Zinka Logistics Solutions Ltd (NSE: BLACKBUCK) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
Abhilash Aswal — Senior Manager, Strategy
Rajesh Kumar Naidu Yabaji — CMD and CEO
Analysts:
Sachin Dixit — Analyst
Presentation:
Operator
Good day and welcome to Zinka Logistics Solutions Limited Earnings conference call. 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] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhilash Aswal from Zinka Logistics Solutions Limited. Thank you. And over to you sir.
Abhilash Aswal — Senior Manager, Strategy
Thank you and good evening. Welcome to Zynca Logistics Solutions Ltd. Q3FY25 earnings call. Please note that a copy of Disclosure is available on the Investor Editions section of the website as well as on the stock exchanges. Anything said on this call which reflects the outlook towards the future or which could be constituted as a forward looking statement must be reviewed in conjunction with the risk that the company faces. Please note that the audio of the earnings call is the copyright material of Brinka Logistics Solutions Limited and cannot be copied, rebroadcasted or activated in the PR media without specific and written consent of the company. To give you an in depth understanding of the company and answer all your queries, we have from the management side, Mr. Radesh Kumar Naidu Yabadi, CMD and CEO and Mr. Rapagam Nayak, CFO.
With this I would like to hand over the call to Mr. Rajesh. Thank you.
Rajesh Kumar Naidu Yabaji — CMD and CEO
Good evening everyone. Welcome to our second earnings call as a public company. This is our second quarter of performance and we will walk you through what has happened the last quarter. Jumping straight into. Yeah, so jumping straight into the snapshot of the results. You know, first I think there is a lag. So jumping straight into the, you know, results. The snapshot of Q3 is in front of you. We did close to about 123crores in overall revenues which is close to about 45% growth on a year on year basis. Because of the nature of revenues in our business which are largely software in nature and hence the direct cost to the business are fairly low. Most of the revenues convert into contribution profits. We at a contribution profit level have done close to about 93%. That has been the trajectory largely over the course of last two, three years as well. So we made close to about 115 crores in contribution profit which is a 48% growth on a year on year basis. With a model where revenues compound continuously and customers we have acquired over the period of time, there is no incremental cost of acquisition. There’s a very strong flow through of revenue growth into adjusted ebitda. And this quarter we’ve been able to deliver an adjusted EBITDA of close to 42 crores which is close to 5 times growth over the last year. From last year we did close to about three and a half crores in seven and half crores. In addition EBITDA, that number now has gone to 42 crores. And these are the top line financial metrics. Most of them get delivered by active work on operating metrics. Few operating metrics to discuss. The number one is number of customers who use us. This is the metric on transacting customers. In the last quarter for US we have 7,35,000 transacting customers, which is a growth of 21% on a year, on year basis. Then these customers broadly, again, if you look at it, these are like in excess of 20% of India’s truck operators were transacting with us and loyal to us in these users. Not only that, they use us for probably, you know, one service. A lot of them use us powerfully. 350,000 users, which is roughly half of the users of the transacting customers are using greater than or equal to two services on the platform. Which on an absolute basis is roughly a growth of close to about 30% on a year.
On year basis. One of our largest revenue verticals is payments. Under payments we make revenue when the proxy for making revenue comes from the GTV of payments. We made close to about 6100 crores of GTV in the payments vertical for us, which is a combination of tolling and fueling payments. And that’s a growth of close to about 35% year on year basis. So at a broad level, to summarize what we have done, we continue our trajectory of consistent profitable growth because most of our profits, you know, all the profits are coming in from our core verticals, which today are market leaders from a perspective of market shares, from a customer, NPS perspective, customer love, I think we’re doing phenomenally well. Those are growing at a very healthy pace while we continue to invest into newer growth opportunities, sort of, which gives us a balance in being able to deliver profitability at the same time, continue to keep our goal at redefining India’s stocking and continue to go onto that particular path.
Now again, every earnings call probably I will narrate our problem statement which we are solving. So this is our trucking industry where for India we spend 16%, 15, 16% of India’s GDP we spend on logistics. And Indian logistics gets executed dominantly through trucks. Indian trucking industry is a $200 billion industry just fast growing, largely operated by small and medium scale truck operators. 75% of these guys own less than five trucks. Now if you look at the life cycle of this particular truck operator, right from buying a truck, which again makes a truck costly by like 10% because of intermediaries in the transaction, to financing a truck where half the industries local pawn broker led with interest rates of like 24 to 48%, then getting access to loads where there is again dead wastage of days because a truck runs in India only for like 14, 16 days, you know, a month remaining time he’s searching for load, waiting to get unloaded, etc. Right. So and on a transaction, he again loses between 20% of the brokerage commission, right? So if you pick up any value stream in a trucker’s life, right, it is typically delivered through intermediaries and is inefficient. This leads to India’s trucking, you know, being, you know, inefficient. And this is something which is the root cause for India’s logistics being bottlenecked, India logistics being high cost. And we believe that the route towards transforming this is to really transform the life of the truck operators. This is the mission we have chosen.
You know, in the midterm for us, probably for the next five, 10 years, we’ll be solving at the core for the fleet operator. And through solving for that, we will try to dream about how can we transform India trucking, narrowing that down into really, you know, what’s our strategy to go after this particular problem, right? You know, to go after a particular problem. There are three pronged strategy. One is offerings. Offerings is nothing but a resultant of problem solving for this particular customer base. Year after year, quarter after quarter, we’ve continuously picked up problem statements for our customers and we have solved them because technology, because technology is a lever to solve most of these particular challenges. And we’ve been at it to solve them. As you can see in the myriad of solutions we provide for the truck operator, a lot of them are in the growth phases and nascent phases of development. And the core verticals are tolling and GPS, which contribute to 87% of our revenue. And we continue to execute in this direction of problem solving for our customers.
Second area is the whole platform. Our customers get their services delivered through the mobile app. They come and use the platform. Platform continues to get stronger year after year, quarter after quarter. We have close to about 20% of India transacting on our app and their usage continues to go up. Right. If you can see, there is one vertical called as fleet docs, right? That’s a feature for truck operators to manage all the documents at one place. Their fitness certificate, their pollution certificate, any chalan on, you know, their vehicle driving, etc. All those alert, insurance, expiry, everything can get managed at one place, right? So such a, such a feature creates higher utility for the, you know, app for the customers. He starts spending more amount of time. And as and when we keep improving each of our existing features, he spends more time. So 45 minutes is the daily app usage in this quarter for our customers, which has moved up significantly about 15% over the last year, which was 39 minutes. So this continues to compound as the nature of our customers. Right. He essentially needs hand holding.
Our entire acquisition and servicing is offline. We have a 9000 physical touchpoint network across the country which sells and services to this particular customer and which has 80% presence. Right. So this is the strategy we followed for the last four, five years. We continue to double down on this particular strategy and this strategy is delivering. Right. So that’s the problem we are solving. This is our strategy in the midterm for the next five, ten years how we will execute to get closer to solving this particular problem.
Now giving you a snippet of the operational metrics growth starting with monthly transacting truck operators which I’ve spoken about on a year on year basis they’ve grown close to about 20, 21% moving from 6.1 lakh truck operators to 7.4 lakh truck operators in this particular quarter. That’s a year on year growth of 21%. And next metric is on power usage. 45% of these users are using greater than equal to services on the platform where there’s a growth of 30% on a year on year basis. Then these users spending more time with us. 39 minutes was their usage in the last year, same quarter now that number has gone to 45 minutes which is roughly 15% on a year on year basis.
So that’s the metrics at a very broad level that in our overall marketplace which we have floated in our old platform, our customers coming using us and are they transacting? Next moving to some of the metrics which define the kind of volume at which they’re transacting with us. So core vector of measure There is the GTV on payments, GDP on payments. We’ve done close to 6100 crores in GTV on payments this quarter which was 4500 crore last year, same quarter which is a growth of 35% on a year on year basis. In terms of the number of payment transactions, it was about close to 10.6 crore transactions in the last year. Now that number has moved to close to 14.5 crore transactions this year. Just close to a 36% growth on a year on year basis.
And I’m not narrating but most of these numbers are largely tracking the nine month growth as well. There were nine month growth I need to highlight, I will highlight there but largely they’ll be tracking the same number as a result of activity increase as a result of volume of things which are happening increase. Our gross revenues are compounding our gross revenues are compounded by 45% on a year on year basis, moving from 85 crores in quarterly revenues to 123 crores in quarterly revenues this quarter. And if you remove the interest income because interest income because of IPO proceeds gave a little bit of kicker. The revenue from continuing operations have grown at 41% on a year on year basis from 81 crores to 114 crores. And a strong sequential quarter growth as well of about 15% from Q2 to Q3, which the number which is not present on the deck at this moment, revenue from growth businesses, which is if you leave out the core verticals of tolling and vehicle tracking, that number has grown from 7 crores to about 14 and a half crores, which is close to doubling on a year on year basis. Now all these metrics when they flow into contribution profit. Contribution profit has grown at about 48% growing from 77 and a half crores to about 115 crores in this particular quarter. And contribution margin percentage which I was mentioning, nature of the business has not changed. So the contribution margin levels are in the range of the 91 to 93%, 93% levels this particular quarter which was similar the last quarter as well. And because of all of this happening and the quality of revenues, adjusted EBITDA has grown much more stronger than all of this because of operating leverage at play. Most of the revenue growth flows into adjusted ebitda. This is what we have spoken to most of you over the course of the IPO and the last quarter.
So you can see we have delivered an adjusted EBITDA of 42 crores this quarter which is a growth of close to five times from the previous year quarter where we did 7.5 crores. And if you even remove the interest income, this is the line item we are introducing for the first time. Most of the metrics we’ve continued reported at the older adjusted EBITDA over the course of 2 to 3/4 we’ll move everything to adjusted EBITDA excluding other income because that is the right metric to measure there. From a 3.4 crore last year, we have grown to 33 crore this year which which is again a growth of roughly about 9, close to 10 times over the last year. So overall as you can see, a very balanced growth from an overall revenue perspective. Very strong growth on profitability because of operating leverage at play. And the nature of the business is playing out and continuous aggression on the new initiatives as I will outlay as we move forward. So summarizing the key highlights from the numbers we have seen the first part I will comment on the core businesses of the company.
We’ve continued to maintain strong growth momentum on the overall business growing at 45% from a quarter on quarter basis and nine months 50%. What is important to track is that the core businesses continue to compound 35% this quarter growth 43% nine months growth. As in the discussion that most of you, you’ve seen that even the drhp, the first one of the biggest risk disclosed in our revenue is the Fast act program management fee which is linked to government policies. And roughly about between 30 to 35% of revenues come from such a line item. And what is important to note is that in the past government had given minimal visibility into how this particular program management fee is going to track into the future.
What we are pleased to report is that in January, government has come out with a notification clarifying really what this mdr, what this program management fee is going to be in the future, which gives a very strong cementing to the revenues, the quality of the revenues and the revenue result. And predictability for our company into the future which will help us plan things better. So on an overall revenue the update is that we’re growing strongly and the quality of the growth and the quality of the revenues continue to get cemented.
Coming to the next line item in terms of new business, we keep doing a lot of work. More importantly to Note management teams, 80% of the bandwidth typically goes into like really driving the new initiatives growth because you know, new, the core initiatives are really well oiled. Doesn’t really need that much of you know, management from bandwidth from a management side. So one of the vectors, one of the, you know, new businesses which we’ve been incubating over the last 18 months was the area of Fuel Sensor. Fuel Sensor was an initiative under the telematics hood where we were selling, you know, units but we were not able to sell at a particular price point where the Indian truck operator would be able to leverage value like from that we were able to really re engineer that particular device, work with our suppliers over the course of period in Russia and in China over the past 18 months and were able to launch a device at a price point where we are able to get the customers get more value at that particular price point. And we were able to and we were able to build the whole installation and service network in parallel to that per fuel Sensor.
These two initiatives went live over the past six months that led to a growth where the total sales we did in the last quarter is equal to the total lifetime sales we did till that point in time. So we’ve been able to unlock a category which basically will stabilize in the course of the next 18 months, 18, 24 months and we will be able to give rise to a new vertical which which will deliver revenues equivalent to the current overall telematics revenues. So that’s a big unlock for us and we believe that every six months we’ll be able to create such a big unlock as we keep explaining you and delivering the earnings results quarter on quarter basis. Then next metric is on platform engagement because those are the lead vectors of growth for revenue. Because we need to acquire new customers, our GTV growth needs to keep coming through and users need to use us more on a year on year basis.
As I reported, we’ve grown on like in excess of 20% on the monthly transaction. Truck operators, our payments GDP growth has come through at 34% and users are using us more by spending 15% more time on a year on year basis. So that is the lead vector of growth where we are fundamentally getting stronger year on year.
Now moving to profitability metric. As I mentioned, in this financial year already at a nine month level we have delivered 85 crores of adjusted EBITDA profits which is our operational profitability metric which same thing previous year we did 3.4 crores which is a jump of 88 and a half crores over the last financial year. And speaking about the quarter from last year, seven and a half crores to this year, 42 crores, which is a jump of 35 crores. So very strong profitability performance which we’ve always articulated that we are in a technology led business where you will see strong operating leverage. We have minimal increase in cost year on year. But we continue to increase our acquisitions and we continue to increase our revenue at a much stronger pace as we keep delivering momentum.
Talking about operating leverage because I’ve used that word multiple times in the course of my presentation. We presented the slide same slide last quarter. Presenting the same slide again, you look at Q3FY25 to Q3FY24, we’ve grown in revenues 38 crores. Adjusted EBITDA has grown 34 crores which is a 91% efficiency flow through on a year on year basis. Same thing looked at a sequential quarter basis. Like if you look at Q2FY24 to Q3FY24, revenue has grown roughly about 15 percentage points which is 18 and 9, which is 19 crores growth.
Adjusted EBITDA has grown from 25 crores to 42 crores which is 17 and a half crores growth which is again on a sequential basis operating leverage of 93%. Right. Again, there’s no secret sauce to this, you know, no hidden source to this. That secret sauce. We’ve explained multiple times this is happening because majority of our revenues are recurring in nature like we acquire customers. But these customers cost is charged off in the P and L in the sales and marketing cost in this quarter. But these customers once acquired because the kind of products we’ve built, they are sticky and our annual churn is quite minimal. So the recurring revenue continues to compound.
Second aspect is that inside the recurring revenue one more compounding impact is that these customers offtake and take up newer services. When they take off newer services, the revenue of these customers continue to compound. Second lever when these revenues grow, the efficiency at which they convert into contribution margin is very high. With a 93% contribution margin this quarter, revenues have converted into contribution margin. Third year on year the net revenue retention is very strong and user retention is very strong. That leads to revenues compounding at a much faster pace. And all of this happening without any investment in asset because we don’t have to invest in any hard capex like you’re not running in any balance sheet heavy business. So it’s an asset like model.
All of this results in typically our adjusted EBITDA mimicking our cash flows and our revenues typically flowing down to adjusted EBITDA with an efficiency of in excess of 90%, broadly in the range of 75 to 90% depending on quarter on quarter right. Essentially truly a platform led revenues at work, which has a strong pnl, which is driving a strong PNL with a very strong operating leverage. And if you map out the EBITDA chart consistently across the last seven quarters, if you look at it, we’ve grown in the last seven quarters from negative of 6 adjusted EBITDA continuously. We’ve grown every quarter on the sequential metric because of the operating leverage and we are able to deliver 42 crores in this quarter. And that number if you look at it from a negative 9% has moved to plus 34% like in a one and a half year sort of a horizon which is like a plus 44 percentage points turnaround in profitability which we’ve been able to manage because of high gross margin because of operating leverage, which is helping us deliver this. Coming back into basics in terms of explaining how the P and L looks like, we’ve covered the operational metrics, we’ve covered operating leverage, we’ve now back to pnl. Broad repetition of what I’ve spoken before.
Revenue from operations grown at about 41%. Total income at 123 crores growing at 45% year on year and as I mentioned minimal increase in direct costs. Direct costs should have grown at revenue but they are not because of again a leverage in the operating costs as direct costs as well. So they’ve only grown at about 11%, contribution margin has grown at 48% and total expenses if you see on a year on year basis have only grown at 4% despite a very small growth in total expense of the company. Remember that we are aggressively investing in new initiatives. We are aggressively and increasingly acquiring more customers on a quarter level in each of our business verticals which led to our additional EBITDA coming to about 42 crores which over last year has grown about close to five times from ten and a half. And from adjusted EBITDA if you remove the other income, 42 crores becomes 33 crores compared to 3 crores 3 and a half crores last year which is close to about 10 times growth over the last year.
Now talking about much more stringent metric which is pat. In pat excluding exceptional items in exceptional item we largely have the share based payment cost which is a one time cost which from Q2 and Q3 that cost is over. So you can assume that exceptional items from a share based payment cost and IPO one time IPO link costs also over. If you remove those two costs Pat of the company this quarter is 30 crores compared to negative 6 and a half crores last quarter. At a PAT level also you can see a turnaround of close to about 37 crores of profitability. Turnaround from a year on year basis and overall Pat, obviously negative because share based payments is impacting this and one time IPO cost is impacting this. But with facts on the table and with the facts which are known to us at this point in time, with sufficient confidence, we can probably give you a bit of guidance that we will probably not be having these exceptional items in the coming quarters. probably in the immediate quarter we can expect none of these exceptional items to be repeating in the continued operations. So you may be seeing very fast PAT excluding exceptional item and discontinued operations. Mimic the PAT at overall level, giving you a walkthrough of PAT to adjusted EBITDA. Broadly simple, from PAT of negative of 48 crores this quarter, exceptional items is the biggest number of 78 crores. Then your depreciation amortization is roughly about 8 crores. Your ESOP cost is roughly about 3 crores. And you know, which gives you the adjusted ebitda number of 42 crores and other income of, you know, 8.98 crores makes the adjusted EBITDA other income 233 crores. Right. So that’s broadly, you know, what we have and would love to open the floor for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. [Operator Instructions] The first question is from nanav. Sachin Dixit from GM Financial. Please go ahead.
Sachin Dixit
Graduation team. Congrats on a great set of results. My first question is more of an explainer, right. I love to have some segmental color on the business. When you say, for example growth business are growing 100%, can we break down some of it? Where is it coming from? Secondly, again, because it’s a bit tough to triangulate, right? You combine core businesses, tooling and telematics. But when we are looking at gtv, we are getting which is fueling and tolling. So like it’s tough to triangulate for us. Would love to have some more clarity and some more breakdown if that’s possible.
Rajesh Kumar Naidu Yabaji
Yeah. So probably we are waiting for businesses to probably touch at least 15 to 20% of the revenue contribution where they are a bit material or at least on an absolute basis if they can contribute to an annual revenue of at least 50, 60 crores. I think that’s when we wanted to start giving out segmental understanding. But from your question, let me give some color on what’s really happening under the hood in new businesses. The growth in the revenue is led primarily today by two verticals. One is the marketplace vertical which is driven by two business models. One is the classifieds model where we charge customers a subscription. That model has seen a very strong momentum of growth in the last two quarters. And we would, I mean we continue to expect strong growth there and we expect that that business, we were expecting that business to break even probably by end of, you know, this year. End of this year as in December 25th to you know, March 26th. Broadly I think that business looks to be on track in that particular zone.
The second vector of growth is the vehicle finance business which is basically a partner led model where we originate loans for origination fee and a loan service fee income for our partners. That is the other vector of growth which is again compounding at a very healthy pace of probably close to again doubling. Both these businesses are probably close to doubling on a year on year basis. And joining the party is basically now the fuel sensor model where you will see probably in six to nine months down the line you would see fuel sensor also starting to make material moves in the growth businesses providing the much needed lift in the revenues from the overall growth businesses. So I would say that broadly whatever we are selling. So yeah, so I think this is the color on what is the split of these. So today materially marketplace, the load marketplace business and the vehicle finance business are contributing to majority of this particular uptick. But as we move forward in the next couple of quarters Fuel sensor will also start contributing. This is the color in the overall.
Sachin Dixit
Just to clarify, Fuel sensors is not part of telematics, it’s part of growth businesses. I believe telematics is within code.
Rajesh Kumar Naidu Yabaji
Fuel sensor is part of the telematics business vertical. Under telematics you have GPS and you have Fuel sensor. Tolling and GPS are part of the core businesses. Fuel sensor is not part of the core business.
Sachin Dixit
Understood, understood. At least I think telematics at least is roughly 15 odd percent the size of our overall revenue. Can we at least get the revenue number for telematics?
Rajesh Kumar Naidu Yabaji
We will probably, you know take this request and we will come back probably next earnings. Yeah, we’ll look at it and we’ll come back.
Sachin Dixit
Sounds good. And my second question is on the line of basically our platform partners. So if there is any update in terms of people come joining us on fastech side on vehicle financing side. I understand like there’s limited scope but any update on more partners?
Rajesh Kumar Naidu Yabaji
Yes. So there’s an update on partners. We Full Fledged launched one new partner in the FastTag space with commercials, you know much better than the existing commercials. So that gives a good flip point. number one. Second is that as you all have seen that we’ve applied for the PPI license in the drhp, right? We are pursuing that strongly and we expect ourselves to be a full fledged fast provider over the due course. Next update on partners in the vehicle finance business where we’ve been able to onboard a new bank to disburse loans on our platform and again this partner is more onboarded on a CLM to model where they will take 80% of the vehicle loan originations and then they will have full risk on that. Right then so again there again it’s a partner LED model where whatever you see in the financials, that’s the sort of risk sharing then that’s the model. Then in terms of telematics it’s not partners but we’ve been able to crack very strong manufacturing partnerships both in India and in China which is giving us further advantages in procurement in the base GPS device and incrementally even in the AIs device which is going to be the future device in the country, like on the GNSS side etc. So in both the areas of basic GPS device we’ve been able to crack manufacturing partnerships which is enabling us, you know, lower cost of procurement in the future.
Then obviously as I was mentioning in the fuel sensor, we were able to again crack a better quality product at a much better price with newer manufacturing partnerships which is again helping us drive growth. So each of our businesses, as you rightly are, Sachin, that we are partnering with various different people, either be it manufacturing companies or be it with rental business partners to originate loans, or be it banking partners to do prepaid cards, etc. In all of these we are continually improving in the existing partnerships, we are signing up newer partnerships with better terms which is helping us improve our funnels, helping us improve our business and we are continuing and that’s a continual part of the business for us.
Sachin Dixit
Perfect, perfect. Can I squeeze in one more question or I should get it right in with you? I’m fine either ways.
Rajesh Kumar Naidu Yabaji
Sure. Sachin, go ahead please, quickly.
Sachin Dixit
The third question is largely on tolling market share. I understand, like the tolling business, I mean the overall industry is growing roughly 13 14% while RGTV overall payment side is growing 35%. Where do we stand in terms of market share roughly and where can we potentially platty if that’s one question you can take.
Rajesh Kumar Naidu Yabaji
So last financial year basically we blended, the market share was close to about 33%. Right. As we remember, which would disclose this year by June we were at about 37. Right. You know, by December end, by I think September end, last time we gave that number that we were at 40. By December end we already reached close to about 43%. Understood. And where can it potentially plateau if you see such a plateau happening ever? We continue to execute. We continue to execute. Market’s pretty open for us because nobody’s really building customized specific products for truck operators. Our uptimes are the best. Our incremental value props are the best. Our other products again are the best. The customer sees like a total value prop to really work with us. Our servicing is the best. Nobody has 9,000 people on the ground. So I mean, yeah, so we will continue to execute. And you know, I think the whatever we’re seeing in the hindsight, I think we will probably at least keep doing that for the next couple of years. Sounds good. Thanks so much and all the best. Thank you very much. I request to all the participants kindly restrict to two questions per participant and join the queue for a follow up question. Next question is from Land of Gauravara from Morgan Stanley. Please go ahead. Hey. Hi. Congrats on good execution. I have actually four questions. Feel free to dodge it if you think it’s too much. I’ll get back in the queue. So my first question is on program management fee update, the regulatory update, how frequently that update comes. Is there a annual revision that happens or is it ad hoc like it can happen in two years, it can happen in four years. The second is what is the implication of getting a PPI that you have applied for? You kind of, you know, covered by a regulatory guidelines which you are currently not. And also from a unit economics perspective, you have the potential to get the entire unit economics rather than sharing it with a partner. Right now. The third question is on the fuel sensor. What’s the starting price point right now versus alternate options available in the market, which is making you completely disruptive in this market and you can kind of penetrate much deeper. And lastly, why should the employee cost even X of ESOP fall on a sequential basis? When you’re growing the business so healthily, shouldn’t the employee cost also grow? Of course at a slower rate than revenue, but why should it fall in absolute terms? Thank you. Yeah, yeah. So first question on MDR certainty Gaurav, in the history of the whole program management fee, by now it’s roughly close to about 1112 years government has been operating this program. The revision in MDR on the issuance side has only happened once. Number one. Number two, the first time the revision happened was in the year was basically in the year March 2022 is when the revision happened. When the revision happened first time they gave a visibility of two years which was up to March 2024. And after that there was literally no visibility. And it was deemed that it will continue, but there was still a bit of uncertainty lying around because it was deemed that it will continue, but there was no official confirmation. Now as we speak, typically government gives out a date, a sunset date for MDR as it gave in the last notification. As it currently stands out, it’s a open ended date given out saying that this is the MDR and this will remain as we keep moving forward. Because the minimum cost which any company incurs is a bare minimum cost in terms of running the entire issuance stack. And that number for different banks and different players is a number where they just break Even at that 1% scale because of the, you know, kind of market they’re serving. The market we are serving in the two by two is a market which basically has least number of tags but highest amount of gtv because the trucker segment, right? India has roughly, you know, 12 million trucks and total vehicles which have a fast tag in the country, roughly 65 to 70 million. So this 12 million trucks again if you break it down, only MNH CV flies on national highways. 4 million trucks out of 65 million vehicles in the country. 65 to like 80 million vehicles in the country roughly like produces 70% of the GDP, right? So basically for players who are not operating in this segment, in the other segment, typically it’s very unprofitable to operate even at 1%. So for government like below that literally, you know, it’s very tough to, you know, operate. Right? That’s a question in mdr. Second point is on ppi, our drive on applying for PPI and going for that for us is more becoming a full stack payments provider. Today we depend on lot of different uptimes and downtimes on our partner servers, on our partners uptimes. And a lot of these involve a lot of high level of coordination, a lot of effort and cost. As we become full stack, the idea is not to really move out of partners but to also have a stack which can deliver better number one. And then second aspect is basically on obviously economics because we get to keep the whole share, but the economics will probably, you know, not improve, you know, 25 to 30% probably will improve in the range of 15 to 20%. So economics, yes, will definitely improve. The second question on PPI unit economics. Third question on fuel sensor. We used to sell a fuel sensor at 20,000 rupees. When we launched we were able to bring some volumes and bring it down to 15,000. We used to sell it at 15,000 about four months back. Right. And at that price point, typically, the demand was not taking off because we’re talking about a truck operator who typically net earnings probably would be 15, 20,000 rupees per truck per month. Now, he needs to curtail theft on fuel. He needs this device. But at this.
Operator
Same time like the paying potential is low. Right. So today in the market we start like we started selling the fuel sensor. Anywhere in the range of blended realization for us is roughly about 10,500 to 11,000 rupees from the fuel sensor. Right. In the market you can find a fuel sensor lowest is our price and the range of the price is up to 25,000 rupees. Right. For our truck operator really the sensitivity is that is the fuel getting stolen in the range of 5 liters and above. Right. Sensitivity is not that if half a litre is gone or one liter is gone. So the applications are wide. So we are essentially building a product customized in such a way that we are able to produce 99% plus plus accuracy. We’ve been able to deliver with a product which the current product is providing 99.5%. We’ve been able to establish a product which is again providing a 99.5% kind of reliability in our reading to the customer. And that we’ve been able to dramatically work on costs. Right. And we’ve been able to bring that down. And that is the reason why we are able to operate at a, you know, 10,000 plus plus price point. And at the same time we will be able to deliver a contribution margin profile of 70 to 80% on the stabilized unit economics perspective. Right. So that’s the fuel sensor story on what the market is selling, where we are selling and why we will be able to outbeat because of focus on the customer segment, what he needs reliability of the device. Because like we have a service set up a comprehensive lab which tests out the reliability. And we’ve done like all this brunt work over the last 18 months which we’ve been able to crack this device at this point in time. Now your last question. Employee cost reduction. Why? Right. Yeah. Satya, you want to take that question. So Gaurav, I think two things. One, as you have consistently said we continue to move more towards variabilization of the workforce. So that you would see that the other expenses has gone up and that includes manpower and consultancy charges. I think we have explained this every quarter that that’s the intent to variabilize. That’s one second. As always, we continue to run a lean team and execution focus. I think the third point, just one time is that in December some of our leave lapses, etc happen. So there are some reversals in the event. Cashmere and gratuity. So that is to the extent of 1 and a half, 1.7 crores. But other than that As I said, continuous focus is on variabilizing the workforce. So you will see the other expenses go up if the employee benefits expense reduce. Thank you for the jail response. All the best. Thank you very much. Next question is from Land of Pratik Podar from Bandana amc. Please go ahead. Yeah, hi. Firstly, congratulations. I think this quarter EBITDA is more than what you did in H1, so congrats for that. A couple of questions. 1. One is just when I see your GTV versus MTUS, right? The GTV has outperformed MTUS by almost 10 percentage. Just curious, I would have thought that MTU should have also grown, but that hasn’t. Why is that so? Yeah, so the overall transacting truck operators, right. If you look at it does not only come from payments, business comes from loads, marketplace comes from telematics, comes from, you know, multiple other sources of interactions. And what you are essentially looking at is basically the GTV on payment side, right? Point number one, if you look at the user growth on, you know, in terms of the trucks growth etc only on like to like payments basis that number is a little higher. Higher than the monthly transacting user growth. 20% number is the overall monthly transacting user growth. A trucks in on payments would have grown at about 24, 25% point number one. Point number two we get the benefit of. Sorry I was asking. This was on by basis, right? That’s what you’re saying now. Okay, yeah, sure. Year on year basis. Yes. Right, yeah. Second factor of growth is that our GDP in payments gets a compounding impact of India’s national road network. India’s national road network over the last three to five years has been growing at a cargo of 5 to 7%. Now when India’s national highways get built out, right? The state highways, which are typically narrow roads and are inefficient roads from a truck fuel mileage perspective, etc. And from a reachability perspective because the state highway usage is cannibalized by the national highway introduction. Because of that you see more, you know, road ton per kilometers happening on national highways. That’s factor number two. Factor number three is that there is an inflationary increase in the prices of toll fares year on year roughly in the past toll fares have inflated at the range of anywhere in the 6 to 7% on a year on year basis. That again leads to the overall GDP growth. So trucker trucks growth on the platform, which is I mentioned to you like 20, 24% multiplied by the same trucks doing more number of kilometers on national highways multiplied by you know the toll faring fair increase itself. All of this leads to GTV growing at a much faster pace than the primary metrics grow. Got it, got it. No, that’s, that’s, that’s really helpful. The second question was on fuel sensor, right? You said you localized, et cetera. Just from a monetization perspective this is SaaS basis in the sense you charge per month subscription service. Is that a fair understanding. Yeah, it’s again, it’s the same model. We charge upfront for the first year because that includes the device cost, and after that, it’s annual recurring subscription, which again comes to renewal and. And it keeps, it’s an annuity income again, nature of revenue again will be similar as the GPS revenue. Got it? No. Fantastic. And lastly, when I look at, let’s say your growth areas. Right. And when I see sequentially. Now this question is sequentially. If you see sequentially your growth areas revenue increase is lower than your core business revenue increase. I would have thought that others, which is basically your new growth area should have grown at a faster rate. But that hasn’t happened. Obviously it’s a very short time. It’s on sequential basis. But any thoughts why this has happened? Yeah. So it’s more, as I was mentioning, right. It’s more two vectors of growth there. The AUM of lending, AUM of the, you know, the loans you’re disbursing in the financial services vertical and the marketplace growth. Marketplace growth has continued to grow very strong. Right. The entire from a financial perspective, as you are aware, our partners have been cautious in the past two quarters. That’s led to a little bit of dampening in the growth over there. But other than that there is no other challenge. You would see that growth coming through in the subsequent quarters. Got it. Because Q4 is generally quite strong from a disbursal perspective, etc. And even from an overall movement perspective. So Q4, we’ll see the growth coming back. Because you’ve onboarded one more new partner. No, I was saying this time that second quarter growth as, as you rightly said. Can you hear me, Pratik? Sorry. Yeah, yeah, loud and clear, boss. Sorry, can you complete your question please? I couldn’t hear you. No, no, I was saying. Please go ahead. Yeah, so I was saying the Q2 for us in terms of disbursements did not see a strong uptick because of measured approach by the partners. Right. As we see into this quarter, that measured approach slowly is going away. So we expect to see better disbursement. But yes, QT was definitely measured by our partners. And sorry, my follow up was see, if you have added one new partner, he’ll get his own demand. Right. So from that perspective, is that a fair understanding? Because the new partner is a bank, etc. That’s a fair understanding. Yeah, that’s a fair understanding. But Pratik, every partner starts off very cautious. So every partner typically has a strong incubator, like a good long incubation time. Because it’s not like, like if it’s a payments business, you can take off very fast because payments make payments where you flow through, flow through pay income. There is no chance of product sector. Right. So now when a bank is onboarded, which is basically very cautious about credit quality and all of that, they typically start off slow, start off with only few areas, start off with only the better quality files, gain trust over a period of time. So I would say in lending, a partner senses us for a good six, nine months before they go really exponential and. Which is also probably a cautiously good approach. And yeah, so that’s how a launch of a partner happens always. And lastly, any update on gnss? Sorry to interrupt you. Yeah, that’s okay, fine. Come back for a follow up fair. Thank you very much. A request to all the participants, kindly restrict to two questions per participant. Next question is from the line of Devendra Badwa. Value Propeller effect. Please go ahead sir. Thank you for the opportunity. I wanted to ask that your new segment, your lord matching and vehicle plan, how they are performing and what, what is the growth coming in? Hello, I’m audible. We were not able to hear you. No, you are not audible. Can you please repeat your question? So basically I’m asking your new segment load matching and vehicle finance. What is the growth percentage coming in? What is the growth prospects in the future? Is that your question? Yes sir. What are the growth percentage coming in currently? Growth percentage. See I can’t like I mean we as we discussed last call like we as a philosophy have taken not to provide guidance but yeah, you can expect the current growth coming through and we’ll keep you posted on your incremental information if it is there more subjectively on the growth initiative. Okay so I wanted to ask a follow up question on this that what is the cost of acquisition of a customer on these segments in load matching? What is the cost of acquisition of a customer? Yes. Yes. Yeah. So basically like the way to look at is that as a company as a whole we spend about 45 lakhs in marketing across the board. Right. And other than that, which is a broad based marketing, other than that every other cost of acquisition is loaded on each of the categories. Right? Okay. So essentially the customers for cost of acquisition of truck operators for the load matching platform becomes free because I acquire a customer for fastag and customer pays me revenue on fast tag. Right. I make revenue on fast tag. After that the customer becomes free for usage across upsell cross sell for any other category. Right. So the way we are structured on how we look at customer acquisition cost on our platform is that all the categories like the categories of tolling and GPS are essentially our acquisition categories not only acquire but also deliver profits today. And these customers and they are cross sold into loads managers. Matching platform. The cost is essentially, you know, zero. Right. So that’s the philosophy in which we run this, you know, run the whole vertical. Okay, sir, thank you. This is from. Thank you. Next question is from land of Parikshit Kabra from Peakday Advisors. Please go ahead. Hi. Thank you and congratulations on a great quarter. I wanted to discuss a little bit on the fuel payments vertical which you haven’t mentioned as one of the key verticals that is giving you the great growth number in your new business verticals. I wanted to understand why that is the case. I know that the fastag tolling business has regulatory push supporting you but essentially the value proposition to the customer between the tolling business and the fuel business is very similar and the quantum is higher here. So why isn’t the fuel vertical growing as quickly? Yeah, see basically India first of all, India, if you look at the landscape of how India operates, right? And as you rightly said, we launched the fuel vertical also from perspective of a very high value proposition. And also looking at the markets, looking at the western markets where companies like Fleet Corp. Vex have done phenomenally well, Edinburgh have done phenomenally well in the fuel card sector. So Indian market structure, why is it different from those markets is that point number one, we have a oil marketing company structure where there are largely four oil marketing companies, there is only one private and three government owned. So the real intensity to fight for customers in terms of loyalty etc. Isn’t that high. That, that’s point number one. Point number two is that customers receive good amount of money in hand, in cash so they continue to still transact fuel in cash. Right? So these are two big headwinds which basically create a, you know, create, create issues in customer stickiness, right? So if you look at our fuel vertical, our fuel vertical, we make money in that fuel vertical. It’s a good vertical. It provides ample value proposition for our customers. To really solve his problems, a digital savvy customer uses very powerfully the fuel card program and becomes very sticky. And this drives humongous loyalty for our marketing partners as well because they partner with us so that their customers can be loyal through us with them. So we’ve obviously worked on this vertical continuously. What we’ve been able to come to terms with is that because of the nature of the customer we are talking about and because of the market structure what India has, we have been able to comfortably position a growth rate of 20, 25% year on year in that vertical and we are growing in that manner. And you know, and that’s a growth rate which we were, which we are expecting and that’s coming through until and unless we crack a dramatically different value proposition, which we are again obviously experimenting at this point in time. Right. Which really, you know, moves the market to adopt this offering very fast. Right. So at the moment, I will say that this month this business will grow with the modernization tailwinds of this industry. How aware a customer becomes, how digital a customer wants to transact, how, how much, you know, really, you know, you know, they want to really save money and handle their business in a much more professional way. Right. Probably the run rate of growth will get limited to this. And until. Unless we unlock something which, you know, we continuously are trying to. Right. Until. Unless something we are able to massively unlock or a government tailwind provides us that particular opportunity. Got it. All right. And my second question is from the perspective of the other expenses and the manpower costs within other expenses. So what I try to do is try to compute from what I understand the other. The manpower cost sitting on the other expenses is mostly a number towards the variable fees that you’re paying people to acquire your customers. Right. So I, what I did was I took also we have been told that you have a churn of about 15%. So I took the number of new net new additions. I took out another churn rate of 15% and added that as well. And then divided your manpower cost by the number of operators that you have added to gross number of operators, estimated gross number. And I’ve come to a number that should be your manpower cost for each customer added. Is that method more or less? Right. The number is coming to about 3,000. No, I think, I think that will be. That will have like multiple errors. Because remember that we are, you know, onboarding customers in such a way that let’s. Assuming a customer gets onboarded, you know, via marketing campaign, but only does, you know, a load board classified transaction, not only, not a lot of brokerage transaction that will get counted as a transacting customers. Right. But would not appear in the manpower cost which you are looking at, number one. Number two is that a lot of different customers get onboarded on various different services. So the LTV attribution is very different. Right. So the way to look at is I would say that we typically spend to acquire on any one of the verticals, right. Like the cost of acquisition of a customer on any one of the verticals at a truck level typically hovers in the range of like 1300, 1400 rupees like kind of number. Right. And then if you look at it, if they are doing like, if you’re acquiring them on multiple services on a month level, that number probably would be a little bit higher. But the method in which you’re doing that may not be the, you know, the right method and will. Probably have lot of errors and lot of divergence in the calculation because the churn of the platform which you are mentioning in terms of 15% is not that much because different courts have different churn. If it’s an early cohort because of stabilization on the platform will probably have a higher churn. But let’s say financially 20, 22 customer onboarded will have minimal like you know, churn on the platform. So maybe it needs to be fine tuned a bit to look at, how to look at, look at, you know, that particular number better would be to work on GTV and probably estimate how many trucks are transacting, you know, from that perspective, you know, on the truck individual, you know, category wise and then link back the manpower cost to the new customers getting acquired on those verticals. Thank you very much Parishit. I’ll request to come back for a follow up question. Please participants kindly restrict to two questions per participant. Next question is from line of Shubham Jain from NV Alpha Fund. Please go ahead. I thank you for giving me the opportunity. I want to understand a little more on the new initiatives or you know, the new segments that we’ve been speaking about. You know what, which of these segments do you think can become a large scale for us and you know, what, what is the addressable opportunity in some of these that we are trying to build? I know you mentioned about the fuel sensor that it can be as big as the telematics business, but I was leaving more towards the lowest management and the vehicle financing business. See, I mean the one question to ask is also that in terms of, you know, what are the profit pools in this market, right? Or second question to ask is how are. Sorry to interrupt you. Evolving over the period of time, right? The answer to the first question is. Yeah, can you hear me now? Yes sir, we can hear you. Can I repeat once again? Yes. So to answer this question on you know, emerging opportunities and you know, where can we see big growth, right? We can look at this question in two dimensions. First dimension is that where are the profit pools existing today and how are our initiatives geared up to, you know, get them number one. Second question is that in the market, where are profit pools evolving and do we have strategies to tap into the evolving pools? So I like, you know, because this is how our segments are also divided, right? In terms of first there are profit pools today. If you look at it, one of the biggest profit pool segment in the industry is the brokerage commission profit pool which is excess of 15 billion dollars. Because take it of 15, 20% on a 150 billion dollar kind of a pool gives you that number. The initiatives going at that are basically the entire marketplace loads vertical, which has a strategy to it, where the first strategy is to bring liquidity on the platform. Through a classified network which again pays its bills by the classified revenue. And the revenue projection of that vertical probably will be max 200 crores in probably 5, 6 years down the line on an annualized revenue basis. Underneath that vertical we have the brokerage vertical which is trying to close loop these transactions and make money out of the commission income. Where we have already launched, basically we’ve launched one city, we moved to five cities in the last quarter. Each of these operations are stabilizing. We are creating a matching engine internally. There’s a lot of product work happening, there’s a lot of R and D work happening in terms of how do you really do a very effective matching of these users and are able to close transactions which is giving benefit to the customers and operators. So this is one of the very big vectors of growth for us in the future. If you’re asking me, this is a very long drawn effort. I’ve mentioned this in the last quarter. We will, you know we as a company started off actually to crack this, but we have to take, we have to take the route of solving for truck operators and generating the platform activity so that we can crack this business vertical. Right. So this is one of the very first and foremost vectors of growth which you know, today management is investing significant amount of time to crack this vertical. Second area of growth, as we rightly mentioned is the area of, you know, vehicle finance origination where there is a $7 billion of pool origination and NIM available. Now our method of going at that market is basically the origination play, digital origination play on how can we really partner and originate loan for people? That’s a business vertical which is growing probably every six months, it’s doubling. And we spoke about that in the last earnings call, in this earnings call as well. This is basically the profit pools which basically exist today and we are going after them. Next answer to the question is basically where are the profit pools which are profit. How are profit pools moving? As you are aware we are in the telematics vertical. Under telematics, we are in the telematics business. Under telematics business, GPS is one vertical we are focusing on very heavily. Under GPS is a normal GPS and then there is AIs GPS in multiple states across the country. GPS has become mandatory for permit renewal, passing, etc. That device is basically AIs device. An AIs device is also the same device which government wants to mandate in the era of GNSS based stolen. So this is how the profit pool, essentially this is a new profit pool which is getting created and profit pool is usually moving. We are prepared with probably the lowest cost AI device in the country today, which we are certified with, right? And we have a strong installation network which we are able to like, you know, train and go after this particular opportunity. Right where the profit pool is moving, we are future ready, you know, in line with that particular profit. So a telematics opportunity, GPS opportunity for us is big and we are aligning towards it next biggest opportunity which we have already cracked. As I was mentioning to you, customers are becoming tech savvy, are modernizing, want to save money on fuel, want to say no to getting fleeced on fuel by their driver continuously. So they are adopting fuel sensor. What they need is a cost benefit. A cost vector solution in the Indian market which can work in a rugged way in the Indian market. Right. So that we are providing to. That’s again a profit pool which is not. Doesn’t exist but is getting created essentially over a period of time. And like this as I showed in the initial slide in terms of our business opportunities which we as a company are building. As you can see over here, fuel payments, vehicle finance loads platform, brokesh platform, fuels in the platform fleet docs platform. All of these are the newer verticals which we are going after. And each one of these is actually targeting tams of multi hundred million dollar tams which is, you know, which because we have a strong platform which is a strong way to push the product and we have a distribution platform which is a strong good service and sell the product, we are the best position to be able to gain lions market share range of these verticals. Got it. Thanks so much for such an elaborate answer. I had two follow up questions. In the loads management business how exactly does the brokerage model work? I get the listing and classified piece but in brokerage what is the value addition that we do? Do we ensure fulfillment? How does that exactly work? Yeah, when you look at a marketplace transaction, typically you know in any marketplace transaction you enable discovery, discovery and matchmaking. That’s one clear area where customer is trying to get a truck. If he doesn’t get a truck, his dhanda doesn’t happen that day. A trucker is trying to fill his load like fill his truck capacity because if he idles he loses on an average 3000 rupees a day. Right. So discovery matchmaking is the biggest value prop which we are providing in the classifieds as well. But when we launch brokerage we are doing this in a much more concerted with once the discovery matchmaking happens. Second area is the area of pricing, right? You price a transaction you make. Both the parties agree on one particular pricing and say that its particular price per transaction. Now in classified we don’t price the transaction. In brokerage we price a transaction. After pricing a transaction the transaction moves into the area of fulfillment. Fulfillment essentially is that quality of the truck, validation of the truck operator, validation of the driver truck reaching the loading point, it getting loaded in transit performance. Right. Truck reaching truck, unloading the goods in the right condition. Fulfillment experience we don’t provide in the classified in brokerage model we take care of the fulfillment experience. Because we have onboarded this trucker, we know which village this guy lives, we have validated, we know this trucker much better than anyone else. We know this driver much better than anyone else. We do all host of validations before we assign a truck to a particular shipper. Right. So that’s one of the biggest value proposition in this next. After you do fulfill a transaction, you create customer experience, you coordinate payments. Payments flow through us in the classified transactions. We don’t. Do payments in the brokerage transactions, payments flow through us. Trucker gets a guaranteed payment, we become the face. The one of the biggest problem for truckers in this market is that they conduct a transaction but the payment doesn’t come right. And that’s a big problem on the classifieds platform which we solve for trust through ratings and reviews. But India may ratings and reviews is not enough. It’s important that it can somebody come in between and he solved for the, you know, trust in the transaction. So in a brokerage transaction it’s blackbuck load. They see the black it’s called on the platform it’s called Blackbuck super loads. Right? So loads where we are the broker we call those load as super loads. On a super load he gets the payment guarantee. On the platform we are responsible for the money to flow through because we have validated the shipper on the other side. We have gone to him, we’ve seen where the shipper lives, run the kyc. We do few orders sense check whether this guy pays effectively the trucker properly or not. Right. That’s the payments, you know part of the whole transaction. Right. So this is the value add in brokerage where we enable a trucker fill his truck faster because loads are available online. He unloads, he books a truck immediately. Shipper books a truck in a hassle free way. Both of them have a hassle free experience on both payments because many times customer also pays and trucker runs away with the goods and the value of the freight as well. So for both sides it’s very highly valuable 10x experience to partner with a organized company to broker the deal for them. And that’s the value prop which you bring to the table. And because of a platform which is used by 20% truckers in the country we have very strong matching rates, very strong fulfillment rates and we’ve operated freight business in the past. So we are coming in with the learnings of what really goes wrong in this business and are able to get it first time right in terms of expansion, in terms of onboarding, in terms of getting the product made. Thank you very much. Shubha may request to come back for a follow up question. Participants kindly restricted to two questions per participant. Next question is from Nan of Nilesh Jain from Astute Investment Management. Please go ahead. Am I audible? Yes you are. Congratulations on an excellent set of numbers. So I had a question on the you know, telematics side, you know, on the GPS side currently we have around 7 lakh, you know active monthly truck operators and the number what she all had reported in the RHP that around 4 lakh of them, you know, have telematics devices installed, which roughly comes out to be, you know, around 60% of the users. The first question was that what, what, you know, penetration rate, you know, you expect going forward, you know, when you acquire new users. And secondly, the already the acquired user. What would be the, you know, renewal rate or retention rate, you know, for the next year when they come for renewal? What do you expect that my. That would be my first question and then I’ll ask my second question after this. Yeah, so basically, you know, as we mentioned, you know, the first question was asked, Sachin Nairi was asking the same question in terms of can you provide some visibility at least on telematics from a segmental result perspective? I think at this point in time what you can infer is that broadly the growth is trending how it was trending before. In terms of telematics devices, broadly we are in the same course. That’s answer number one in terms of growth pattern. And just to correct for you, the number mentioned there was actually devices. So the number of users is actually lesser in count because one trucker typically has 1.5, 1.6 active devices. So the number of users will be a little lesser. So you can find these details in the document. The second question which you asked along with it was basically the renewal rates we typically have. The first year renewal rate typically is roughly in the range of early 70s in terms of renewal rates. After that, typically the renewal rates are in the, you know, early 80s to late 80s on a continual basis. Okay, thank you. My second question is, you know, on the load side currently I wanted to understand, you know, what are the challenges you are facing on the demand side, that is from the shippers and on the supply side on the trucker side and you know, what are the fulfillment date Right now we have, and I mean you mentioned that, you know, we have a second model which is a freight brokerage wherein we would be, you know, getting commission out of the, you know, overall fulfillment. There’s another model, you know, which FTA follows. I mean obviously it would be for a future thing, but I just wanted to get, you know, is it feasible for India where FTA charges from the trucker side as well, you know, for selected cities where there is, you know, great demand, it charges some commission from them separately and provides them a separate, you know, add on services wherein they would get loads before they would, you know, they would get to access the loads before, when, when it. And then goes to the other users if they are not interested and they earn a good amount of money from that side of the business as well. So, so would that be, you know, in long term be applicable here as well? Yeah, so some of the functional metrics you’re asking as we mentioned, I think for the new businesses will not be providing those metrics on the question, which you have in terms of broken. Brokerage model, right? Yes. I think in FDA as you are aware, they you know, report, you know, the subscription revenue and the brokerage, you know the other line item which we are trying to talk about at the closed looping, the transaction view, the marketplace commission view. So you can assume because the FTA operates in China, a very different demography of execution because 85% of the truck operators are owner drivers. So the app location and the truck location is same. Right. In our case like 70, I would say like large part of the market, 85% of the market is basically still like you know, truck operator dependent who employs a driver. So the truck operator location on the of the app and the truck location is different. Right. So ability to really create, you know, the marketplace platform needed us to take this route. That’s point number one, point number two equivalent of the revenue which you’re mentioning. Like that is our brokerage business for India and expect to see incremental updates on that business in the subsequent quarters on our earnings call. I mean I take your point that the freight brokerage business with FTA has, is a similar one which you all also, you know, you’re also implementing. The third is the transaction commission. You know, what FTA has wherein it charges separately from the trucker, you know, apart from earning the brokerage between the shipper and you know, trucker. Yeah, no, no. When I, when I mentioned the brokerage business, when I said we make commission on the transaction, we charge from the truck operator. Okay, okay. So that part of the business you see feel that, you know, given the freight listing, you said, you know, over the 4, 5 years it will be 200 odd crores maximum. Facebook brokerage could be a large number is what you see. Obviously depends on the aggregation and all of that. The scam is very big, we need to out execute. If you are asking me when I have no answer because it’s a very nascent initiative and if you’re asking me whether we are putting all the impetus to really crack that and get that going, answer is yes, but by when and how much. I think we need to wait for at least six to eight quarters to get some understanding in that business. Thank you so much and all the best. Thank you very much. Next question is from the line of Pratik Podar from Bandhan amc. Please go ahead. Yeah, hi, thanks for taking my question again just on gnss. Any update? No update pilots are happening continuously because in terms of vehicle identification, government also wants to have a little bit of fallback arrangement as well. Have multiple mechanisms to identify the vehicles technologies. Also they’re piloting. Sorry. Can you hear me now? Yes, sir. Now we can. Please repeat. The answer once again, yeah, on GNSS based tooling, no like really incremental updates. Government obviously continues to be active in terms of pursuing this and the plan is staying the same, broadly executing on the same notification which they released a couple of quarters back. They are trying to create a fallback for, you know, vehicle identification in terms of, you know, automatic number plate recognition as well. So. Yes, so they are like, I think a lot of work is happening. They are making heavy moves more on the backend side first because that’s an area they have to prepare first, otherwise front end, you know. You know, if we start acquiring users on the new mechanism, backend has to be solid. So backend work is the toll charger work which will calculate the distance, which will map the toll plazas, do the lat longs and like you know, send on a real time basis really how much money to be deducted, etc. That work is on a priority happening, but materially we don’t have any updates on that. Got it. And lastly you, you called out 4,000 rupees of cost cutting or localization efforts for the fuel sensor. Just wanted to check is there more room to get this down? And at 11,000 are you making any money or it’s only by a subscription that you make? Yeah, at between 10 to 11,000 we will be in money in the first sale. What have you done? Like in the sense you assume you’ve got 4,000 rupees down, can you get it more down? Is there a room for you to localize this even more? No, no, we’ve got down the sale price by 4,000. Pratik. Yeah, I understand, yeah. The cost, can you get it down? Yeah, I mean, because right now we are only talking numbers like mere thousands and as soon as we hit 10,000, right, we can definitely get more because if I, if I, if I, if I remember I had articulated the story that on GPS our first procurement was at like 2200. Right. We kept going down, kept going down. Now the numbers are like you know, close to one fourth of that. Right. So I think Telematic Fuel Sensor also will broadly have the same story because I think manufacturing really works its charm at scale. We are now pretty much upscale. And as we continue to grow so broadly to a given estimate, at whatever scale we’re doing right now, if we grow by 6x in the monthly run rate of sale, we will be able to hit the GPS numbers broadly at that scale we probably can have one more price point emerging. And yeah, we should. But yes, even with the current plan on procurement the device, which we’ll be able to do, we will be in money in the first year. Sure. Thanks. Thank you very much. Ladies and gentlemen, we’ll take that as a last question. I’ll now hand the conference over to Mr. Rajesh Yapaji for closing comments. Yeah, I think, you know, thank you everyone for joining and you know, listening in and asking very good questions. I think last quarter again to repeat, I think it was a good result. More importantly, the whole core is being cemented with more certainty in revenues in terms of the fasttrack mdr, in terms of new initiatives going live and in terms of operating leverage really getting showcased in a magnified way. And by being able to deliver 9 month 85 crores, I think it’s a good start to this whole financial year. And touchwood, we just expect that we continue to execute on the same lines and if nothing materially changes in the external environment, we should be able to continue to execute in these lines into the coming years as well. Because majority of our businesses which today provide majority of the profits and majority of the revenues are largely India centric growth execution because India is growing, truckers are growing. We build products very special customized for them. We’ve built servicing networks very customized for them. So I think whatever we’re doing I think should continue to happen as we keep executing into the next quarters. Thank you so much. And as we promised last quarter, we will not really be doing the earnings call in a haphazard way because last time we gave you probably 5, 10 minutes before the earnings call we approved the results. This time I hope you guys had good time to go through it and ask questions. So we are improving our internal cadence in all of this. We are new to this but I think in few quarters we should have the similar discipline which you guys experience with your other public market company portfolios. And you know, we will get there with the discipline and rigor what is needed to operate a public company. We’re learning and in the journey. Thank you so much for joining and look forward to meeting you. The next caller. Thank you very much on behalf of Zynga Logistics Solutions Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.