if I’m wrong, but there is no tax in OLX, right. And there’s no tax in the standalone entities with only tax in Shriram Automall. The tax is assumed on the standalone entity is deferred tax which has come from the change in the budget on how our treasury income is treated, right. I think it’s a full change from long term capital gains tax on debt funds, right, which is the entry you see, it’s not actually pertaining to the quarter, it’s pertaining to a previous period. So, yeah — so the deferred tax will probably continue a couple of more quarters this year and then will go away, it will not be there anymore. So — but generally there’s no tax in the standalone or in OLX this year.
Mohit Madhiwala
Right. Okay. So I think I misspoke previously. The effective tax rate for this quarter is 17%, so that’s why [Speech Overlap]
Vinay Sanghi
17% is mostly deferred tax, which is [Speech Overlap] the change in the budget, right, when they move this indexation on mutual fund.
Mohit Madhiwala
Got it. Got it. So even for the full year, it would be at like what below 25%?
Vinay Sanghi
It’s exactly the same [Indecipherable]
Mohit Madhiwala
Great. Okay. Thank you so much, and best of luck.
Vinay Sanghi
Effective tax maybe lower, because the profit goes up, the effective tax rate should come down. This amount of deferred tax is identical for next two quarters.
Mohit Madhiwala
Okay, great.
Vinay Sanghi
Am I right, Aneesha? This is exactly the same amount. So the profit went up, the effective tax you see would go down actually, because on a normal business income there’s no tax.
Mohit Madhiwala
Okay, understood. Great. Thank you, sir, and good luck for the future. Thank you.
Vinay Sanghi
Thank you.
Operator
Thank you so much. We have the next question from the line of Sachin Dixit from JM Financial. Please go ahead.
Sachin Dixit
I have a couple of bookkeeping questions as well. So the first one being that, when I’m adding the depreciation expense across the three segments, however it’s not matching up with the consol number by a decent margin. Why is that the case?
Vinay Sanghi
What is not matching, sorry?
Sachin Dixit
Depreciation expense, and this is consistent across a few years and quarters, like this is what we keep on seeing.
Vinay Sanghi
You’re saying when you add up depreciation doesn’t total, that’s what he says.
Aneesha Bhandary
Yeah, because there’s an entry on add consolidation, Sachin. There is a contract asset that we’ve created on the SAMIL acquisition. That entry gets passed only at consolidation. So the one plus one will not equal to the consolidated number of depreciation. It’s an [Speech Overlap] set of accounts.
Sachin Dixit
Is it fair to assume that we use that plug to be a part of Shriram Automall business or the marketing business, anything for segments?
Aneesha Bhandary
No, it’s a very specific entry for the Shriram acquisition which was done in 2018, where a contract asset was created. It’s a depreciation on that particular asset, which is created in the consolidated set of accounts. It’s not to do with OLX or consumer group. It’s only for the Shriram acquisition.
Sachin Dixit
Yeah. Understood. A second question is on lease liabilities. So we are seeing that lease liabilities went up by roughly INR10 [Phonetic] between March 31st and September 30th. Considering that the business is largely non-asset heavy, where are these lease liabilities arising from?
Vinay Sanghi
It’s also from OLX, right, I think, Aneesha, is it where it come from correct?
Aneesha Bhandary
Yeah.
Vinay Sanghi
Aneesha, you want to answer it, it’s rentals for OLX, right. Because it’s only been two months of the year. Last year only two months, one and a half months and this year is the whole year.
Sachin Dixit
But this is a balance sheet entry, right? You are giving a snapshot as of March 31st or September 30th, number of months accounted that should not make a change?
Aneesha Bhandary
Sachin, which numbers are you comparing in the balance sheet early is –.
Sachin Dixit
Yeah. In balance sheet, lease liability as of March 31st were INR112 crore. They went to INR122 crore this September 30th. What are the increase is coming from?
Aneesha Bhandary
The increase is coming from SAMIL. There was 7 million [Phonetic] new users added in SAMIL from the comparative what you’re saying, from March to September.
Sachin Dixit
Understood. Understood. All right. Thank you so much. That’s it.
Operator
Thank you so much. We will take this as our last question for the day. I would now like to hand the conference over to management for closing comments.
Vinay Sanghi
Thank you everybody for joining this earnings call, and we are quite buoyant by the quarter we just had and look forward to talking to you again in the next quarter. Happy Diwali to you and all your families. Thank you, everybody. Thank you.
Operator
[Operator Closing Remarks]