Unicommerce eSolutions Ltd (NSE: UNIECOM) Q4 2025 Earnings Call dated May. 06, 2025
Corporate Participants:
Unidentified Speaker
Kapil Makhija — Chief Executive Officer
Anurag Mittal — Chief Financial Officer
Analysts:
Unidentified Participant
Sumit Jain — Analyst
Arvind — Analyst
Jealous — Analyst
Keshan Keshav — Analyst
Sahil Doshi — Analyst
Rajvi Poladia — Analyst
Darshul Zaveri — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected for Unique Commerce eSolutions Limited conference call. Please stay connected, we will begin shortly. Ladies and gentlemen, you have been connected for UniCommerce eSolutions Limited conference call. Please stay connected, we will begin shortly. Ladies and gentlemen, you have been connected for Uni Commerce these Solutions limited conference call. Please stay connected, we will begin shortly. Ladies and gentlemen, good day and welcome to UNI Commerce eSolutions Limited Q4 and FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on the date of this call.
These statements are not the guarantees of future performance and involves 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. Should you need assistance during the conference call, please signal an operator by pressing Star than zero on your touch tones phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kapil Makhija, Managing Director and CEO of Unicommerce eSolutions Limited. Thank you. And over to you Mr.
Makhija.
Kapil Makhija — Chief Executive Officer
Thanks so much. Hello and good morning everyone. Thank you for joining us. We are pleased to welcome everyone to the quarter four and FY25 earnings call of Unicommerce e Solutions Limited. Joining me today is Anurag Mithran, our CFO along with our Investor Relations Advisor, Strategic Growth Advisors. Before we dive into the business update, I’d like to take a moment to share a personal milestone. Yesterday marks 10 years since I joined Ed Commerce. It has been an incredible journey and I’m truly grateful for the opportunity to witness and contribute to the company and E Commerce ecosystem’s growth over the past decade.
With that, I’d like to start today’s call by highlighting two significant strategic milestones we achieved in FY25. Firstly, the 100% acquisition of ShipsPay Technology Private Limited has been approved by our board and shareholders. As you may recall, we had Initially acquired approximately 48% stake in Chipway Technology Private Limited a complementary SaaS company focused on e commerce enablement. Much like Unicommerce on December 17, 2024. This acquisition aligns perfectly with with our strategic vision to become a one stop shop for E commerce enablement.
Kapil Makhija — Chief Executive Officer
Secondly, I am pleased to share that.
Kapil Makhija — Chief Executive Officer
Following a small existed EBITDA loss of INR 1.1 million incurred during the brief consolidation period in Q3 FY25. Shipway Technology Private Limited reached Adjusted EBITDA breakeven in Quarter 4 FY25. This achievement has been possible in a short span of time by realizing meaningful synergies through joint sales efforts, enhanced cross selling initiatives and significant operational efficiencies across both direct and indirect costs. Specifically, we optimize direct costs by negotiating better rates and with partners using group level relationships and optimize indirect costs by consolidating certain corporate functions with this strategic acquisition. Our product fleet now covers the complete E commerce lifecycle comprising of first Convertway, an AI enabled marketing automation platform aimed at enhancing conversions and sales performance on Our client website Second UniBair, our flagship platform for post purchase supply chain management trusted by thousands of E commerce businesses to streamline inventory, order and warehouse operations third Shipway, our logistics platform offering one Courier aggregation for clients managing logistics across multiple courier providers via a single platform and 2 shipping automation for clients using their own commercial terms with logistics players but requiring advanced technology to run daily logistics operations.
Together, these platforms create a comprehensive solution covering the full E commerce lifecycle from driving demand to managing operations to handling delivery and returns. We continue to see positive momentum across multiple product lines with a growth in client facilities for uniware, increase in shipments being processed by shipwreck, etc. Turning briefly to our financial results, we have delivered a strong financial performance in quarter four and full FY25. Our consolidated revenue grew by 70.6% year on year in quarter four FY25 to INR 452.7 million, adjusted EBITDA increased by 98.1% to INR 88.8 million and PAC increased by 16.4% to to INR 33.5 million for the full fiscal year FY25 consolidated revenue grew by 30.1% year on year to INR 13.
47.9 million, adjusted EBITDA expanded by 56.3% to INR 283.9 million and SPAT increased by 34.3% to INR 176.2 million. Moving now to industry dynamics, FY25 presented a challenging macroeconomic environment with muted growth across the E commerce sector. This macro pressure impacted our net revenue retention or NRR for Uniware which stood at 103% slightly down from 108% in the previous year. This moderation in NRR closely mirrors broader industry trends. However, we remain highly confident about the fundamental strength and long term growth potential of India’s E commerce landscape. Despite these headwinds, we are proactively executing on multiple initiatives that are within our control to drive both growth and profitability.
First is new client acquisitions. We added more than 125 enterprise clients to Uniware in Quarter 4 FY25 alone, our highest ever quarterly addition. These clients include prominent brands such as Tata1NG, Duroflex, Reed and Taylor and Ethos, along with innovative brands featured on Shark Tank India such as Fey Beauty and Kiwi Kitaar. Second is continued cross selling initiatives. Our initial integration and cross selling Shipway and Convertway has shown encouraging progress in a short period of time. Notable cross platform client expansions include prominent names such as Backit and Currently our client overlap across Uniware and the Chipway Convertway platform is around 10%.
Although modest, this overlap indicates significant headroom for growth through continued strategic cross selling. Next is enhanced product offerings. We continue to innovate across our platform and adding enhancements to increase their revenue potential and introduce the following new use cases. We are enhancing Uniware to support new use cases such as improved B2B workflows tailored for bulk processing, a simplified order management system for clients with limited warehousing needs and adding more good commerce capabilities. We are integrated with all leading Scoop commerce players and have already processed more than 20 million items for quick commerce in FY25.
Kapil Makhija — Chief Executive Officer
For ShipRay, we recently introduced capabilities for.
Kapil Makhija — Chief Executive Officer
Managing shipments under 500 grams, addressing the specific needs of sellers of lightweight products. For convert weight, we have expanded our communication channels by adding Grid communication services or RTS alongside WhatsApp and SMS. Lastly, Unireco, our payment reconciliation platform continues to receive positive feedback and we are on track for its commercial launch by the end of quarter one FY26. In addition, we continue to add AI led enhancements across our platforms to improve client experience. The full integration of Shipway and Convertway into our financial results has also contributed to our strong performance. Simultaneously, we are proactively managing our cost structure by investing in automation, AI driven operational efficiency and productivity initiatives including training.
We are also leveraging AI to drive product enhancements more efficiently, helping us keep our overall fixed cost under control. Looking ahead, our growth will be driven by multiple tailwinds. Firstly, India significantly under penetrated E commerce market which offers immense growth potential. Secondly, a total addressable market exceeding USD 1.15 billion including substantial growth opportunities in courier aggregation via Sipware. Thirdly, continued new client acquisitions across all platforms along with cross selling of our comprehensive product suite to existing and new clients and new use cases and revenue streams introduced through enhancement of our platform as well as continuing growth of our international business.
To summarize, our ongoing investment coupled with our end to end capabilities across Convertway, Uniware and Shipway, a large combined client base of over 7,000 businesses and consistent progress on cross selling strategically position us to reinforce our leadership in the E commerce enablement space and capture new growth opportunities. In less than one year since our listing on the stock market, we have materially increased our scale as a company from free listing scale of approximately 100 crore annualized revenue run rate to approximately 180 crore annualized run rate by the end of FY25. As we head into FY26 we remain focused on disciplined execution, scaling revenues, enhancing efficiencies and driving sustainable and profitable growth.
Now I’d like to invite Anurag Nissal, our CFO to share our financial performance. Over to you Anurag.
Anurag Mittal — Chief Financial Officer
Thank you Kapil Good morning everyone. We are pleased to report strong performance for quarter four and FY25. Let me take you through the highlights of our consolidated financials. Our revenue for Quarter 4 FY25 grew by 70.6% year on year reaching INR 452.7 million compared to INR 265.3 million in Quarter 4 FY24. Our adjusted EBITDA increased to INR 88.8 million in Quarter 4 FY25 a 98.1% year on year growth compared to INRs 44.8 million in Quarter 4 FY24. Adjusted EBITDA margins improved by 271 basis points year on year rising to 19.6% in Quarter 4 FY25 from 16.9% in Quarter 4 FY24 due to benefits of operating leakage.
RPAC increased by 16.4% year on year reaching INR 33.5 million in Quarter 4 FY25 compared to INR 28.8 million in Quarter 4 FY 24. While pads grew at a steady pace, it reflects the impact of amortization of intangible assets worth INR 37.9 million for Quarter 4 FY25 as part of shipwrecked technology acquisition. This is a non cash expense and has no impact on the strong operating performance of the company. Our eps increased by 15.4% year on year rising to INR 0.30 in Q4FY25 from INR 0.26 in quarter four FY24 on a full year FY25. Our revenue increased by 30.1% year on year to INR 1,347.9 million in FY25 compared to 1,035.8 million in FY24.
Our adjusted EBITDA grew by 56.3% year on year reaching INR 283.9 million in FY 25 compared to INR 181.6 million in FY24. Adjusted EBITDA margin improved by 353 basis points year on year standing at 21.1% in FY25 compared to 17.5% in FY24. Our stack increased by 34.3% year on year reachingINR 176.2 million in FY25 compared to INR 131.2 million in FY24. Our EPS increased by 33.9% year on year to INR 01.60 in FY25 compared to INR 1.19 in quarter four FY24. Our cash and bank balance as of 31 March 2025 stood at INR 353 million compared to 690.1 million as of March 31, 2024.
The year on year decrease primarily reflect the cash outflow of approximately -684 million for the strategic acquisition of Shipyard Technology Private Limited. Our net cash flow from operations significantly improved to INR 279.6 million in FY25 from INR 61.7 million in FY24. As Kapil highlighted, the synergy and cross sell opportunity realized post acquisitions enabled shift weight to achieve adjusted ebitda breakeven in quarter four FY25. The integration has progressed well in the short span of time while with meaningful synergies already realized and we look forward to future progress. We have consistently delivered good performance year on year and remain confident about sustaining this momentum.
With continuing support, operating leverage in our uniwear business and incremental growth contributions from Shipway Unicommerce is well positioned to drive profitable and a sustainable growth. Going ahead with this I would now like to open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press the and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will Wait for a moment while the question queue assembles. I may repeat if you wish to ask a question you may press star and 1. A reminder to all participants, if you wish to ask a question you may press star and 1.
We have our first question from the line of Sumit Jain from clsa. Please go ahead.
Sumit Jain
Yeah hi. Thanks for the opportunity and good execution around shipway cost management. So just to first Kapil wanted to ask around your organic growth in the standalone business. I mean if I look at it has just grown at around 3.54% y o y and even if I look at I think the shipment volumes are still fine but I think the pricing has not been improving. So can you just throw some light as to what you are seeing on the ground?
Kapil Makhija
Sure. Thanks Amit I think we had clarified last time as well that our revenue growth typically lacks transaction growth because a lot of transactions get consumed in the minimum guarantee that is given to our new clients and they take some time to fulfill the quota of free transactions that’s given. And we’ve also highlighted that the overall macroeconomic environment is not very encouraging where the overall e commerce growth has been fairly muted. As a result of that, while we cannot really control how the market is shaping up, I think our focus is picking up executing well on the initiatives that are well within our control.
So we continue to acquire a lot of clients. We have had our best client acquisition quarter till date with 125 enterprise clients in our standalone unaware business. We continue to add new product announcements across B2B and quick commerce which are increasingly becoming an important pain point for a lot of our customers. And we continue to leverage our existing base for doing cross sell and upsell I should say.
Sumit Jain
Got it. That’s helpful Kapil. And just to remind I think you have mentioned earlier that your pricing in terms of revenue per item will be around 1.2 to 1.3 rupees. So that still remains the case or can we see some downward pressure in the future?
Kapil Makhija
So Steve, one of the things because I mentioned that the e commerce ecosystem continues to be muted, one of the things that we have done in this quarter is to focus on onboarding high potential enterprise clients and we’ve offered them lower NBS because so that we can where needed to escalate adoption and that is why there is some benefit that we earlier saw where the effective rate of a new customer in the initial six to nine months used to be far higher because they did not utilize the full quota of transactions allocated to them under the MG and the idea was to get these emerging brands so that we can catch them in the early phase of their scale up journey so that we can benefit as an organization.
Then we grow exponentially. So our quarter 4 FY25 rate is about 1.12 but for the full FY continues to be so it’s similar qualpath range that we mentioned and that will.
Sumit Jain
Stay the course in future as well.
Keshan Keshav
Right?
Sumit Jain
I mean that’s what I just wanted to check.
Kapil Makhija
Yeah. In fact we had also mentioned about introduction of the spice escalation clause in our new contract of FY25 which will start taking some effect in the current financial year. However, we are yet to ascertain the impact of this because we would be implementing it for the first time this year. So we foresee it to be in the similar ballpark going forward as well.
Sumit Jain
So that’s very encouraging to hear. And I think you mentioned you saw increase of 125 enterprise clients in univer. So that’s on a sequential basis or on a yoy basis you are mentioning.
Kapil Makhija
125 clients were required only in quarter four of FY25.
Sumit Jain
Okay. Because when I look at your fact sheet there is mention that you had 934 enterprise clients in 3Q and 953 in 4Q. So am I missing something here?
Kapil Makhija
Yeah. So if you look at our so these are new additions into the base. These are new client acquisitions but at the same time because due to the overall market headwinds we continue to see the long tail customers either shutting down or going out of E commerce. So the net increase you don’t see much. But in spite of that we continue to deliver an NRR of 100% plus which is net of churn and our existing customer growth continues to be one of the pillars for our growth.
Sumit Jain
Got it. That’s helpful Kapil. And then moving over to your top 10 client revenues, I mean again we have seen a Y o wide decline there obviously. I mean the contribution is coming down maybe because of the broader growth in the business as well as Shipway acquisition. But can you just also highlight how are you mining your top customers in terms of gaining more wallet share within and the cross sell opportunity you mentioned right through Shipway, are you actually able to do that with your top 10 clients?
Kapil Makhija
Yes. So Sumit, just to clarify, this top 10 contribution for the stand alone business it does not include the chickpea revenue in this our focus as we’ve been mentioning in our earlier calls as well our focus has been consistently over the last three years to diversify our revenue and reduce our dependence on the top 10 clients. And you can see that we are roughly at about approximately 950 enterprise clients. That has taken us nearly seven years to get to this phase. But now we are adding close to 350 to 400 clients every year which means what took us seven years to achieve we’re now able to do it in two, two and a half years.
So the new clients that are getting added their revenue contribution is helping us diversify the contribution of the top 10 customers. At the same time on the question of mining the existing customers as we talked about the strong motion of cross sell that we have been able to put in place. If you recall in the last earnings call we had mentioned that our overlap was less than 5% when we started but now in a very short span of time we’ve been able to increase the overlap to 10% plus. So we continue to mine our existing customers with new products and as Unireco also gets commercially launched by the end of this quarter, we hope to get more and more customers adopt that product as well along with the Chick pay and convert.
Sumit Jain
Got it. That’s very helpful. And one last question, I mean any sort of guidance you are comfortable to share with in FY26 in terms of are you seeing any improvement in the overall E commerce market and within that are you able to gain market share? So any comment would be helpful given that we don’t get too much of industry data points out there.
Kapil Makhija
Yeah I think Sumit, the FY26 has just started so I think it will be too early for us to comment whether there is a turnaround or the growth will improve. Like I mentioned in the beginning part of the call that we are very positive about the long term prospects of E commerce growth so we still stand by that. I think as a company our growth will be driven by our ability to sustain market cluster performance through driving 100% plus NRR through existing clients, our continued momentum in new client acquisitions and the expanding scale of new products including Shipway, Convertway and Unireco.
As these platforms grow organically and benefit from the process synergies, we expect to maintain a positive growth trajectory for the company through FY20.
Sumit Jain
Got it. That’s very helpful and all the best to the team.
Kapil Makhija
Thank you.
operator
Thank you. We have our next question from the line of Arvind Arora from A Square Capital. Please go ahead.
Arvind
Congratulations Kapil and Anugad and your whole team for good set of Numbers. So my question is mainly on the acquisition part. So could you please give me revenue breakup of fifth way and Convertway products and billing model also. And is there any change in the billing model after the acquisition?
Kapil Makhija
So we are not publishing the product level revenues for business sensitivity reasons. But as we had mentioned at the time of acquisition that Courier Aggregation is the largest part of the business. It contributes about 85% of the overall business. Our revenue from Courier Aggregation continues to be in similar ballpark.
Arvind
Okay, and is there any change in the billing model for since we are seeing it’s a strategic acquisition and we see this as a one stop solution. Okay, so when we are having negotiations with the clients, are we offering a bundle of service like altogether or how it is.
Kapil Makhija
See, there is no fundamental change in the billing model. All our products are built on the transaction. So in uniware it’s the item shipped from the warehouse and separate the sequence that are going out and then convert with external notifications. But yet, as we now bundle these products together, there are some benefits that we pass on to our customers. So it helps them one ensure that they are able to get an end to end offering under a single umbrella. Two, it helps them ensure that the overall total cost of ownership for the brand also goes down as they can get everything under a single umbrella.
Arvind
Is it like a free of cost that we are passing on Convertway or we are charging something.
Kapil Makhija
Sorry, could you please repeat that question?
Arvind
Is it like we are charging something for Convertway product or it’s a like a complementary service?
Kapil Makhija
No, no. None of our products are complementary. We charge for all our products. But we ensure that if a bundle is opted and today when a sales team is approaching a new brand, they take the full bouquet of solutions to them and the customers can pick and choose whether they want the end to end solution or a point solution that flexibility is available to the brand.
Arvind
Thank you. And my second question is I have something new that we are also planning to acquire. More companies like to enhance our footprint in one stop solution.
Keshan Keshav
So could you.
Arvind
Is it like true or can you please throw some light on these parts? Are we planning for any acquisition something like that?
Kapil Makhija
Our vision is to become a one stop shop for E Commerce enablement. Our acquisition of Shipsay was also in line with that vision. We as a company continue to look at the white spaces that are existing today in the E commerce and equivalent space. And we continue to identify solutions that we can offer to the market depending on the white space and the opportunity. There is a detailed internal assessment that’s done to decide whether we need to build it internally or we look at a solution that’s available in the market. So I think at this point I can only share that there is an active discussion that continues to happen in various potential white spaces that we keep exploring and we continue to explore solutions that are available.
But right now it’s at a very preliminary stage for me to be able to share any details. But we will continue to fulfill our vision of becoming a one stop shop of E commerce enablement.
Arvind
Understood. Okay, and the next question is on it Expense. I can read it. We are still not Billy to the. To the investor. Any specific reason for that?
Kapil Makhija
We could not understand the question. Could you please repeat it?
Arvind
So there was an IPO expense that due to OFS last year we were charged it to the client like investor who has held who has sold their share. Am I audible?
Kapil Makhija
So the IPO expenses which we have incurred for the purpose of the IPO process was solely borne by the semi shareholders. The total spends we have done for the IPO purpose is around 30 crore rupee. And the provision what we have created is for those activities and those invoices which has not been received. But whenever these are received, these will be cost charged to the selling shareholders.
Kapil Makhija
And recovered from there.
Arvind
Okay, Understood.
Kapil Makhija
So is it like it’s been more.
Arvind
Than six months we have not received invoices from vendor it?
Kapil Makhija
Yeah, certain invoices have not been received from the vendor. That is the reason the provision of staying in the financial that is in the tune of near about 35 million.
Arvind
Okay.
Kapil Makhija
Okay.
Arvind
Thank you sir. That’s all from my side.
operator
Thank you. We have a next question from the line of Jealous from Swan Investments. Please go ahead.
Jealous
Hello.
Kapil Makhija
Hello.
Jealous
Yeah, thanks for the opportunity. Just wanted to understand a few things. On a standalone basis the Y numbers look flat richer at a 3% size. So. And. And the consolidated numbers show the growth rate of almost 70%. So the gap between is completely from shift first of all. Is that so? And what has Exactly. So you partially alluded to it that there is some sort of slowdown. Exactly. In the uni commercial. In the. In the E commerce business. What. What exactly is happening? Could you throw a little more light on that?
Kapil Makhija
So if you recall the universe standalone business the growth is driven by multiple factors. One is the market growth because our revenue is linked to the number of transactions. The second is new bank that we acquire. And third is the new product revenue that we come in. If you look at our revenue growth last year we had achieved 15% revenue growth and this year approximately 10% revenue growth. The decline of 5% is largely because of the market growth which is reflected in our NRR net revenue retention. Our NRR for FY24 was 108% and NRR for FY25 is 103%.
So that explains the high percent gap on your specific question of quarter four being muted. That’s largely a result of the overall market not growing very strongly. And as I mentioned before that is honestly something that we cannot control. What’s in our control is executing on continuing to acquire new clients and we had the best quarter till date in terms of new acquisitions and we continue to focus on enhancing our product to solve meaningful pain points in the ecosystem.
Jealous
I appreciate that perspective. What would consider and secondly was this this if I were to calculate the number of items being processed and and taking it along with the revenue. So ideally going forward we should look these this as purely from a standalone basis only and not on the consolidated numbers. Basically the revenue per transaction, the number of 1.12 you mentioned for this quarter ID that should be taken forward only on the standalone numbers.
Kapil Makhija
Yes, that’s correct. So the standalone business is pegged on the number of transactions and similarly the other product lines are also pegged on their respective matrices which we publish as part of our investor earnings presentation.
Jealous
Got it. So maybe I would have missed it. So could you talk a little about what would be the revenue model for ships with and how should we understand that?
Kapil Makhija
So the shipway revenue is linked to the number of the shipway technology. Private limited business has got two product lines. One is Shipway which has a courier aggregation and shipping automation. And second is Convertwill which is a AI led marketing automation platform. Courier aggregation is the largest part of the business that contributes in the ballpark range of 85% of the overall revenues. The courier aggregation business operates in a large market of nearly 4,000 crore. And here the revenue is linked to the number of shipments being processed on the platform. The ballpark revenue realization is about 70 to 80 rupees per shipment.
So as we continue to publish the number of shipments on a quarterly basis you can ascertain the revenue trajectory or the revenue per shipment trajectory which is that understood?
Jealous
Understood. Thanks for that. And I think there’s a jump in the other expenses this quarter. What would be the reason for that? But sequentially and year on year. Hello?
Kapil Makhija
Sorry, I was on mute.
Kapil Makhija
The other expenses maybe consolidated financials has increased because of the shipwreck expenses being also added in the overall expenses that is the reason the expenses have been increased. In fact, if we see the numbers the the overall amount of 160 million pertaining to the shipways other expenses have been consolidated in FY25 post acquisition that was actually not there in the financials of FY24. That is largely the reason for the increase in the other expenses largely in the year.
Jealous
Got it. So it’s fair to assume that the other expenses would be in the similar range going forward. Got it. Got it. Understood. Thanks a lot and best of luck.
Kapil Makhija
One point. I want to clarify here that consolidation started happening from from 17th of December 2025. So next quarter quarter one FY20 will not be comparable with quarter one FY25.
Kapil Makhija
But other expenses will be in the same ballpark.
Jealous
Thank you.
operator
Thank you. We have our next question from the line of Keshan Keshav from Nivisha Investments. Please go ahead.
Keshan Keshav
Thanks for the opportunity and congrats on the set of numbers. So I’m quite new to the company. So I can see like your company EBITDA margins are strong compared to the other peers. So your other expenses appear relatively low. But could you provide some clarity on.
Kapil Makhija
Sorry, the voice is coming very muffled. You’re not able to hear you clearly.
Keshan Keshav
Yeah. Am I audible now?
Kapil Makhija
Yeah, it’s much better.
Keshan Keshav
Yeah. So I can see that your company maintains a strong EBITDA margin compared to the peers and your other appears relatively low. Like could you please provide some clarity on this? Like are these efficiency primarily driven by low marketing spends or other cost optimization?
Kapil Makhija
So the Uniware business, which is a flagship platform, has significant operating leverage where a large portion of our revenue growth flows to our bottom line. Besides driving a consistent revenue growth through new acquisitions and growth of our existing clients, we have as a management team have tried to keep cost in control. Because if you look at Univer, which is a flagship platform, a lot of investments have gone in FY21 and FY22 in building the platform and now the platform is largely stable. We don’t foresee any incremental investment into the business besides the BAU investments because of the evolving E commerce landscape.
For example, as good commerce became an important contributor in certain categories, we have built enhancements to our goodcommerce offering. So since we don’t see a lot of investments going into the core platform, that is why the business inherently provides a significant operating leverage. At the same time, we have been able to leverage AI to drive our business efficiently in terms of getting productivity enhancements, training our team and the customers. And we also leverage AI to do product enhancements to be able to do these product enhancements in a much faster pace and with a much leaner team than we used to do before.
I think a combination of these we are not under investing in sales and marketing as you can see that we’ve had our best quarter till date in last quarter where we acquired 125 enterprise clients in Univer and hence a lot of these efficiencies are coming through. 1 stabilization of the platform 2 a constant focus in being able to leverage AI to drive productivity enhancements within the team.
Keshan Keshav
Another part like is the ship business.
Kapil Makhija
Directly comparable to Shiprocket or is it slightly different?
Kapil Makhija
See as I mentioned that the courier aggregation forms a large portion of the revenue. There are multiple players in the in the space which ships a company check. Profit is one of those players.
Keshan Keshav
Thank you. That answers my question. Thank you so much.
operator
Thank you. We have our next question from the line of Sonal Minaz from Decent Capital Advisors. Please go ahead.
Keshan Keshav
Hi, this is Sonal Minaz. I hope I’m audible.
Kapil Makhija
Yes, you’re audible.
Keshan Keshav
Okay, thanks for taking my question. I’m Kapil and instead of Manoj Wanted to understand I see your top 10 customer percentage share falling. Maybe it is a function of you adding more customers at the bottom of the pyramid. But just wanted to understand, in the last one year has there been a churn in the top 10 customers? I just consider FY25, that’s one. And if yes, you could share some subjective feedback on why they have left and if at all there’s anything to be there.
Kapil Makhija
Sure. See Univer as a platform. And I’m assuming the question is about the standalone business.
Keshan Keshav
Yes.
Kapil Makhija
Univer as a platform is extremely sticky. Once a brand adopts Univer platform, it is essentially a marriage for life. You effectively become ERP for their E Commerce operations and you rarely see a brand replacing their erp. So you can see our average lifetime continues to increase every year and that is why very rarely have we seen a large customer churning from our platform. And the answer to your question about churn in FY25amongst top 10 customers? The answer is no. We’ve had Churn in the top 10 customers in the past. But the main reason for churn has largely been that customers going out of business because E commerce is a volatile industry.
And that’s actually bulk of the reason for churn where the customer either goes out of business as in shutting down or they go out of E commerce. That’s mainly the reason. And we don’t see much of that happening amongst our top customers.
Keshan Keshav
Got it Kapil, a follow up question there. Kapil, just wanted to understand, I think you explained this well in the last discussion as well that there’s not much of a build required in terms of the Uniware platform and hence there may be some operating leverage that you would see in terms of people costs there as well. But traditionally have you seen such similar businesses, such SaaS models not investing in their platform or people or tech over a one or two year period because there may be competition coming from the other side. So just want to understand is that a real sustainable thing or that’s like a small tactical edge that you might see for one year and then you have to people resources going further over the next three, four years.
Kapil Makhija
Sure. As I mentioned before that at no point of time we are under investing in the business neither in terms of sales and marketing nor in terms of product development. We continue to ship out a lot of upgrades to our product. I mentioned that in FY21 and 22 it was a major overhaul of the platform to make sure that we are ready for the acceleration that we’ve seen during the pandemic. We continue to ship out upgrades to our platform. For example, I talked about quick commerce upgrade as quick commerce is becoming a meaningful channel for many categories.
We have seen brands becoming omnichannel and hence we are seeing requirements of managing their B2B part of the business which is let’s say their shipments to modern trade or shipments to let’s say their own store fulfillment. So we continue to upgrade our platform to be able to offer this innovation is at the core of our business. If we do not innovate as a company, I think the market is fairly competitive and there will be new competition that’s coming and that’s why today we are leveraging AI to make sure that we are able to do things a lot more efficiently than we did in the past and we are able to ship out many of these upgrades in a much shorter span of time and hence we don’t foresee as much team size or as much team costs that we had probably incurred in the early part of our journey as the platform has become stable now.
Keshan Keshav
Got it.
operator
Thank you. We have our next question from the line of Sahil Doshi from Thinkwise. Please go ahead.
Sahil Doshi
Hi, good morning and congratulations to the team for the successful shipwreck integration. Just a couple of my questions relates to one just wanted to understand like what I have amortized 3.8 crores related to shipwreck this quarter. So could you just talk about the entire goodwill which has come in. How should we think about it going forward? And what could be the recurring impairment slash amortization related to this?
Kapil Makhija
Could you elaborate what do you mean by what kind of business has come in due to amortization?
Sahil Doshi
No, I meant the 3.8 crore worth of amortization which you’ve taken related to the acquisition incrementally. What do we think about it? Because I think there’s a goodwill of foundry in Karoda book right now. So how should we think about this going forward?
Kapil Makhija
So Sahil, the increasing classification and amortization in quarter 4 FY25 is largely because of the amortization of intangible assets recognized as a part of our shifted technology equipment acquisition. And these are primarily the non cash accounting adjustment. And we continue to do so over the period of next three years. And that will be and this is actually in the line of applicable accounting standards. As you know, when we do the accounting of these acquisitions, these particularly the business acquisitions we have to split the overall value of acquisitions into different assets acquired from the equity company.
So that is the reason we have capitalized the value of overall investment into different intangibles as well as the goodwill in the books of accounts. And those assets which have been capitalized will be amortized over a period of.
Kapil Makhija
Three years on a consistent basis.
Sahil Doshi
Okay, so if I understand correctly, the 118 crore goodwill will be amortized over three years. Is that the right way to read this?
Kapil Makhija
No, no, no, no. So business will not get amortized. It’s the value of investments particularly in fact near about 40 crore of the assets has been recognized as an intangible in the consolidated financials. This 40 crore will get amortized over a period of three years in the financial.
Kapil Makhija
Perfect.
Sahil Doshi
This explains and just if I see the derived number of the shareholders business detailed expense for this quarter is around 18 crore excluding the employee cost. So is there a one time cost related to acquisition built up here or will take the steady state total expense? And how should we think about these cost line items for ship pay going forward so far?
Kapil Makhija
In fact the overall expenses actually include the operational expenses of ship pay technology in this quarter four epidural and lastly our other expenses are inconsistent with the previous quarter itself. And overall in the future also these numbers will be on the similar ranges going forward.
Sahil Doshi
This is similar. Just wanted to understand where is the lever for operating leverage. The idea was to understand that.
Kapil Makhija
Sure. See the large part of operating leverage will come from the univer business which is largely stable shipway as a business and as a product line is on its growth trajectory. So while there are possibilities of us generating profits in the business, but one of the strategic calls that we have taken is that we continue to reinvest profits for growth in chiptrace and convert it so this business will largely operate at a break. Even a large part of our profit growth and large part of our profit growth will come from anywhere because of the inherent operating leverage in the business.
Sahil Doshi
And just lastly on the core business, one of the previous questions, you did mention that you know the pricing element is not coming in because of the minimum guarantee. Could you quantify that? Because it’s been, you know, since the time of listing we’ve really never seen the pricing momentum actually come through. So how long are these duration of these minimum guarantee contracts and shouldn’t this be a regular feature because every quarter you will add new clients and they will all be under minimum guarantee so the pricing will always remain under pressure. Is that the right way to read through?
Kapil Makhija
Shaheen? I think like I mentioned that what has taken us seven plus years to build in terms of the enterprise client base we are now able to do in two, two and a half years as we continue to be aggressive in the new plant acquisition. Because I think we just scratched the surface as far as E commerce enablement is concerned. There are so many businesses that are yet to get online that are yet to get on the dropship model where they will feel the need of a software provider like ours. So we don’t foresee the client acquisition slowing down at any point of time.
And as we continue to acquire more and more clients, it is the inherent nature of the business where the new clients take about six to nine months for them to fully utilize the minimum quota that’s allotted to them as part of the eng. As this motion continues, I think we will continue to see similar trajectory because our intent as a business is to drive consistent growth in revenues and profits which will come from both growth of our existing clients as well as new clients that we continue to acquire besides adding new products generating new revenue lines for us.
Sahil Doshi
Okay, understood. And just operational that our and also on the E commerce side we are hearing players talk about going to an inventory LED model. Do we see the entire TAM is reducing the holdings for us or what are your thoughts on this?
Kapil Makhija
Sure Sahil, I could not hear the first part of the question. I’ll address the TAM reducing or increasing but could you please repeat the first part of the question?
Sahil Doshi
No, the first part was we are seeing the E commerce transactions, the pace of growth reviews and second we have seen a shift where again we are talking about the inventory LED model. So my question was the hour operating tan is it that it’s getting lesser or diminishing day by day basis or how do we think about this?
Kapil Makhija
Sure. Let me address the second part of the question. The dropship model is a fairly recent phenomenon which started to pick up during the pandemic. If you look at pre pandemic dropship model as a percentage of overall E commerce business was in early double digits and today it’s nearly half of the market, it’s expected to grow even further and that’s the trend we are seeing. I’m not sure on basis what report are you saying that the inventory model is increasing. In fact if you look at quick commerce it started out as an inventory led model as how E commerce started a decade ago as an inventory led model and today we see leading good commerce platforms now launching multiple models and how the horizontal marketplaces have launched.
So we are in fact seeing the food commerce businesses also getting into the services model and operating with multiple models which means that there is increased complexity for brands to be able to not only manage multiple channels but also manage multiple variants of each channel. And hence the need of our technology solution like us is increasing every quarter as the complexity in the ecosystem is increasing. And on the first part of the question, sure the E commerce market growth was muted in this year but as I mentioned we are fundamentally aligned to the long term prospects of the E commerce group.
I think we fundamentally believe that E commerce is fairly under penetrated in the market and as more and more customers in the country continue to get comfortable with shopping online, we will see a higher penetration of E commerce going forward. So the long term prospects of E commerce still continue to be intact. But yes, in the short term we do see some headwinds currently.
Sahil Doshi
Sure. Thank you so much. Thank you so much and best wishes.
operator
Thank you. We have our next question from the line of Rajvi Poladia from Soham Asset Managers. Please go ahead.
Rajvi Poladia
Hello sir, am I audible?
Kapil Makhija
Yes, you’re audible.
Rajvi Poladia
Yeah. Hi sir. I basically had was looking to the CNN of your company and there were few adjustments that were made in the PNL such as you know, capitalization of employee cost and there were some bonus reversals. So assuming you know last time when you had capitalized the employee, I think that was in 2014 and very recently you have done that for your product development thing. So I’M just assuming if I reverse those, I do not see the pat growth as much as it is shown.
Kapil Makhija
So.
Rajvi Poladia
So can you guide us as to how can we going forward? How can we account for those expenses into FY26?
Kapil Makhija
So Rajiv, to your question, the capitalization that we undertook was for the new products. A large portion of our revenues came from our existing products. So the pack growth that you see is a true reflection of the business. And as our products are gaining maturity we are fully we plan to fully expense these new products going forward which has been consistent with our accounting philosophy since the company started for example unireco. We had capitalized during the year as we were building the product. We are on track to launch it by the end of quarter one FY26 and from this quarter itself we will be fully expensing the Unireco product.
And this is the same philosophy we follow all across. On your question of employee expenses you would see that this year there are no reversals and the capitalized extent is also lower. So these are now steady state employee cost numbers that you see because of the efficiencies that we have built into the system. One we have realigned our investments which is the business needs plus we are now leveraging AI to a great degree to ensure that we can drive productivity enhancements within the team.
Sumit Jain
Rajiv, in addition to what Kapil also explained, I also want to reiterate that this manpower cost relates to the product development have been capitalized under Intangible Asset development near about 6.3 crore for FY25 which includes 0.4 crore 40 lakhs in this quarter 4 FY25 as of now all our revenue comes from our existing product suite as Kapil also mentioned. Hence for the purpose of adjusted ebitda only cost related to the current products are considered and the capitalized development expenses do not distort the operating profitability. Once the new products are launched, commercially related operating costs will begin reflecting in the profit and loss account which may have a marginal impact on the margins but not significantly.
Rajvi Poladia
Sure. And one more point Rajiv on the capitalization I want to add is that during FY25 the company capitalized development for Uniship and Unireco. Uniship has since been transferred to Shipfreight. Given its strategic alignment with shipwreight business particularly particularly to enhance its enterprise grade offerings, Ship pay will continue investing in unicip to take it to its terminal development state and hence there may be some capitalization related to that but in FY26, sir.
Kapil Makhija
Okay, okay.
Rajvi Poladia
So I was just going through the absolute amount for the employee cost. So you know, for FY24 it was 612 million and FY25,592. Even if I exclude those one time thing, that adjustment that you had made, it was 607 million. So on absolute basis also you actually see the employee cost going down irrespective of the adjustments that you made.
Kapil Makhija
Yes, yes, that we see the employee costs going down and we see that the number that you see in quarter 4, we will continue to be in similar ballpark of that going forward as well.
Rajvi Poladia
Okay, sir, that was helpful. Thank you.
operator
Thank you. We have our next question from the line of Darshul Zaveri from Crown Capital. Please go ahead.
Darshul Zaveri
Hello. Hello. Good morning, sir. Firstly, congratulations on a great set of numbers, sir. Hope I’m audible.
Kapil Makhija
Hello. Yeah, you’re audible. Thanks for your mission.
Darshul Zaveri
Yeah. Hi sir. So sir, I just wanted to, you know, I understand a lot of my questions have been answered. So just still wanted to ask a bit about how do we reapply 26 planning? So when we say that we have like, you know, net, you know, annual recurring revenue of 181,1 million. So is that a fair assumption that, you know, FY26 growth should be higher than that? Only because that’s what we’ve done in Q4 in terms of revenue. Is that the right way to look at it, sir?
Kapil Makhija
Sorry, voice is now coming a bit muffled. If I understood your question correctly, you’re saying that we’re at a revenue run rate of 180 crores. So we will be able to deliver revenue higher than that. Is that correct?
Darshul Zaveri
Yeah, yeah. Yes. So. Yes, sir.
Kapil Makhija
Yeah, that’s correct. So we enter FY26 at a revenue run rate of approximately 180 crore. Our hope is to deliver a revenue higher than that in FY20.
Darshul Zaveri
Perfect. Perfect, sir. And I just wanted to, you know, harp a bit about the cost as we, I think we saying our employee and other expenses should remain at the current level that you. We saw in S5 by. So in Q4. Right. So. So that would be a new run rate, right?
Kapil Makhija
Yes, would be in the similar.
Darshul Zaveri
Okay, okay, fair enough. And the heightened depreciation, we were saying that there is like a 40 crore amortization that we’re going to do over three years. Right. So, so that would, you know, so that would mean like we’d have a significantly high depreciation going forward. Right.
Kapil Makhija
But that will be amortized over a period of three years, 36 months.
Darshul Zaveri
Yeah, but then. So even if it’s over 36 months or. But then I think 40 crores means that around yearly it will be around 13 crores. Right. That we’re going to amortize. Right. Many other. Because then our depreciation last FY24 was around 2.4 crores. This year it’s around 7.2. And now in addition of this we’ll have another 13 columns.
Kapil Makhija
Right?
Kapil Makhija
Yeah, that’s true. That that is as per the accounting standard regulations only.
Darshul Zaveri
Yeah, fair enough. Yeah. That we can’t control that. So I just wanted to know that. Because that will even it being a non testable impact overall. Right. So also wanted to know like maybe next year onwards, just like our key metrics for our goals, we should be focusing on our shipments and transactions. Right. Because that would be giving us the perfect material how the business is doing rather than seeing bad.
Kapil Makhija
Right, exactly. Our revenue growth is driven by the number of transactions or number of shipments. That’s a good metric for you to track to see the performance of the business.
Darshul Zaveri
Okay.
Jealous
Okay.
Darshul Zaveri
And so just like last question from my end. So we don’t see any like as you said a per transaction cost I think is around 1.12 that you said to Q4. So that rate will be. That can be constant for FY26. We don’t see any downward trend in that rate. Right.
Kapil Makhija
So yeah. So over the years we’ve seen this number to be in a similar ballpark range. So I think our hope is that will continue to be in a similar ballpar range going forward.
Darshul Zaveri
Okay. Okay. Fair. Fair enough. Yeah, that’s it from my side. So thank you.
operator
Thank you ladies and gentlemen. Due to time constraint that would be the last question for today and I now hand the conference over to the management for closing comments. Over to you sir.
Kapil Makhija
Thank you everyone for joining the call today. We hope we have been able to address your queries. Should you have any further queries or clarifications, please feel free to reach out to us Strategic Growth Advisor or Investor Relations Advisors. Thank you and have a good day.
operator
Thank you. On behalf of unicommerce Esolutions limited That concludes this conference. Thank you for joining us and you may now disconnect your lines.