CarTrade Tech Limited (CARTRADE) Q3 FY23 Earnings Concall Transcript

CarTrade Tech Limited (NSE:CARTRADE) Q3 FY23 Earnings Concall dated Jan. 25, 2023.

Corporate Participants:

Vinay Vinod Sanghi — Chairman and Managing Director

Aneesha Menon — Chief Financial Officer and Director

Analysts:

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Tushar Sarda — Athena Investment Management Pvt. Ltd. — Analyst

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Nishit Jalan — Axis Capital Limited — Analyst

Jeetu Panjabi — EM Capital Advisors — Analyst

Sachin Shah — Shah Investments — Analyst

Abhishek Dave — Bright Securities — Analyst

Presentation:

Operator

Ladies and gentlemen good day, and welcome to CarTrade Tech Limited Tech limited Q3 FY ’23 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 performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]

I now hand the conference over to Mr. Vinay Sanghi, Chairman and Managing Director, CarTrade Tech Limited. Thank you, and over to you sir.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you and good morning, everybody, and thank you for taking the time out early this morning for this call. Now what I will do is run you through a few key financial highlights and then we can clarify all your doubts and questions which you might have. I think the first part is really which — on our presentation which we’ve, of course, shared with each one of you, on slide number 2 are the key highlights is we have on a nine-month period had a revenue growth of 23%, adjusted EBITDA growth of 30%, and adjusted PAT by 43%.

As you can see here, the number of vehicle auctioned are more than approximately 1.1 million annualized, traffic is 35 million unique visitors per month for the last quarter, organic continuous, which is unpaid or traffic we do not pay for, is 87.6%, which is again healthy in the last quarter. We have also achieved the highest ever revenue at close to INR116 crores for the quarter and nine months close to INR311 crores and highest ever adjusted EBITDA in the quarter, which is INR36.6 crores, which is almost about 85.1% now over a nine-month period. So, we had our probably our best revenue quarter or adjusted EBITDA quarter, PAT is INR14 crores for the quarter, adjusted PAT, adjusted for ESOP and deferred tax, which is deferred tax for ESOP is for nine months approximately INR52 crores.

The company is obviously debt free and continues to have strong cash balances approximately about INR1,000 crores. I just want to highlight that even though we had a highest ever revenue and the adjusted EBITDA quarter, it has been a challenging quarter for us. I think these results are in spite of some of the challenges we faced in the business.

If we go to consolidated financials, which is next slide for each one of you, as I discussed revenues gone up for the quarter about 13%, adjusted EBITDA also for the quarter 13%. This is Q-on-Q, year-on-year. For the nine-month period that I discussed with you, it is 23% revenue growth and 30% adjusted EBITDA growth. The adjusted EBITDA, as we discussed, of course, INR36.6 crores. For the quarter, adjusted PAT is INR24 crores, and PAT is at INR14 crores, as we highlighted in the previous slide.

If you see the EBITDA margin without other income is about 19%. Of course, with other income it’s close to 33%. Even our adjusted PAT has grown by 43% for the first nine months. When we come to the standalone financials, which is in the next slide, this has really been a good quarter for our consumer business, CarWale, and our standalone financials reflect that. There is a 45% growth in revenue and 128% growth in adjusted EBITDA for the standalone accounts. Even on a nine-month period we have shown the consistency and growth in the consumer business which is a 40% growth. And as you can see, the 92% growth in adjusted EBITDA.

I think there are some of the things we’ve been talking about through the last few quarters is that when we see revenue growth, our costs don’t escalate in relation to the growth of revenue, and you can see costs Q-on-Q almost flat, but big growth in revenues. And that reflects in the 92% growth in adjusted EBITDA. Costs are not growing in relation to the revenue growth. From these numbers you can see it. Adjusted PAT standalone is up by nine months of 100%, and even when you look at PAT on standalone, it was close to INR11.8 crores or INR12 crores. And as you can see now, the margins without other income in the standalone entity is almost 22%, which is double of the last year same period, so it was 11% in the third quarter last year and it is now doubled to 22%, which shows the leverage in the business itself when revenue goes up.

If we go to the next slide, the remarketing or the auction business, or Shriram Automall’s financial results, as we’ve had a very, very good quarter in the consumer business, the remarketing business has had lot of headwinds, and it’s been a tough, tough quarter for them. Revenues actually down 9%, EBITDA is down 44%, although 9-month revenue growth is 11% and EBITDA there is down by 9%. So it’s been a really, really tough quarter. I think this is primarily, as we had talked earlier, we’ve had some falls in our supply from repossessed assets and that’s caused this revenue degrowth in the quarter. This is also a business which has got leverage, so when revenue degrows, also EBITDA falls. As we have seen, when revenue grows, also it grows [Indecipherable]. So I think that’s part of the leverage in this business as well, but it has been a tough, tough quarter and that’s primarily because we’ve seen supply of repossessed assets come down.

This was also the case in the previous quarter. So we are hoping that, of course, this is market driven, and we are hoping that maybe in the next quarter or the quarter after that, this would correct itself, but at this point, there are headwinds in this whole repossessed asset sales. The one thing is that our retail vertical within your supply of vehicles from retail channels has gone up and has been growing nicely. So we feel that one is that that’s actually helped even maintain this performance because that’s been growing at a reasonably fast clip, and we feel that may be over the next few quarters the growth in that business it will help our volumes and performances in the remarketing division. But it has been a tough quarter for this business.

If we go to the next slide, these are the monthly UVs. It’s up to about 35 million from last year’s same quarter was 31 million, which are every month a unique visitors and our average monthly unique visitors on our consumer platforms — all our consumer platforms. If you look at our Google search popularity, that’s also maintained a reasonable or sufficient distance from all our competition on both CarWale and Bikewale side, and if you look at the auction volume or auction listing volume, both have degrown and that’s in reflected by the revenue degrowth as well.

This is what I wanted to highlight with the overall financials. I am happy to go into questions and clarifications. I just want to give a few more numbers which we normally give out on the consumer business. One is that our dealer shares of this business has been going up over the last year. Now about approximately 38% of our consumer business comes from dealers and 62% in the last quarter came from OEMs. Our new vehicle business approximately 84%, 16% is used, but the used business has had reasonably substantial growth over the previous year, so the percentages were almost 90%-10% on 84%-16%, which shows a growth in the used vehicle business. So, these are the other couple of highlights I wanted to give out to you. I think the other last point would be the share of the repossessed business itself, as I said, is going down as a percentage of our total business and retail business is going up in Shriram Automall business. That’s the key highlights. I thought we can take Q&A clarifications from here.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Vijit Jain from Citigroup. Please go ahead.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Yeah, hi. Can you hear me?

Vinay Vinod Sanghi — Chairman and Managing Director

Hi, Vijit, how are you?

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Hi, Vinay. Good morning and congratulations. Looks like a good set of numbers on the standalone business and thanks for the remarks on the remarketing business as well. My question is looking forward into the next year, obviously, this year in the standalone business, your margins are nicely expanding, but you have kept your marketing spend steady and employee cost steady as well. So looking forward into next year, how should we think about the standalone business in terms of margins and in terms of marketing spent? That’s my first question. And the second question is if you can give an update on where we are right now with abSure?

Vinay Vinod Sanghi — Chairman and Managing Director

Sure. I think the first thing is that I don’t think marketing spends will see any dramatic change over the next year, if that’s the question. I think we feel that, as you can see, our Digital Brand Index the relative [Phonetic] competition is strong, and we think that it will be similar — all in similar proportion to our revenues. In terms of wages, you will have definitely wage escalation based on increments, some adjacent hires, etc., etc., so we do see that — and that’s the leverage in the business where even though wages will go up, it is not in relation with the growth in revenue. And that should see — if there is revenue growth, it should see margin growth as well, as we’ve shown over the last year. The fundamentals of the business remain the same where increase in revenue does not have proportional increase in cost, just as the nature of the business. So we see that continuing, or the dynamics of that continuing. AbSure we continue roll out and continue to get stronger at. It’s still a very new business for us. It’s really an early-stage business for us. So, I think we’ve gone to 73 locations, Aneesha, am I right, is it 73?

Aneesha Menon — Chief Financial Officer and Director

Yes, Vinay.

Vinay Vinod Sanghi — Chairman and Managing Director

And we continue to roll out and we continue to work closely with dealers and customers to make sure experience for them is best in class.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. Thanks, Vinay. And just two housekeeping questions then from my side. You already mentioned the mix of revenue on the consumer side. If you could give the Y-o-Y growth rate for new versus used, OEM versus dealers, that will be great. And on the remarketing side, if you could give a current split of mix between retail and repossessed that would be great.

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah. We can give retail and — last year same quarter the repo was about 70%. It is down to 53. Retail was about 19%, 20%. It is up to 34%. So I think that’s changing. The mix is changing there in that business. And the growth on new and used, Aneesha, do you have that here handy?

Aneesha Menon — Chief Financial Officer and Director

Yes, Vinay. On the new side of the business, the growth was about 27%. On the used side of the business, it was about 154%.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. This is for the quarter, right?

Aneesha Menon — Chief Financial Officer and Director

You said Y-o-Y. Okay, for the quarter it would’ve been 19% and 161%.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. And how about between OEM and dealers?

Aneesha Menon — Chief Financial Officer and Director

The OEM business, again, you would want for the quarter, right? Not for the nine months.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Yeah, for the quarter. That’s right.

Vinay Vinod Sanghi — Chairman and Managing Director

We’ll come back to you.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Yeah, sure. Thanks, Aneesha. That’s my question. I’ll jump back into the queue.

Aneesha Menon — Chief Financial Officer and Director

Sorry, I have the — OEM is about 24% and dealer is 37%, Vijit.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. Thanks, Aneesha.

Aneesha Menon — Chief Financial Officer and Director

Thank you.

Operator

Thank you. The next question is from the line of Tushar Sarda from Athena Investments. Please go ahead.

Tushar Sarda — Athena Investment Management Pvt. Ltd. — Analyst

Yeah. Thank you for the opportunity. This is the first time I am attending the call, so I just want to understand your revenue source in the standalone business. When you say consumer business, so is this advertising revenue you get or is this transaction revenue?

Vinay Vinod Sanghi — Chairman and Managing Director

So, on the consumer business, we monetize car manufacturers and dealers [Indecipherable] products for sale for new cars and used cars for sale to consumers, and we monetize both of them for advertising a lead revenue. The transaction revenues are insignificant here. On the auction side of the business where you have sellers and buyers auctioning vehicle, it is all transaction revenue.

Tushar Sarda — Athena Investment Management Pvt. Ltd. — Analyst

Okay. So that’s also in the standalone, right, the transaction revenue?

Vinay Vinod Sanghi — Chairman and Managing Director

No. The remarketing is the auction and the standalone is the consumer business.

Tushar Sarda — Athena Investment Management Pvt. Ltd. — Analyst

But remarketing is mostly that Automall, right?

Vinay Vinod Sanghi — Chairman and Managing Director

It is Shriram Automall. The company name is Shriram Automall. There is an online, offline business. It’s digital business.

Tushar Sarda — Athena Investment Management Pvt. Ltd. — Analyst

Okay. Thank you. Thank you very much.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Siddhartha Bera from Nomura. Please go ahead.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Yeah. Hi, sir. Thanks for the opportunity.

Vinay Vinod Sanghi — Chairman and Managing Director

Hi, Siddhartha.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

And congrats on a good standalone performance on the margin. Sir, I wanted to first check on the outlook. Obviously Q3 we have done quite well and reported a very strong double-digit growth. As you said, operating leverage is very important in the business, so just wanted your thoughts on how you are looking at the growth in the coming year across segments going ahead?

Vinay Vinod Sanghi — Chairman and Managing Director

We normally don’t give any growth guidance, but to be honest, I think we being through a year off a situation where the auto industry has seen, as you can see, this year probably grew at about — the car sales have probably grown about 25%, 28% for the year. And it’s been a strong year for the growth in the new car industry. And also the used car demand has been quite strong. It’s hard for us to tell what the next year in the auto industry would be, but I think their growth rates would be much lower than this 25%, 28% in the industry you are seeing for next year.

So, also what might happen — so that’s one part, but also on the other hand, supply may be higher than demand. I think we’ve seen some shortages of cars this year. Next year you might find that with the growth of demand slowing down, we might find the supply is higher than demand. And then that becomes a little more favorable for us because then dealers and car manufactures tend to spend heavily on advertising. So we see similar market conditions. It’s hard for us to give any real growth guidance at this point.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Understood. But just in terms of your mix, which segment do you think can grow at a much faster pace like right now dealers is growing at quite a healthy…?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah. I think this trend will continue for some time. The dealer and OEM, retail and repossessed trend will continue. I think it maybe a longer-term trend. I just feel that in advertisement, you come to advertising, the first part is the OEM, which is far more aggressive in the first year of our business, and then the dealers over time the advertising grows. So I feel the dealer growth rate may continue to if possible outpace the manufacturer growth rate. It’s possible.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

And on the margins, again, we have seen some — in terms of our unique visitors also slightly coming down quarter-on-quarter. Is it seasonal phenomena or is it because we have sort of cut back on our marketing spend that it has come down? Some clarity on that.

Vinay Vinod Sanghi — Chairman and Managing Director

No, no, I don’t think it is related to that. I think it is just if you see last year same period, it was 31 million. It’s 35 million now. October tends to be very heavy — September, October month tend to be very — those two, three months are very heavy buying seasons just in India. So, it’s marginally — it was 37 million the quarter before, it’s 35 million now. I don’t think it’s a reflection on what marketing spend. It’s also a reflection of consumer demand.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Okay. So you are saying this level of 12%-odd marketing expense will be a sustainable number going ahead?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah. I don’t think the marketing will change too much. No.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Okay. And sir, on this abSure, if you see last quarter, we had about I think 62 locations. Now we are at 73. So we added only 10 I think stores in the quarter. We I think had estimated to touch close to 120 by the year end. Is this still on track or do you think the ramp up here is slightly slower?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah. I think rule out is a little less than what we predicted a year ago. And I think that’s also conscious to make sure that we get the right locations, the right franchisees, the right model, the right customer experience, etc., etc. As again I said, abSure is one part of our used car business. So it’s a very insignificant part in our total business. It’s a very early-stage business. So, volatility in that business it’s because [Phonetic] very, very early is greater than the other businesses which are far more stable. So I think it will probably be another maybe 20 locations or 25 locations by March, it looks like that from here.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Okay. Any medium-term guidance you would look to highlight, like in the next two, three years what you want this to be in terms of total…?

Vinay Vinod Sanghi — Chairman and Managing Director

Sorry, I didn’t get that. I didn’t hear the last question, sorry.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

In terms of the ramp-up, any two, three-year out guidance you want to give about how many stores you want to be in abSure?

Vinay Vinod Sanghi — Chairman and Managing Director

No, I don’t think at this stage we will give a forward guidance on it. But the idea is to be present and roll out as quickly as we can. It’s also subject to getting the right location, the right franchisee, and the right experience in that location.

Siddhartha Bera — Nomura Securities Co. Ltd. — Analyst

Okay, sir. Sure, I’ll come back in the queue.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Sachin Dixit from JM Financial. Please go ahead.

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Hi, Vinay and Aneesha. Good morning.

Vinay Vinod Sanghi — Chairman and Managing Director

Hi, how are you?

Aneesha Menon — Chief Financial Officer and Director

Hi.

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Good. So quickly on the numbers, obviously, as you mentioned, that standalone numbers are brilliant, remarketing business did see some headwinds. I was just thinking it through. On remarketing, considering it’s so much market dependent, do you think there are levers that you can pull within the company to drive growth? You do mention the retail business growing, but do you think retail or any other business that you can put your efforts into can drive decent enough diversification for remarketing business?

Vinay Vinod Sanghi — Chairman and Managing Director

No, you’re absolutely right. And I think this is something we discuss internally is that how do — repossessed was 70% of our business a year ago. It is down to 50-odd-percent, right. So, I think the view here is that how do we grow other verticals within the company or within the remarketing company and retail — vehicles from retail sources is becoming a significant contributor to us and growing at a significant pace, so that’s clearly one area. We like the commercial vehicle side auction; we like — there are multiple verticals there. So, we are focusing a lot on other verticals. Maybe one can say that we should have done it earlier and derisk in a way a fall in one segment, but now it is happening. I think we are becoming more and more widespread out from supply sources now, rather than some part coming from the repossessed.

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Good to hear. And quickly on this abSure business, I know you mentioned that it’s nascently small, but meanwhile, is there any headwinds that you are seeing like why do we not see any metrics being released on this business anymore?

Vinay Vinod Sanghi — Chairman and Managing Director

Why didn’t we see anything, sorry?

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Why do we not see any metrics being released for this business?

Vinay Vinod Sanghi — Chairman and Managing Director

It’s just very early. I think it’s very early. We’re still trying to — as I said, it’s been a 1.5 year or so, maybe a little more than that, from piloting to experimenting to putting up the first rollouts to again understanding customer experience, franchise profitability, and again rolling out. So, these are early-stage business. As you know in India, early-stage business like one to two year old businesses, it is still — it’s become more stable now in terms of our own understanding. So we are just trying — and as I said, it is very, very insignificant in our financials at this point. We also feel the next three to five years it’ll still be at a very small percentage of our total business, although we are very excited about it and we’ve got a very good asset-light model. We are still trying to get full understanding on customer experience, franchise profitability, etc., etc. When it becomes a little more stable, then we’ll start rolling out metrics which matter. We are still uncertain on metrics which matter.

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Got it. Just one final question on the remarketing piece again. We did see very minor revenue growth if we take out the purchase of stock and trade portion from the revenue on a sequential basis. Why did other expenses grow? What was it attributed to?

Vinay Vinod Sanghi — Chairman and Managing Director

In fact, I think it’s actually degrown by 9%. The remarketing business has not grown, it’s degrown by 9%, but the other expenses grew because we’ve got certain contracts with certain customers. And during the quarter, we normally get confirmation of these contracts and deliveries to customers on our valuation business. And during the quarter, we had at least INR2 crores of confirmations from customers on our valuation business. Our valuation business actually is a low-margin business. And then the corresponding cost got booked, which is the cost of carrying on those inspections and valuations. And therefore, you see a little jump in variable cost, which is the other income — which is in the other expenses. Am I right, Aneesha? Is that correct?

Aneesha Menon — Chief Financial Officer and Director

Yes, Vinay.

Vinay Vinod Sanghi — Chairman and Managing Director

This is probably a one-off. I don’t think you will see that again.

Sachin Dixit — JM Financial Institutional Securities Limited — Analyst

Got it. Thanks, Vinay. Thanks, Aneesha.

Aneesha Menon — Chief Financial Officer and Director

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Nishit Jalan from Axis Capital. Please go ahead.

Nishit Jalan — Axis Capital Limited — Analyst

Yeah. Hi, Vinay. Hi, Aneesha.

Aneesha Menon — Chief Financial Officer and Director

Hi, Nishit.

Vinay Vinod Sanghi — Chairman and Managing Director

Hi, Nishit.

Nishit Jalan — Axis Capital Limited — Analyst

So Vinay, I have two questions on our two businesses. So new car business obviously is doing well for us. So there I just wanted to understand you partly eluded to this that whether the dealers’ spending in terms of marketing which had come down very substantially, whether as a percentage of revenue how much they tend to spend, is it back to normal levels or is it yet to come to normal level because this demand versus supply issue is still there? So that will be my first question.

And is there any room for us to add more dealers on the new car side or our growth will be more dependent on existing dealers spending more? So what will be the drivers of growth in the new car business?

Vinay Vinod Sanghi — Chairman and Managing Director

Sure. A year ago, the market conditions were not favorable where demand was much, much higher than the supply. I think you are seeing that only a few products, and there are still a few cars or vehicles where supply is lower than demand. So, it is not, I would say, a fully favorable position, but it is much better than a year ago. I think most predictions are that over the next year supply will exceed demand and that’s probably the best conditions for us. But it is not fully — there are still lot of dealers or manufacturers who advertise less because their products are in a short supply. So that’s the first. I think if the conditions were quite bad a year ago, it’s much better today, and probably in the next four to six months it will get even better as supply exceeds demand.

The second question was — sorry, the second question was dealer — are adding more dealers, right? Yeah, I think it’s a combination of adding more dealers as well as at the same time penetration of budget within the existing dealers’ budget. It is still very early days, as we put out reports earlier. It is hardly 13%, 14% of manufacturers or dealer money is spent on digital advertising. In most countries it’s 35%, 40%. So, you should see a long-term shift of dealers’ budgets to digital, number one. Number two is you’ll see more and more dealers coming on the platform, both for new cars and used cars, so its a combination of both those factors. And that’s one of the reason we’re seeing the dealer business now grow at a faster rate than the OEM business.

Nishit Jalan — Axis Capital Limited — Analyst

Yeah. So, Vinay can you share some numbers as to what used to be the marketing spend of dealers and how much it has come back and how much is yet to come back? Any broad numbers just to get a sense how much of it is back?

Vinay Vinod Sanghi — Chairman and Managing Director

It’s on our — RedSeer had done a report for us, which captured some of this. We’ll share that with you.

Nishit Jalan — Axis Capital Limited — Analyst

Okay. And would you be able to share some details on how many new car dealers we are impaneled or we are getting business from? So you just mentioned that one thing which is very clear is that the digital spent of dealers will increase, so that will benefit you. Their overall spend will probably increase, that will benefit you. I just wanted to understand how many dealers we already have who are paying us and how does it compare to the overall dealer…?

Vinay Vinod Sanghi — Chairman and Managing Director

We’ll share that as well. There are three, four buckets of dealers for us. There’s a new car dealer, a used car dealer, and then used auction dealer which buys them on auction, all three. We’ll come back on the dealer figures.

Nishit Jalan — Axis Capital Limited — Analyst

Sure. And secondly, Vinay, the second question is on the tougher business right now which is auction. So if I look at that, last couple of years have been good for auction business but was not good for overall auto industry, so probably repossessions were happening, people were not able to meet EMIs. Now the growth is back, business is back. Is that a reason you think that the repossessions are down? And if that is true, then for the next two, three years if auto industry looks good, then don’t t you think that repossessed vehicle auction business could continue to be under stress?

And secondly, if I heard the numbers correctly, you mentioned repurchased vehicle is 59% in this quarter, which was 70% Y-o-Y, right?

Vinay Vinod Sanghi — Chairman and Managing Director

In this quarter it is 53% and was 72% last year same time.

Nishit Jalan — Axis Capital Limited — Analyst

53% versus 72%, okay. So you are seeing some growth — mid-teens kind of growth in your rest of the other business 20%?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah, the rest of the business is actually growing at fast clip because this is degrown — at a fast clip. Make sure this is in the 9% — it’s only minus 9% because the repossession degrowth is much stronger?

Nishit Jalan — Axis Capital Limited — Analyst

Yeah. So your comments on the first part of the question which I asked that can repossessed…?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah, this trend is — we ask this, it’s something we have been debating and talking to multiple people or stakeholders like banks and NBFCs, etc., etc. There are multiple schools of thought. One is you did have a period of last two years in COVID where loan disbursement itself was lower. I think there were some quarters there was no disbursement of loans at all. People were mostly collecting money rather than disbursing. So, it is possible that the loan which is not disbursed may be in the last two years, he’s hit the business because if you are not disbursing a car loan, how do you repossess a vehicle, right? That’s one part. And most of them they were really, what you say, they were just reworking existing loans and making sure that during those COVID quarters, they were restructuring loans rather than disbursing loans. So, it could be partly that.

It is partly also the fact that industry is better. So, corrections are better, maybe repossession itself is lower. It is also a fact could be that used car prices are reasonably higher or resale values are better during a market like this. So maybe customers rather pay than let the vehicle get repossessed. It could be a combination of all these factors. It is hard for us to really tell that repossession is going to change or not in the next three months or six months. I think what we have got to do with the business is really grow other verticals. If repossession does come back, we are of course there, and that will help the company. But it is better that we focus on growing every possible vertical, which is within our control, and I think that’s where our focus is.

Nishit Jalan — Axis Capital Limited — Analyst

Got it. Just two small follow-ups, Vinay. One, have you seen like a repurchased vehicle has come. Have you seen a significant increase in passenger car mix in your auction business, number one? And number two, in terms of profitability will repurchased vehicles be more profitable? Probably we are able to — we would be able to make more — offer more value-added services in that segment, so…?

Vinay Vinod Sanghi — Chairman and Managing Director

No, we make — our margins are better on retail just because the supply is more fragmented. And sorry, the question before that was?

Nishit Jalan — Axis Capital Limited — Analyst

So, the mix of cars, has it increased significantly…?

Vinay Vinod Sanghi — Chairman and Managing Director

No, nothing. No change. I think it is pretty similar. I don’t think there’s going to be any product mix change.

Nishit Jalan — Axis Capital Limited — Analyst

So, if I remember correctly, it used to be one-third of the total volumes. Is that still the right number to look at because I was assuming…?

Vinay Vinod Sanghi — Chairman and Managing Director

The way we track it, commercial vehicle is about 20%. That’s the way we track it. It’s the other way around.

Nishit Jalan — Axis Capital Limited — Analyst

Commercial vehicle is 20%?

Vinay Vinod Sanghi — Chairman and Managing Director

About 20%.

Nishit Jalan — Axis Capital Limited — Analyst

This used to be 30%, 35%, right?

Vinay Vinod Sanghi — Chairman and Managing Director

It was little higher. That was just pre our acquisition of Shriram Automall four, five years ago. I think that is much lower. Once we molded [Phonetic] our online business in, it has been around this 20% commercial vehicle.

Nishit Jalan — Axis Capital Limited — Analyst

Okay. Thank you. Thank you, Vinay.

Vinay Vinod Sanghi — Chairman and Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Jeetu Panjabi from EM Capital Advisors. Please go ahead.

Jeetu Panjabi — EM Capital Advisors — Analyst

Hi, Vinay and Aneesha.

Aneesha Menon — Chief Financial Officer and Director

Hi, Jeetu.

Jeetu Panjabi — EM Capital Advisors — Analyst

Yeah. So what I’m trying to get at is can you give us some color on both the new car business and the Shriram side, what gives — I don’t want numbers. I just want to understand what trends are you seeing there and what do you think the next three months, six months trends look like? Are you seeing signs of weakness, are you seeing buoyancy, are you seeing a new class of buyers coming, whatever? A little bit of a color on both of this would be really useful.

Vinay Vinod Sanghi — Chairman and Managing Director

On the consumer side, which is our new car, used car consumer platforms, actually, we are seeing reasonably good trends. We are seeing obviously the penetration of consumers is already pretty high. Consumers use Internet to research or buy a vehicle. On the OEM dealer side, which is far more pertinent in this business, we are seeing far more adoption of digital generally in the last 1 year, 1.5 year, and I think that trend will only get stronger. So our relationship with dealers are getting stronger, our relationships with OEMs is getting much, much stronger. We are also seeing OEMs interact deeply with us on deep digital integration, which is this whole theory about how do you come online and get a complete experience to buy a vehicle, whether it’s booking a car, whether it’s getting a loan for a car, so you’re seeing multiple, multiple interactions with the OEMs and us around this.

So, the basic trend towards digitization is getting better. Market conditions, as I said, from a new car demand-supply standpoint seems to be getting more favorable, which is always for us a growth in the industry plus supply more than demand is probably the most favorable marketplace for companies like us, and I think we are getting there. It has been probably the worst over the last year. It’s gotten better in last quarter, but it’s been probably quite bad because demand has outstripped supply, and that’s really not favorable for companies like ours where manufacturers and dealers spend money to advertise to sell their cars.

So, this is what we are seeing here. On the remarketing side, I think the biggest issue for us has been the repossessions volumes coming down, but on the other hand, we’ve seen good growth on retail suppliers of vehicles. So I feel that the used car industry on the remarketing side generally across the industry seems reasonably buoyant. It’s we who have to work hard on building other verticals within outside repossession.

Jeetu Panjabi — EM Capital Advisors — Analyst

Okay. So if I were to summarize the next three months, six months, you are feeling about in aggregate as well and things look like…?

Vinay Vinod Sanghi — Chairman and Managing Director

We feel that market conditions are okay and very similarly I don’t think we see any reason that the market conditions are changing any further from what it is today.

Jeetu Panjabi — EM Capital Advisors — Analyst

Okay. And one last question. So we are also seeing a bunch of new model launches, which normally happens, but seems like they’re bunching up now, and also the EV side there’s a few things happening. How would you read that to your thing? It’s all positive from your point of view?

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah. We feel product launches are highly positive for our business. So, EV I feel it doesn’t matter whether it’s an EV or a ICE vehicle for us, but new launches are definitely favorable for us.

Jeetu Panjabi — EM Capital Advisors — Analyst

Okay. Super. Thanks, guys. Good wishes.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you, Jeetu. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Vijit Jain from Citigroup. Please go ahead.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Yeah. Thanks for the opportunity again. Vinay, I just wanted to check back on the comment you made on the remarketing business, the split between repo and retail, so clearly that repo going from 72% to 53% means retail is up — if I do the math right, it is about 60% Y-o-Y, just on that simple math?

Vinay Vinod Sanghi — Chairman and Managing Director

It is in that range, that’s correct.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

So what I was wondering is two things. Obviously, the repo is down significantly 30% Y-o-Y. Might be even close to bottom. Do you think the retail momentum remains as strong as it is in these numbers, 60% Y-o-Y, and therefore, if I think about repo even if it bottom at this end, the retail growing at 60% should give you still decent growth in the overall remarketing business going forward, right? Or do you think that it is…

Vinay Vinod Sanghi — Chairman and Managing Director

Yeah, the mathematics is that, but this growth of retail is on a lower base. The base will become bigger. So, of course, the growth rates become harder. I would just say that we see retail growing because there’s serious effort going behind it, and also it’s a — for us, our margins are better, so it is a better business as well, and far more defensible as well because it’s very fragmented supply. So it has all the elements of what we like, but I can’t predict we’ll be 60% or what percent. But we see there is lot of effort going in here. But as a company, if repossession has bottomed out or does start to go back and grow and our retail continues to be stronger now, it makes us much stronger if repossession does come back.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. And also just a quick question related to that. When I do this simple math of your realizations per vehicle auctioned, I know there are other elements in your remarketing business as well, I can see that the realizations are going up right? And is that to do with this mix shift into retail that is happening?

Vinay Vinod Sanghi — Chairman and Managing Director

A little bit is that, it is true. That is correct. A little bit, it is because of the retail. The margin is better.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. And just final question on the retail remarketing side. So most of this will be driven by the used car listings from consumer on the websites and…?

Vinay Vinod Sanghi — Chairman and Managing Director

It is not actually. It is not. That’s still some part which we are trying to plug and get the synergies across on both platforms, but it is also independent people giving vehicles to these auto malls and then being sold in auction. It is not dependent on CarWale if that’s the question.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Okay. So should I think of this as more of a mix of local dealers giving their vehicles…?

Vinay Vinod Sanghi — Chairman and Managing Director

Local fragmented supply sources which could be a consumer, it could be a very small broker bringing consumer vehicle in, multiple sources. But it is one, one vehicle. It’s fragmented. It’s not bulk from a bank or an NBFC or a leasing company, etc., etc.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. And have we hired a lot of people to kind of push that segment of business?

Vinay Vinod Sanghi — Chairman and Managing Director

Yes, there has been hiring done there. In fact, most of the hiring is there to push the segment. Absolutely correct.

Vijit Jain — Citigroup Global Markets, Inc. — Analyst

Got it. thanks. Appreciate it.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you. Thanks.

Operator

Thank you. The next question is from the line of Sachin Shah [Phonetic] from Shah Investments [Phonetic]. Please go ahead.

Sachin Shah — Shah Investments — Analyst

Thank you. Good morning.

Vinay Vinod Sanghi — Chairman and Managing Director

Good morning, Sachin.

Sachin Shah — Shah Investments — Analyst

First of all, congratulations on a very good set of numbers. I have couple of questions. The first one is that how much would be your ESOP cost or funding over the next four to five quarters? And the second one was that I wanted to understand if there is anything in the pipeline…?

Vinay Vinod Sanghi — Chairman and Managing Director

Let me answer that. The ESOP cost is roughly INR27 crores a year, and that’s been factored in our quarterly accounts and will be probably around what will be this year. We don’t see any significant change in next year if that’s the question. Aneesha, that number is correct, about INR27 crores?

Aneesha Menon — Chief Financial Officer and Director

Yeah. That’s absolutely right.

Vinay Vinod Sanghi — Chairman and Managing Director

Correct. And we do not see any significant change in that?

Aneesha Menon — Chief Financial Officer and Director

No.

Sachin Shah — Shah Investments — Analyst

Okay, understood. Thanks. And the second question as I said, is there anything in the pipeline which you see from an inorganic expansion perspective?

Vinay Vinod Sanghi — Chairman and Managing Director

Inorganic is that the question?

Sachin Shah — Shah Investments — Analyst

Inorganic, yeah.

Vinay Vinod Sanghi — Chairman and Managing Director

We can’t comment on this. We keep looking at businesses and companies, but we can’t comment on this at this stage.

Sachin Shah — Shah Investments — Analyst

Okay. Thank you.

Vinay Vinod Sanghi — Chairman and Managing Director

Thanks, Sachin.

Operator

Thank you. [Operator Instructions] The next question is from the line of Abhishek Dave [Phonetic] from Bright Securities. Please go ahead.

Abhishek Dave — Bright Securities — Analyst

Hi, good morning. Am I audible?

Vinay Vinod Sanghi — Chairman and Managing Director

Yes, we can hear. Please go ahead.

Abhishek Dave — Bright Securities — Analyst

Yeah, congratulations on your numbers. So, I had a couple of questions one is on the abSure business, wanted to know what is the current number of outlets? And previously we were guiding for 120 outlets by the end of the year. Are we on track for that? As a follow up…

Vinay Vinod Sanghi — Chairman and Managing Director

No, we’re not. I think on the call it was earlier asked. We’re at about 73 now. I think we will end up adding about 20 by March, which should be around 90, 95 by the end of the year. That’s what it should be.

Abhishek Dave — Bright Securities — Analyst

And are the revenues from the segment becoming more meaningful now or is it too early?

Vinay Vinod Sanghi — Chairman and Managing Director

No, it’s too early still. It’s a very early business I just told you. It’s almost like an early-stage business within the portfolio.

Abhishek Dave — Bright Securities — Analyst

Okay. And the second question was on the media business. While the remarketing business has been subdued, the media business has performed strongly. What according to you is the steady state sustainable number of unique visitors? And do we ever plan to monetize them directly?

Vinay Vinod Sanghi — Chairman and Managing Director

At this stage there is no plan to monetize consumers directly. See, the steady growth in our consumers now, if we think that most people who buy cars are on the Internet, then the steady growth should almost be similar to industry level growth in a way. But we’re also adding two-wheeler platform, etc., so you might find a little better growth rate in terms of number of users in the industry. But on the whole, do remember that our revenues are not dependent on number of consumers coming to the platform. It is highly dependent on the amount of money manufactures and car manufactures or vehicle manufacturers and dealer spend. Revenue are not completely correlated to number of customers coming on the platform. This is one thing you should keep in mind. The revenues are dependent on the percentage of digital money spent by a car manufacturer or dealer to the advertising money they spend.

Abhishek Dave — Bright Securities — Analyst

Okay, sir. Thank you for the opportunity.

Vinay Vinod Sanghi — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Vinay Vinod Sanghi — Chairman and Managing Director

So I just want to thank all of you for joining the call. As I said earlier, it’s been — although we achieved the highest revenue and adjusted EBITDA, it’s been a mixed quarter where we’ve had a strong performance from our consumer group, and it’s been a tough quarter for the remarketing group. So thank you once again for joining in and taking the time out to hear us out. Thank you, everybody. Thank you.

Aneesha Menon — Chief Financial Officer and Director

Thank you.

Operator

[Operator Closing Remarks]