Vertoz Advertising Ltd (NSE: VERTOZ) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Hiren Shah — Founder and Managing Director
Analysts:
Sanjeev Zarbade — Analyst
Kashish — Analyst
Harsh Vora — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY25 conference call of Virtos Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity to ask questions after the presentation concludes. If you require assistance during the conference call, please signal an operator by pressing star followed by zero on your touch tone phone.
Please note that this conference call may contain forward looking statements about the company based on the beliefs, opinions and expectations of the management as of the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.
Joining us today from the management is Mr. Hiren Kumar Shah, Promoter and Managing Director. We will commence the call with Mr. Hiren Kumar Shah taking you through the operational and financial performance for the third quarter and nine months ended December 31, 2024. Following this, we will open the forum for Q and A.
\With that said, I now hand the conference over to Mr. Hiren Kumar Shah, Promoter and Managing Director for his opening remarks. Thank you. And over to you sir.Thank you and good evening everyone. I would like to extend a Warm welcome to Wotos earning conference call for the third quarter and nine months ended financial year 25. Thank you all for taking the time to join us. I.
Hiren Shah — Founder and Managing Director
I’m happy to share that our latest results reflects a remarkable quarter growth in Key Financial across all our businesses. Before delivering into our quarterly performance, I would like to provide a brief overview for company Significant growth has been observed and projected in both domestic and incremental international market.
Virtos is a new Edge Tech leading AI driven MacTech and Cloud Tech company operating across domestic and international market. Our two large segment of revenue are Mactec and Cloudtech which are further divided into B2B and P2B. Performance Highlights for the third quarter ended December 31, 2024 Revenue for the quarter was 66.20 crore in quarter three financial at 25 compared to 55.23 crores in quarter three of financial at 24 registering a growth of 19.86%.
EBITDA stood at 8.28 crore in quarter three financial 25 as compared to 6.05 in Q3FY24 growing up by 36.86%. PAT stood at 7.35 crore in Q3 financial year 25 compared to 4.51 crore in quarter three financial 24 up by 62.97%. Revenue for the nine months was rupees Bahuan’s Highlights for the nine months ended December 31, 2024 Revenue for The nine months was 190.02 crore in nine months financial year 25 compared to rupees 126.80 crore in nine months financial 24 registering a growth of 49.86%. EBITDA stood At 24.4 crore in N month financial as compared to 16.57 crore in nine month financial 24 growing up by 45.08%.
PAT stood At 19.64 crore in nine months financial year 25 Compared to 13.18 crore in nine months financial 24 up by 49.01%. Operational Highlights Contribution from Mavtech and Cloudtech is approximately 80% and 20% respectively. 80% of business is international while 20% business is domestic. Expanded our geographic footprint by opening branch in Pune expecting the company’s revenue to grow at 30% for financial at 25. 26. Revenue of the company have been growing at 27% and profit at 17% for the last five years.
Successfully executed campaigns for top tier media agencies and corporate particularly in bssi, real estate, hospitality and private sectors. We are very confident that we will continue to do well on the organic growth front, expanding geographically and assuring all our investors that we are looking forward tentatively of achieving rupees 250 crore revenue for the current year with around with around 10% of PAT margin financial at 25. Given the economic policies of the newly elected U.S. administration and their make the Country Great campaign, we anticipate increased spending and economic expansion which aligns well with our business strategy. Both our business segments Madtech and Cloudtech are directly influenced by economic growth in industries such as bfsi, travel and real estate and financial services and startup fundraising as the spending on brands, travel and financial products are the major contributors of growth drivers for our businesses. Having said that, India is coming up very well on this front as number of new startups raising funds to build their brand across the segment. Real estate on the other hand is also doing well besides travel has been very strong for the last five years. The allocation of advertising spends towards digital and programmatic advertising for awareness and lead generation conversion is increasing in the overall pie of advertising and growing the expense of print and television. The adoption of OH and connected TV CTV advertising is also raising rapidly doh. Digital out of form advertising is also becoming the standard while CTV transforming the how audiences consume content on OTT platforms. We are on a journey of reaching around 100 crore profit after tax in the next three financial years through the both organic and inorganic growth. We will make the investments required for achieving this growth and we have already recruited right team for this journey. Adtech market is Globally growing at 13.7% whereas MedTech market is growing even faster at 19.8%. Besides, Cloud Computing is growing at 14.1% whereas Domain Industry growing at 8%. The rates are better than any industry standard and gives us enough heads room for our growth. Rising focus on our personalized marketing and AI analytics, Video ads and interactive content on the platforms like YouTube, Instagram, TikTok, IMRC are driving our campaign growth both domestically and international market. Over to you ma’am.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. To ask a question please press Star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and two Participants are requested to use handsets while asking a question.
Ladies and gentlemen, we will wait for a moment while the question queue assembles.We have a first question from the line of Sanjeev Zarbade from Dreamladder Investment Advisors. Please go ahead.
Sanjeev Zarbade
Yeah sir, my first question is regarding the outlook for margin expansion. Is there any scope you see for further expansion in the margin?
Hiren Shah
Hello Sanjeev Ji. Nice talking to you. So if we look at overall our current focus is to see that how we able to grab the more market share. But definitely we have a specific internal guidelines to do not go for the EBITDA and PAT percentage. But at this point our major focus is to do how do we expand ourselves heavily in the market.
And we are investing a lot on the people geographical expansions and many other things. So but definitely the moment we start getting that gear of that particular thing because of the multiple products which we have that will help us in adding more Arpu. And that is the reason why overall margin will grow. But at this moment, if you look at our EBITDA ranges between 12 to 15% and PAT is what internal guidelines what we have that we should have between 8 to 12% range.
As you can see in the last quarter we did roughly around 10%. Okay. And what will be the growth strategy in cloud business? So cloud business, if you look at the worldwide, you know, I mean there are a lot of awareness and lot of expectations that happening from individual enterprises as well as the government side specifically related to data. Right. So that is the reason why there are a lot of requirement of cloud is going to happen.
Obviously AI is in another push to that. So because for the AI also required a huge amount of web infrastructure to execute the same thing. So there is a lot of demand. We are also expecting on that and we feel that there’s a great scope over here to achieve good growth. Market is roughly $2 trillion globally like market opportunity. Sorry, you’re saying something?
Sanjeev Zarbade
Yeah. Last question was regarding any other market you see apart from US market where you can, you know, kind of target growth.
Hiren Shah
Correct. So currently if you look at the overall, India and the US is two major market which we are focusing the third market we started with the MENA region. Fourth is we already have started our setting up initial footprint at UK market to cover the UK and the Euro. And we did some setup in the HK to cater the, you know, Southeast Asia market and China market. But those are in pipeline. The soon, you know, we’ll start keep announcing that as soon as we are ready with the further expansion on those places.
Sanjeev Zarbade
Okay, that’s it from my side and thanks for answering questions.
Hiren Shah
Thank you. Thank you so much.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press star N1 on your phone. We’ll take our next question from the line of Kashish, an individual investor. Please go ahead.
Kashish
Hi, good evening, sir.
Hiren Shah
Good evening.
Kashish
My question. Yeah, sir, my question is the company valuation has highly worsened in the past few days, which is highly concerning for the indigenous investors despite we all know the market is going through a bad phase, but are we Confident that the things would improve in the coming days despite the change in the government regime from the US
Hiren Shah
I’m sorry, can you repeat, is there any.
Operator
Can you use your handset mode please and repeat your question?
Kashish
Hello, am I clear now?
Hiren Shah
Yeah, a little bit. Please go ahead.
Kashish
Yes sir. I was saying the valuations of the company has worsened in quite in the last few days. So which is highly concerning for the individual investors. Moreover, there is a change in the government regime for the US which is our major contributor. As you said, 80% revenues come from us, right?
Hiren Shah
Correct.
Kashish
How do we see ourselves being positioned in the change in the regime of the government and are we confident that things would improve in the coming days?
Hiren Shah
Sure. So first of all I would like to clear here that over 80% businesses outside India, which is international business. This is this include definitely US business significantly. But we are not only at only in the US but our business is also spread across, across the globe, number one.
Number two, if you look at the current US administration which has got changed. They have their first country is kind of their. I mean they are more focusing on internal businesses more. If you look at our business model is more about advertising or providing a platform. So we help each enterprises to grow further.
So definitely this is going to help us to grow further instead of we are seeing any negative on this part.
Kashish
What is the contribution from the cloud tech and the Mattech business? Is it the 5050 contribution coming from both the business?
Hiren Shah
No, no. So I just mentioned few minutes back it’s around 70 to 80% on the map tech side and 20 to 30% roughly on the cloud tech side.
Kashish
Okay, the cloud is 70, 30%. One the last question. Is there any plans of the dividend payouts and the improvement in the book value of the company? Because the book value is really low and then there is no dividend payout in the past few years. In fact are we focusing on the that part also in the interest of the individual investors?
Hiren Shah
Perfect. Thank you so much for this question and I really appreciate this. So basically if you look at the company has shown, if you look at the last three years data, you know we have grown and we’ve given roughly 90, 80 to 90% growth year on year. So our focus right now is to see that whatever maximum money which you can deploy and the reserve which you can deploy to grow the further company. That is what is our requirement. See if you look at the market size, India itself is roughly 50,000 crore market of digital media last year and this year is going to be around 69,000 to 70,000 crore. And globally it is roughly $4 trillion MadTech and $2 trillion Cloud Tech. So we expect there is a lot of growth space available. So at this point our focus is to grow further internally whichever way we can grow. That is the reason we have not yet started. But yeah, as soon as the board decides and anything comes up on that, we’ll definitely start working towards what is your requirement?
Kashish
The book value is really low. I mean, that’s really concerning. Is there any particular reason the book value has been kept so low for the shares, for the equity?
Hiren Shah
I. I didn’t get you.
Kashish
The book value. I said the book value is on the lower side. I mean the. In the accountings of the book, the book value of the company has been kept on a very lower side. Is there any reason for this or it’s just no as well?
Hiren Shah
There is no reason for that.
Kashish
There’s no reason.
Hiren Shah
No, no, no.
Kashish
All right.
Hiren Shah
If you still have any specific question, I can have my IR team get back to you on this.
Kashish
Right, right. Thank you. Thank you so much.
Operator
Ladies and gentlemen. To ask a question, please press star and one on your phone. We’ll take our next question from the line of Harsh Vora from Diachoksi Finser Private Limited. Please go ahead.
Harsh Vora
Yeah, hi sir. Good. Good evening. Am I audible?
Hiren Shah
Yes, that’s right. And here are the audible screen.
Harsh Vora
Yeah, yeah. Hi sir. So I have a list of questions starting with the first. If you could throw some light on the campaign performance metrics. If you can provide insights into the number of campaigns executed during the year and the key performance trends that you must have observed specifically with regards to the domestic business, the kind of agencies you’re working with and the brands etc, etc.
Hiren Shah
Sure, sure, sure. So first of all we have a different businesses, different platforms under Virtos. I hope you’ve seen those like six platforms major platform which will list on our websites as well. And we keep working with various different brands. Either it is a P2Pmodel or B2B model. P2P is a partner to partner and then for the business and B2B is directly to business.
So if I take example of any mutual fund company with a customer of an agency and agencies are customer. So now that agency when we do business with agency that is called as a P2P business model and then P2P partner has a further maybe 10 mutual funds and maybe one mutual fund, one bank, one another NBFC or anything as a customer and they’re serving that and then they further giving it to us that is one model and second model is definitely a B2B where we are directly working with those mutual funds and helping them to grow their brands globally. So our business model is specifically designed in two of these things.
Now, when it comes to a marquee customer, so we, I mean, when you talk about the agencies in India, so we work really closely with WPP Group, Dentsu Group and many other publications, Medicine, they’re all top agencies. And we keep working with them on a very close way and we keep executing their campaign, as in when it comes to us. I hope I answered.
Operator
Can you use your handset mode please?
Harsh Vora
Sure. Now it’s clear.
Operator
Yes, please go ahead.
Harsh Vora
Yeah, from the presentation I read there are about 2,000 plus campaigns delivered. If you can just quantify how much have been executed in this particular quarter.
Hiren Shah
So I do not have the right number in front of me in terms of how many exactly campaign had happened this year. But this quarter. But we’re constantly keep getting more and more inquiries and we’re constantly adding more and more sales team which is getting more number of campaigns on a month, on month and week, on week basis.
But I can definitely get back to you on a way or how many campaign we executed in person.
Harsh Vora
Second question with regards to the acquisition strategy and progress. I mean what is the estimated size of the planned acquisition and where do we currently stand in terms of progress the acquisition?
Hiren Shah
Okay, so you’re talking about the inorganic growth, right? Yeah, so yeah, we. We have a team inside who is working very closely with various different companies to identify good targets. And we are very positive about few of the news which can come very soon. Okay. And you know, as soon as it comes, you know, we’ll definitely inform the exchange about our next move for that. But yeah, we believe that there is a good opportunity in this space where you know, consolidation can help to grow and obviously that can complement each other to grow for the fast.
Harsh Vora
Right. So this is regarding the acquisition of a North American company that you have mentioned in the presentation. Just going to it right now. You’re talking about that, right?
Hiren Shah
Yes, we have a few North American companies as a part of a target list and we are very closely working with them. And few of the places we also got an LOI and we are just taking working towards to get how. How good they could be fit with us. The moment, you know, we able to do all due diligence, you know, we’ll definitely announce at the exchange.
Harsh Vora
Right. So and regarding your domain business, if you can just update about how it is going and what shape is it tasting right now.
Hiren Shah
So domain business, we currently have around 2.2 million domains under our portfolio. And. And we are just helping and we’re growing at roughly 8 to 10% CAGR and that particular only domain side, if you look at the industry wide as well, we are India’s second largest women registrar after maybe if you have a code ID as the number one. And we are keep growing that that kind of business is also growing and adding more and more customers from India as well as abroad.
Harsh Vora
Right sir. And any other. Major competitors. I mean how, how do you see the competitive landscape changing going forward?
Hiren Shah
First of all, you know I would like to say here that India or global, you know we. The COVID was a blessing in this guide which has helped everyone to grow further fast on digital side. So I believe that there is a lot of requirement of companies like us which can help us in. In you know, growing and helping those enterprises to grow faster.
See basically if you look at the companies like us enable the companies to grow. So we are generally kind of in a packed partners with any of the companies. So I believe that there is a lot of requirement of companies like us to come and sell the customers at the moment because the pie is constantly increasing and this pie requires those companies to solve them. So I believe these companies are not competition but we are complementing to each other. If you look at like you know last year we had around 50,000 crore as a India market share as per the Dentsu’s latest report. And then this year this is crossing around 69,000 70,000 crore.
So if you look at that 19% CAGR growth is what even everyone is expecting on that side. So I believe that instead of competition we have to see that as a complement to each other and grow further on that.
Harsh Vora
Right sir. So as of now in the market you don’t see anybody else giving the same services and offerings like your company, right?
Hiren Shah
There are companies who is operating like us and definitely we are complementing each other. Okay. I mean from giant to small as well on both the side.
Harsh Vora
Right sir. And any new product or service segments that you are going to enter in the future that are in talk right now or something like that.
Hiren Shah
So our R and D team and our internal product team is constantly evolving and they’re constantly working on developing new products. The moment the product is finalized and we get the right GTM or it is a go to market strategy decided we’ll definitely inform the exchange that we are ready with those products.
Harsh Vora
Right sir. And the last question, if you can just throw some light on the AI and how are you going to integrate AI, I mean as a business, in the business offerings.
Hiren Shah
So basically you know at Virtos we are the adapter of AI. We started using the AI and ML since long, you know till the time. I mean AI has become very name, I mean word in mouth name kind of thing recently by. By various tools which has come which is a end user tool. But when it comes to the companies like us we had such things in the past because we are constantly working on a huge data. Okay, so for example, like we have a few terabytes of log files getting created on a platform on a daily basis and we have to keep analyzing those data by using various machine learning structures.
So we are constantly using it and the more and more AI structure become more easy and adaptable for user. Also we’re also implementing more and more better thing on our front panel as well where you know, we can start have our user. Just to use AI in a more better way. So AI is constantly helping us and I’m sure that in future also. Yeah. Will help us grow further fast.
Harsh Vora
Right. Just quickly, one last question. If you can just answer. How do you assess the business potential in US market following terms administration and is there any other geography that you are planning to enter?
Operator
Ladies and gentlemen, please stay connected. The management team line is disconnected. Please stay connected. Ladies and gentlemen, thank you for patiently holding. We have Mr. Shah back on the call.
Hiren Shah
I’m so sorry,
Harsh Vora
This is, this is the last question. Yes sir. So how do you see business potential in the US market following Trump’s administration and what are the other geographies that helping to expand?
Hiren Shah
So if you look at the Trumps, you know their election, the campaign would make the country. So now whenever anybody, any country wants to have such agendas, you know, obviously they help on creating a lot of opportunities for internal companies and enterprises to grow further.
So whenever even they want to grow, they obviously would like to have such advertising as a measure, things to do to broadcast themselves. So I believe that these are like a positive point for us and definitely this can help us to get more in more business from the enterprises who are going further fast in the US like us. Obviously there is a lot of good opportunity in the MENA region and Southeast Asia as well as Europe. So all of these regions and a few of these regions has few things very advanced places. And at the same time a few of the places it’s in the developing but good opportunity.
So they’re constantly evolving. But definitely at this moment our major focus was India, US MENA region, another part of the world, but majority in this three region. But slow and steadily we are growing and expanding. And as I said in one of the last question, we already had done a setup in UK so that we can cater the Europe market, but not yet started fully operational. Same way in the hk. We have done the basic background structure ready so that we can target the China and Southeast Asia market. But still it is an under structure and we are still not yet started a lot of recruitment over there. The moment we are ready with that, we will definitely start on this.
Harsh Vora
Right sir. Estimating in three years. That would be mainly inorganic acquisition. Hello. Okay, is it time now?
Operator
Yes.
Harsh Vora
Yeah. Those are the hundred crore pad that we are estimating in three years. This will be mostly inorganic acquisition or organic also will play some major part in this.
Hiren Shah
So we, we are hoping to get few inorganic as well as part of it. So this will be combination of organic and inorganic both.
Harsh Vora
All right, thank you. So that, that was it from my end.
Hiren Shah
Thank you so much. Thank you.
Operator
Take a next question from the line of Kashish, an individual investor. Please go ahead.
Kashish
Hello. Yeah. Sir, you mentioned about the PAT which could be 100 crores in the coming three years. Is there any forecast about the turnover as well the revenue in the coming two to three years of down the line?
Hiren Shah
Yeah. So generally as I mentioned, you know we’ll be in the range of PAT of around 8 to 12%. Okay. And that is what I expect expectation that you know we should be in between that range. But definitely it’s again depend on like you know, what kind of acquisition able to do. Few may be a strategic, you may be revenue generated or you may be a profit generated acquisition.
So obviously that will be purely depend on how we further progress on those side of inorganic growth.
Kashish
One more question. Despite all the fast paced growth, there has been consistent downfall in the share prices. Is there any particular reason? I mean is there any promoter selling the stakes fii, lowering the stakes or the mutual funds moving out of the stock or it’s just the macro sentiments of the market.
Hiren Shah
See, basically, I mean industry has its own secondary market, has its own way of behaving towards the various different region across the globe. Okay. So we are not sure right person to comment on the secondary side, secondary market side. But on the company side we can definitely say that your company is growing and we are working very hard to grow it further faster on this.
Kashish
All right, sir. But there is no going concern kind of thing because there is a sharp decline and consistent downfall of the prices, equity prices in the past few months.
Hiren Shah
No, I can understand pain over there, Ashish, but there’s something which is, which is out of our purview. We are focused more on the business side than looking at the stock side.
Kashish
Thank you.
Operator
Thank you.
Hiren Shah
Thank you.
Operator
Ladies and gentlemen. We’ll take that as the last question for today on behalf of Virtuals Ltd. That concludes this conference. Thank you all for joining the call.
Hiren Shah
Thank you.