Zinka Logistics Solutions Ltd (NSE: BLACKBUCK) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Rajesh Kumar Naidu Yabaji — Chairman, Managing Director, Chief Executive Officer
Satyakam Naik — Chief Financial Officer
Analysts:
Ankur Pant — Analyst
Sachin Dixit — Analyst
Abhishek — Analyst
Manish Poddar — Analyst
Nilesh Jain — Analyst
Lokesh Manik — Analyst
Gaurav Malhotra — Analyst
Nidhesh Jain — Analyst
Deepak Podar — Analyst
Presentation:
Operator
Ladies and gentlemen, 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. Please note that a copy of disclosure is available on the Investor Relations 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 construed 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 corporate material of Zinka Logistics Solutions Limited and cannot be copied, re-broadcasted, or attributed in the PR media without specific and written consent of the company.
I now hand the conference over to Mr. Ankur Pant from IIFL Capital. Thank you and over to you, Mr. Pant.
Ankur Pant — Analyst
Hi. Good evening, everyone. On behalf of IIFL Capital, I welcome you all to the Q4 FY ’25 Earnings Call of Zinka Logistics Solutions Limited. To give you an in-depth understanding of the and answer all your queries, we have from the management team Mr. Rajesh Kumar Naidu Yabaji, CMD and CEO; and Mr. Satyakam Naik, CFO.
With this, I would hand over the call to Mr. Rajesh. Thank you. Over to you, Rajesh.
Rajesh Kumar Naidu Yabaji — Chairman, Managing Director, Chief Executive Officer
Thank you so much, Ankur. Good evening everyone. Welcome to our third earnings call and also the summary of the last whole financial year. Am I audible? Can the IIFL team confirm, please?
Operator
Yes sir, you are audible. Loud and clear.
Rajesh Kumar Naidu Yabaji — Chairman, Managing Director, Chief Executive Officer
So first, giving a snippet of the whole financial year which went by. This is the third earnings call. Q4 ’25 is what we will be presenting and the full year FY ’25 numbers. We did gross revenues of totally INR462 crores last financial year, which is a growth of roughly about 46% on a year-on-year basis. Continuing to operate in the dimension of platform-led revenues, software-led revenues which have high contribution margin profile; our contribution margin profile continues to be steady in the range of 93%, 94%. We made INR429 crores in contribution margin in the last financial year, which is a 49% growth on a year-on-year basis, which led to delivering an adjusted EBITDA of close to about INR139 crores in the last financial year. Adjusted EBITDA does not include basically the ESOP costs as everything essentially gets factored and that’s roughly close to about 10 times growth over the last financial year.
Last financial year when we went public and filed the DRHP, that number was close to INR13 crores, INR13.5 crores and that number today is roughly closer to INR139 crores. These are revenue numbers which in our business model typically lags the platform activity. As you can see, we have close to — in the last full financial year close to about 7.2 lakh transacting customers, which is roughly 20% of India is what transacts with us on a yearly basis, which grew at roughly about 21% on a year-on-year basis. Users continue to deepen and users continue to use more services. Close to 3.5 lakh users are using more than or equal to two services, which shows the love for services, deeper penetration, and cross-sell, up-sell which is happening; which is roughly a growth of roughly about 32% year-on-year on a customer basis.
Payment, which is one of our leading verticals of revenues and large part of that comes from tolling, continues to grow at a very healthy pace which has grown at about 34% year-on-year and we have done close to INR23,000 crores of payments in the last financial year. Committing into our strategy, which I think has been consistent over the last four years of execution, we as a company continue to grow profitably. At the same time not at all compromising on aggressively investing into problem solving for our customers, which will unlock new growth opportunities as we keep moving along. Taking a step back and reflecting on what really the company is trying to do. As all of you know, we are executing in a space of trucking in the country. Trucking is the majority mode of execution of goods transportation. It’s close to about a $180 billion freight industry, which is growing at about 8%, 9% CAGR over the past five years.
Largely operated by small and medium scale truck operators, 75% of these trucks are owned by people who own less than five trucks. And the universe of India is roughly 12.5 million trucks owned by 3.5 million truck operators. Each and every area in the journey of a truck operator when he enters the business right from buying a truck to financing it to getting loads to payments to compliance and to maintenance; the industry is basically layered by intermediaries. Industry is largely inefficient and has a huge room for improvement both from predictability of customer experience perspective, cost perspective, expansion of business perspective. We believe that the macro problem of inefficient logistics costs and a deep bottleneck logistics ecosystem for the country where Indian logistics costs are 14 percentage points, 16 percentage points; most of them are basically anchored in the microeconomic problem of how a truck operator operates in this industry.
So BlackBuck started off as a company to really look at how can we build a new avatar of trucking in the country, really unlocking that, disrupting this industry. That particular vision we believe can be realized by really unlocking and really making truck operators’ lives seamless and that’s the midterm vision; probably a four, five year vision; which we’ll be essentially executing, which will pave way for us to play a much larger role at transforming trucking for the country. Moving forward, that broader view into what is the crux of the strategy which is delivering revenues, delivering profitability, building BlackBuck from strength to strength. We spoke about this in the last two earnings calls also and we’ll keep iterating this. There are three key sort of dimensions in which most of the people in the company work in. The first key dimension is essentially offerings. Offerings is nothing but problem solving, solving for every pain point of a truck operator.
Every pain point probably may not be commercially viable today, but then gets viable like in few years or a few quarters. Like for example, fuel sensor was one of the products which we probably first introduced or first fuel sensor we installed in the country — in our company was in the year 2018.
But the whole economics in terms of the cost of a fuel sensor, in terms of what money a truck operator was willing to pay at that point in time, did not make that business viable. But we continue to iterate on that particular business model and that business model became viable over the last two quarters and we are scaling really well in that business model. So that’s the role of offerings dimension where the goal of those teams is to basically take a problem of a customer and try to keep solving for it, try to create customer value, try to create a commercially viable proposition. And today, obviously all these offerings are live.
We do tolling, we do vehicle tracking, we do fuel payments, we do vehicle finance, we enable truckers to fill their return hauls and get them more efficient, we have a fuel sensor platform, we’ve got FleetDock. Like this, there are multiple other features under development, which we keep working on and keep launching. All these offerings sit on our platform. Our platform is nothing but the customer app on the front-end side and huge number of APIs and services which we’ve built inside the BlackBuck platform. This platform is basically probably the storehouse of most of the value what the company today stands for, which is basically having 7.7 lakh transacting customers in the last quarter. The earlier number of 7.2 I presented, that was the annual monthly transacting average. This number is only the last quarter’s average. That is 7.7 lakh customers, which is growing at close to 20% on a year-on-year basis and we are the top-of-the-mind recall when you say digital truck operators.
The usage keeps deepening. So the usage is 44 minutes daily app usage by the truck operators. So that’s the platform which continues to scale, continues to deepen. And what is really important about this platform is that the launch of a newer offering essentially gets penetrated across any trucker across the country in a very low cost way and that’s how new verticals keep getting launched. Powering this platform is the most important vector for us, is the distribution workforce all across the country. Truckers have a persona which are largely middle-aged, 35 to 50 years old, largely uneducated. So how do we really reach to them and service them? That’s the story about distribution. So we have a 10,000 people touchpoint network all across the country. We have presence in 85% of the districts today and that’s a very wide reach. Within this touchpoint network, there are technicians, there are channel partners, there are our own workforce, there are agents standing at toll plazas.
There are varied degree of people who typically sell to a customer or service the customer. So this is our revenue delivery sort of engine. We create offerings, offerings are launched on our platform, platform continues to get stronger. Newer offerings launching become easier and aided by a very seamless, efficient, low cost distribution, the widest distribution network coverage to all truck operators, which is one of the biggest modes for us in this business. Now moving into giving an update on what happened last quarter and what happened in the whole financial year. These are the key KPIs, which we talked about in the previous earnings call as well. Starting with the first one, which is the platform metric in terms of what is the monthly transacting truck operators on the platform? As I mentioned, that’s close to 7.7 lakhs, which was 6.5 lakhs last year, which is growth of about close to 18% on a year-on-year basis, which on the financial year basis has grown from close to 6 lakhs to 7.22 lakhs, which is roughly 21% growth.
Wherever there is a FY narration, I will narrate it separately. If not, I will continue on the quarter-on-quarter basis. Then similar to that, the monthly transacting users using at least two services grew about close to 27% on a year-on-year basis. Time spent on the app grew by close to about 9%, which stands close to about 44 minutes is what an average customer is spending time on the platform. GTV on payments, last year same quarter we did close to INR5,000 crores, which grew to about close to INR6,600 crores this quarter, which is a growth of about 33%. And on the whole financial year grew from INR17,300 crores to INR24,000 crores, which is a growth of 35%. Synonymous to that, the payment transactions will flow with a synonymous thought process. Coming to gross revenues. In this quarter we did close to INR137 crores of gross revenues, which is a growth of about 38% on a quarter-on-quarter basis.
In the full financial year, as I presented before, it is INR462 crores on the financial year ’25, which is growth of about 46% from the last financial year. Revenue from continuing operations did a growth of about 31% and on an overall financial year was roughly about 44%. Revenue from growth businesses, which removes the core verticals of tolling and vehicle tracking, that grew at roughly about 90% on a year-on-year basis and it grew about close to 50% on a year-on-year basis. Moving forward, contribution margin profile and synonymous to that, the contribution percentage from growth businesses increased from roughly 11.5% to 13% in this particular quarter. Contribution margin profile, again similar growth frontier, roughly 40% more from a quarter-on-quarter basis and 49% from a year-on-year basis. Contribution margin profile continues to stay steady as we discussed in terms of the nature of revenues continues to remain same. Last year same quarter was 92%, this year is about close to 93%.
All of this brings us to delivering an adjusted EBITDA in this quarter of roughly INR54 crores, which was in the same quarter last year roughly about INR17 crores, which is roughly a 2.2x growth. And more notably, the full year numbers because last year was the year where probably we broke even in the middle of the year. From a financial year perspective, we delivered INR13.5 crores in adjusted EBITDA in FY ’24, which grew to INR139 crores in FY ’25, which is again a testimony to the quality of revenues and the operating leverage which we’ve been able to deliver as a company. Furthermore, going deeper into the adjusted EBITDA metrics. If we remove the other income part, which is largely the interest income, we delivered close to about INR39 crores of adjusted EBITDA this quarter, which was in the last year INR10.5 crores, which is again a growth of close to 3 times. But more notably, in the last financial year removing interest income, we were basically negative INR6 crores, which has jumped to now INR103 crores.
That’s a good performance. Largely, most of this performance was locked in probably, let’s say, few quarters — few years back because of the delayed nature of the profitability profile of our business where we do most of the sales and acquisition and incur costs in this quarter. And the revenue compounds because those cohorts of customers not only continue to give us revenue, but also continue to expand and that’s the reason for the operating leverage. Summarizing these numbers into more narration in terms of what really happened in the last quarter and the last year. As we discussed in numbers, 37% growth in the last quarter year on year and FY ’25 46% growth. But if you double click into the core businesses of tolling and vehicle tracking, one of the good milestones for us was we’ve received the in-principle approval for the PPI license in the last quarter and it will take us probably few quarters to operationalize that.
This will really help us gain an end-to-end ownership of the payment stack, which will enable us to deliver a very superior customer experience. Definitely some economics will also improve over the period of time. But the most important thing is that this is one of the core business verticals for us. This gives us end-to-end ownership in this particular business. Second area, area of telematics, which is the second largest contributor to revenue for us, and in that there is a device specification called as AIS device, which is basically one of the prevailing device wherever the government mandations typically happen. There we’ve developed the new hardware from scratch, which has got ICAT certified, so that will be a BlackBuck device from an ownership perspective end-to-end. So that we’ve been able to establish over the whole last year supply chain in terms of sourcing, manufacturing, components, etc., which not only has helped us improve customer experience.
But probably makes us probably the lowest cost device manufacturer and procurer in the country, which gives us a very strong price advantage, which will help us build scale at a much faster pace and capture a much higher market share. Moving into the growth businesses. There notably there are three businesses which typically have been driving a large part of the growth. One part is the fuel sensor, which we gave an update last quarter that that vertical has broken out. The last quarter we were able to double the sales from the previous quarter, which is a good milestone. There we are basically fixing continuously the whole product experience, fixing the whole installation experience because it’s a very involved product from the perspective of customer. Second vertical, which is the used PV loan vertical. In that vertical, we continue to scale with our partners. We’ve extended this particular — last financial year we used to operate more close to about 50 hubs.
Here we have doubled the hubs in the last financial year and we are offering this service in close to 100 hubs. This vertical continues to scale. Although given the whole macro environment of last year, our partners were going a bit slower in terms of disbursements so we definitely did not see the kind of scale we thought we would foresee, but then obviously there’s good growth in this particular segment and being in the lending space for our partners, it’s better that they grow slower with a very high quality portfolio quality. I think that’s more important here than really blitzscaling on a growth perspective. The third biggest vertical for us is the loads vertical where, as many of you know, that we started close looping the loads, which is going to be the bigger future for the loads business. There that business continues to take shape. Obviously that business because it is at a very smaller scale, they’re growing in multiples from a quarter-on-quarter perspective.
But there the biggest focus today is on product development. We’ve built the whole end-to-end fulfillment stack, the payment stack, the customer experience stack. Most of the work happening there is to really deliver strong customer experience to our truck operators who are using the platform in terms of payments, in terms of on-time fulfillment, and all of that. And most important there is how do we really create a playbook for scale? Because availability of supply for BlackBuck is not a challenge. We are present in very high market shares anywhere in the range of 15% to 70% depending on state to state. So scaling that playbook will not be a big challenge, but I think creation of the playbook is the most important thing there and that’s where most of our eyes and attention is focused at this point in time. Going into platform metrics, I think steady growth over there. As we discussed, monthly customers are growing, payments GTV is growing, time spent by the users is growing on a year-on-year basis.
Thirdly, the profitability. As we read out the narration, adjusted EBITDA in the quarter on a year-on-year basis increased by close to about INR37 crores and in the whole financial year, we created a shift in roughly close to INR125 crores in the overall adjusted EBITDA. That’s again the testimony to the quality of the business model we’ve been operating and continue to operate. As always, we’ve explained to you the reason for — explained to you using the slide, the context in operating leverage and the quality of operating leverage we’ve been having. So if you can see from a revenues perspective, on a year-on-year basis we grew about close to INR37.5 crores and most of that revenue — most of that gross revenue converted into adjusted EBITDA, which shows the leverage from an operations perspective. So 99% is the efficiency there. Then when you look at it from sequential perspective, we’ve grown roughly close to INR14 crores and out of the INR14 crores, INR12 crores has flown into EBITDA, which is about 84%.
So again reiterating, the drivers of operating leverage are that recurring — most of the revenues are recurring in nature, which means users have acquired let’s say in financial year 2021. Those revenues continue and we don’t really have to incur any costs to gather those revenues every year. So hence, those revenue profiles continue. And because most of these revenues are platform in nature in terms of subscription, in terms of net commission based revenues, it’s a high contribution margin profile, and it’s a very strong flow-through from revenue to contribution. And as we’ve always discussed, the user retention, typically three to four years; after three to four years, flatline, we hardly lose users because of the quality of products we build and users retain and our revenue retention rates, as disclosed in the DRHP as well, as you can see, have been very, very strong. So that drives the whole operating leverage.
And obviously to add more revenues, we don’t really spend any money from the perspective of asset deployments with the asset-light business and hence the scalability of the business model as well. So basically summarizing in one line, platform — Blackbuck platform net revenues are driving a strong P&L for us and which drives strong operating leverage. Giving a snapshot of the quarterly P&L as you’ve seen last quarter as well. There’s a shift in P&L from negative INR6 crores in Q1 of 2024, steadily increasing because we are having a consistent revenue growth and most of the revenue growth and efficiency of 80% to 90% has been flowing back into bottom line and that’s resulting in quarter-on-quarter profitability — sequential profitability, year-on-year profitability continue to compound. And where we stand today is our adjusted EBITDA to revenue. This percentage of adjusted EBITDA has already reached close to 40%, which again is basically the quality of revenues which is helping us reach here.
Giving a more snapshot on — accounting snapshot on what PAT looks like and the waterfall from revenue to PAT. Revenue from operations, as we discussed, INR122 crores moving into with other income — total income being INR137 crores with direct costs largely growing lower than the revenue growth rate because of the nature of optimizations in place. That has grown about roughly 16%, which led to increase in the overall contribution margin to about INR127 crores, which is about close to 40% growth on a year-on-year basis. And total expenses, as you can see on a year-on-year basis, continue to stay steady, continue to stay flat. Because as you know that we’ve achieved critical scale in terms of our platform where 20% of India’s users transact on a monthly basis and in the verticals we operate where we directly acquire customers for revenue. Most of our investments in terms of the scale of investments have reached, which means our penetration levels in terms of PIN codes are there.
So we don’t foresee, even in the future, massive expansion in our sales and marketing budgets and that’s the reason why you can see that there is marginal or no increase — there is no increase in our total expenses, which are steady at INR83 crores at a quarter level on a year-on-year basis, which helped us create an adjusted EBITDA of INR54 crores. And if you remove the other income, which is largely the interest income, the adjusted EBITDA essentially becomes INR39 crores. And another important metric, which is basically PBT, where you basically add the cost of ESOP, but you exclude exceptional item and you exclude the discontinued operations, which is probably good — probably a much better quality of metric from a company’s profitability perspective. That’s trending close to about INR42 crores, which largely in a normal quarter would have mimicked the PAT.
But in this quarter because it’s the first time we have delivered PAT, there is an accounting transaction where the profits, the losses, the carry-forward losses of the past basically have been accounted in the — deferred tax has been recognized on the balance sheet and credit to the P&L has come through. Sorry, I was just taking Satya’s help to narrate that. That’s why you see a non-usual PAT getting created of INR280 crores. But largely, the PBT number is more where we can get anchored where the PAT reflection is going to be, which is obviously from a financial year perspective, roughly at close to INR91 crores. If you look at adjusted EBITDA for the whole financial year, which is roughly INR103 crores, and if you remove ESOP charges of the last year, that comes to about INR91 crores. And for the future ESOP costs, there is a schedule provided by our team in terms of what you can expect in the future. Of all the granted ESOPs as on date, you can see the schedule of those charges.
So yes, that’s at a summary level what the profitability profile looks like, the waterfall of profitability. Now from a walkthrough from PAT to adjusted EBITDA, fairly simple. Profit after tax, roughly about INR280 crores. If you add back the profit and loss from the discontinued operations and then the income tax expense which we talked about, and the depreciation, amortization and the ESOP-based cost, etc; you arrive at the adjusted EBITDA of INR54 crores and other income of INR15 crores. You basically get to adjusted EBITDA excluding other income of INR40 crores. So that’s a simple walkthrough.
And that’s all from our side. Would be happy to take questions.
Questions and Answers:
Operator
Thank you very much. We’ll now begin with the question-and-answer session. [Operator Instructions] The first question is from line of Sachin Dixit from JM Financial. Please go ahead.
Sachin Dixit
Yes, hi. Congrats Rajesh and team on a great set of results. And I had a couple of questions. My first question in regards to — sorry, there’s a lot of background noise. Can you hear me? Hello, can you hear me?
Rajesh Kumar Naidu Yabaji
Now it is okay.
Satyakam Naik
Now we can hear you. Sachin, you repeat that please?
Sachin Dixit
Great. So basically my first question is on telematics side. So if we think from a truck operator’s angle and obviously during the DRHP and all, you have highlighted why a GPS device helps a truck operator and all. But other than regulatory requirement, do you — like what value proposition does a typical truck operator see in telematics device? Are they willingly paying for that or only when regulatory push comes that they are willing to pay for that? And similar in terms of fuel sensor, how do you think of the value proposition from a truck operator’s angle versus what you see?
Rajesh Kumar Naidu Yabaji
Yeah. See, basically telematics at an overall level in the Indian context, truck operators — Indian context like India is a land of first of all truck owners who employ drivers who drive the truck, which is the largest majority. Now one of the biggest problems for a truck operator is to have control over the truck and the driver when the truck is essentially not in front of his eyes and doing long distance trips. So today, now if you segregate telematics into two parts, one is vehicle tracking and second aspect is basically fuel sensor. Vehicle tracking, the biggest value prop for a customer is driver management in terms of where the driver is, how much distance has he traveled today, what speed has he traveled today, speed alerts in terms of over speeding, etc. Second biggest value proposition is that when he’s filling the load for a particular customer, the customer’s anxiety in terms of where the truck is, will it reach on time? You have said that it will reach by 5pm, I can’t see it anywhere, like where is it?
He says it’s two hours, but then he doesn’t believe him. So in terms of sharing the information on the whole on time delivery. The third part is a little bit because let’s say our product is a very low ARPU product in terms of the cost. So if you look at in terms of the driver in terms of truck — like truck preventive health maintenance, driver — like driver’s driving behavior in terms of harsh acceleration, harsh braking is basically what gets captured in our device, which gives the indicator of quality of driving for the truck owner. So essentially everything about like gaining control over operations and the driver management when he’s sitting remotely in his own village, but the truck essentially is flying all across the country is the biggest value prop. Along with this, there is obviously a more risk use case where we also provide a facility to remotely turn off or on the truck. Assuming that the driver is drunk and driving and the owner has lost control on him, he would like want to turn off the truck, he can do that remotely.
Essentially vehicle tracking solution is all about this. Now within the vehicle tracking, today roughly about 25% plus plus of the devices we sell are of AIS standards. Most of these devices are largely driven by mandation because the ARPU of the AIS devices, the cost which the truck operator pays for the AIS devices, is also on a higher level. So answering your question, value prop is strongly driver management led and customer experience led in terms of delivery of goods. Under that, there is 25% of the device sales are driven by mandations. Those mandations are again state specific from a mining area perspective, passing perspective, depending on different needs which the government wants to govern in terms of vehicle movement. So today, summarizing today it’s a larger use case, which a truck owner wants to use a device to manage his operations effectively. Now this is the whole vehicle tracking part of it.
Fuel sensor part of it is completely to do with his need. Fuel is the largest expense for a truck operator. If you take a long haul truck operator, it will anywhere range between 45% to 60% will be the expense of fuel. Now the biggest fights between an owner and a driver happens is basically on theft of fuel and because fuel is the largest expense, number one. Number two is that lot of fuel stations — like lot of fuel stations are non-standardized so you also don’t know when you’re filling fuel whether you’re getting 100 liters — when you pay for 100 liters, are you getting 100 liters or not. So fuel sensor is all about being able to keep track of how much did I fill fuel. When you have done 100 kilometers, how much fuel did you consume. Any sensitivity on a threshold of probably few liters, maybe 4 liters, 5 liters gets detected by the fuel sensor which we provide. So the whole use case is with paranoia on really managing fuel pilferage effectively for the truck operator is what — is why they pay for fuel sensor.
Sachin Dixit
Because Rajesh, I think basically one thing that I wanted here was like I understand what value proposition you are providing, but from truck operators angle why exactly is he actually using that? Are they really able to manage? For example some truck operators that we speak to, they are like we know driver is deceiving us on the amount of fuel that they are buying and selling and removing it from the tank and all those things. So does the truck operator really believe that they can actually control it by having these tracking devices or this is more of some of them are maybe taking it?
Rajesh Kumar Naidu Yabaji
Yes. So this is a value proposition we provide because a truck owner wants it. See, earlier we were selling this product in the ARPU range of INR15,000 to INR25,000. It was not getting sold because it’s a very high value product for him. But then when we were able to really re-engineer the device and were able to rework on the cost of the device and really bring down the price, the whole product has taken off. So it’s a product we’ve built because there was a need and there was an ask by the truck operators.
Sachin Dixit
Understood. Thank you. My second question is that there are some market chatter that one of your telematics peers is looking to also enter the profit pools that you have showed thanks to getting listed and showing those brilliant numbers. What is your view on that? Why do you think they will have a play or might not have a play?
Rajesh Kumar Naidu Yabaji
See, basically I mean sorry, but like I think I am not in the information on which name you’re referring to. But at the end of the day, as I mentioned in the earlier part of the presentation in terms of the three capabilities on offerings, distribution — offering platform and distribution. The only reason why we are able to deliver our revenue profile and profitability profile is by really out-investing in those areas over the last five years. And we continue to deliver the best in-class product experience for the customers, which we’ve built by hours of research and hours of hard work and I think it’s obviously more competition. This space is always better because truckers is the community where there are very few people who are hand-holding them and really creating very good solutions for them. And we believe if there are more players, it will really help build a whole space very fast because the space is hardly lubricated and if more people can do more better work, better for the industry, probably we can do it much faster.
Sachin Dixit
Sure, Rajesh. One housekeeping question, if I can quickly squeeze in. D&A expense seems to have jumped quite sharply. Just explain the nature of it and I’ll get back to the Q&A and all the best for FY26?
Rajesh Kumar Naidu Yabaji
Thank you. D&A expense has jumped very quickly.
Satyakam Naik
You mean other expenses, Sachin?
Sachin Dixit
Sir, I’m talking about depreciation only?
Satyakam Naik
Yeah, depreciation was on account of it’s a one-time so we did a physical verification like we do at the end of the year and there were some CPS devices where we had to take some accelerated depreciation. Generally it should stay in the range of the INR8 crores to INR10 crores as we move forward.
Sachin Dixit
Got it. Thank you and all the best for FY ’26.
Operator
Thank you. Next question is from the line of Abhishek from ICICI Securities. Please go ahead.
Abhishek
Hey, congratulations on a great set of numbers. Just a couple of questions from my side. Am I audible? There is a lot of noise.
Rajesh Kumar Naidu Yabaji
Yes, we can hear you.
Abhishek
Great. Quickly so from this PPI license, what is the upside that you see in terms of take rates for the business?
Rajesh Kumar Naidu Yabaji
Can you please repeat your question? Sorry, we couldn’t hear you.
Abhishek
Because of this PPI license coming in, what is the upside in terms of take rate that you’ll be able to get?
Rajesh Kumar Naidu Yabaji
Yeah. So basically of the total revenue pool which is out there and whenever we do a transaction, of the 100, we typically keep close to about 80 and the remaining is with the partners. So that upside you would get, but we don’t foresee that upside coming in automatically because we have a huge customer base and we will continue to be working with partners. This is basically a license which we’ll use to probably innovate a bit for the customers and probably to improve a bit of customer experience, but you would not see the improvement in the take rates immediately.
Abhishek
Got it. With regards to the telematics device, are you actually looking at manufacturing it or are you sourcing it from outside somewhere?
Rajesh Kumar Naidu Yabaji
Yeah. We typically have a full control on the bomb. We have the control on the design. We own the design as well. And we typically do a lot of like the recent product which we’ve created, this was a project with a supplier in China for a good long period and we typically invest in the lab and we sort of create the product. We obviously do the same thing in India as well. So we’ve got suppliers across India and China as well. So nowhere we are manufacturing the product. We don’t foresee the value add from a manufacturing would really justify getting into that core activity. But in terms of firmware level coding, in terms of really bomb, in terms of what device to build, in terms of really keeping the whole information and knowledge in terms of how to really get the device done, that we keep in-house. But then getting it done, we typically depend on our partners outside from a manufacturing standpoint.
Abhishek
Understood. Now for both the tolling business and the telematics business, what is the risk that the original equipment manufacturers will start installing these things into their products and more as things go on and is that a risk to your business?
Rajesh Kumar Naidu Yabaji
Yeah. So OEMs like not only in like, let’s say, as you rightly said payments and telematics, not only in any of these; they have generally been providing this not only now, over the last five years. On tolling, the most important thing to note is that first of all tolling when it happened, it was a stock business. New vehicles obviously kept coming over the period of time, but remember that anyone who’s buying a new vehicle typically is a large fleet operator who has like more than 10 trucks. And if 10 fleet is operating with, let’s say, provider like us; when he’s buying extra two trucks, it’s very hard to have a different provider for that. So that typically ensures that in tolling, every new vehicle which is being bought, our relevant market share typically flows to us. So there we don’t see any threat at all.
And obviously the kind of distribution we have, we cover the new dealerships, we cover all the truck operators. So we have a very strong sort of presence there. Now in terms of telematics, again not only now; over the last 10 years, telematics devices were being provided by the OEM continuously. OEMs operate at a particular price point which is generally very high and that provides also very, very high reliability of the product. We as a company have operated at different price points in terms of driving growth in telematics categories, but those high price points never work. Roughly our price point when we first sell a device, including the device and the first year subscription, roughly cost us about INR3,500 for the full year. Now OEMs would operate at multiples of price point to that. So we have a very strong price point advantage.
Second is in terms of the kind of product this is, in terms of the kind of serviceability needs to be provided; we’ve got like high — very high number of technicians who are deployed all across the country. So our focus in terms of running this product is like very high, which typically we end up providing very high customer experience. Third point, again same as tolling like because majority of these large fleet operators operate on our telematics devices, whenever they buy a new device, they typically would want to fit with the same platform as they have been using. So we’ve never seen any kind of a resistance with a new truck versus an old truck. Our sales have been pretty much secular across any kind of a customer footprint.
Abhishek
Understood. Now with regards to the loads brokerage business so that has been tried quite a few times in the past as well. What gives you the confidence that this time what you are trying to do will probably work better?
Rajesh Kumar Naidu Yabaji
Yeah. So basically explaining the loads at a very broad level. Loads industry in India is a $200 billion industry, $180 billion to $200 billion industry. Of that; if you remove part truck load, express, e-commerce, like you remove everything which is very specialized in nature, over dimensional cargo and many different, many of those industries; you’re left with a TAM of like anywhere in the range of $120 billion, which typically operates in an open market load scenario. We as a company have been trying to address that particular business. That’s the broad sort of background. Number two is that the way this industry operates is that the load typically originates from enterprises and SMBs. SMBs probably originate 60% of the overall loads and enterprises originate about 40%. And as the industry fragmentation of supply side stays same, 70% of the trucks owned by less than five truck operators and the industry has two layers of intermediaries.
One layer is the small broker layer. There are about 2.5 lakh brokers in the whole country who are organizing supply. Other layer is basically the bigger broker layer, which is basically organizing the demand. Roughly about 10,000, 15,000 of those guys exist. As you rightly asked, there are various attempts by BlackBuck in this industry to solve the loads marketplace problems. The first product market fit of BlackBuck was basically the enterprise kind of a model where we were like any other big broker and were trying to crack the whole marketplace. But the biggest problem we were not able to crack that business was because we never had a highly scaled supply. Number two, these enterprises work on working capital, which is a very hard thing to manage because in India nobody pays on time. They say it’s 30 days, 40 days, but the money comes back in like 120 days. So it was an unscalable model.
Whenever we scaled immensely, whenever we scaled exponentially, we lost more money; that was a model which we did not continue. That is why if you saw, we pivoted towards the whole strategy of saying that we need to solve supply. That’s what as I opened up my presentation, I was explaining that we need to first organize truck operators lives around them. So that was the first foray back in 2018-’19. We basically pivoted into a strategy of saying that let’s build fleet management services for truckers. That’s how we organized payments, telematics, etc; which basically became acquisition engines. Not only acquisition, are also delivering today’s revenues and profits. So those are acquisition engines and when we actually built closer to 2 lakhs to 2.5 lakh truck operators base, that’s when we launched the classifieds version of the loads. Classifieds created the new go-to-market, which is basically a very technology-led opportunity which paved way into launching loads.
And as you can see in the DRHP, in the last financial year we did close to about 2.2 million loads. This year the number of loads we have done close to 3.1 million, 3.2 million loads. So that business is scaling continuously. But in Classifieds because it’s a verticalized classifieds platform, delivering high trust and delivering strong customer experience is really not possible. So the newer, the entire evolution of classifieds into brokerage is what you are seeing this year and that’s the center stone — cornerstone of the strategy for this year where all these classifieds. Basically wherever our ability to close loads is higher, wherever we have more amount of supply and more obviously closer to home Bangalore, we started the brokerage model where we don’t earn only by subscription. Let’s say on the classifieds model, we only earn INR12 on the customer side, on the shipper side and we earn about INR20, INR25 on the trucker side from a load perspective.
But in terms of brokerage, you earn anywhere in the range of like long-term steady state commission rates are going to be higher. But even now we are earning between 6% to 8% on a transaction basis, right? So that’s the whole flip and we believe that by being the most dominant player on the supply side, by having the highest mindshare and the trust of truckers who are already trusting us with payments, which means they are paying to us so obviously they will trust us a lot when we will be paying to them in the brokerage transaction. We believe this is the marketplace problem through — marketplace approach through which we would be able to really solve the intercity trucking problem.
Operator
Thank you, Abhishek. I’ll request you to come back for a follow-up question, please. Thank you. [Operator Instructions] Next question is from the line of Manish Poddar from Invesco Asset Management. Please go ahead.
Manish Poddar
Yeah. Hi, thanks for doing the call. I have three questions. The first was regarding this telematics…
Operator
Manish, sorry to interrupt you, we are losing your audio. Can you please come in a better reception area, please?
Manish Poddar
Yeah, is this much — is this any better?
Operator
Yes, please go ahead.
Manish Poddar
Yeah. So Rajesh, first one if you can help me understand, let’s say in this telematics, now let’s say what is the cost of making the device? And let’s say when you sell it with a bundle, let’s say the fuel sensor, what is the pricing like? And in the same stride, in your understanding, what would our market share be in telematics?
Rajesh Kumar Naidu Yabaji
Yeah. So basically on the cost side, Manish, I think it will be very difficult for us to disclose that because this competitive information, right, so I will not comment on that. In terms of market share, we believe that in terms of the total telematics devices, which are sold in a — on a monthly basis, I think we are probably able to capture roughly close to about 30% of those devices. This is on the vehicle tracking side. And on the fuel sensor side, also probably this will be a bit more, probably more than the 40%; 40%, 45% range.
Manish Poddar
Cumulatively, what is the price now? Let’s say if one takes the telematics with the fuel sensor, what is the combo cost?
Rajesh Kumar Naidu Yabaji
What is the…?
Manish Poddar
What is the combo cost? Let’s say, has that come down is what I’m trying to understand.
Rajesh Kumar Naidu Yabaji
Cost to the customer? Combo cost to the customer will be between 8 to — between depending on customer to customer basis volume discount between INR8,000 to INR10,000.
Manish Poddar
Okay. So this has come down from the last quarter, is that so?
Rajesh Kumar Naidu Yabaji
Of course, yes.
Manish Poddar
Okay. And so the second area which I want to understand is let’s say this freight brokerage, how many hubs do we have right now and let’s say what are the sort of people investment which has gone there?
Rajesh Kumar Naidu Yabaji
Investments in brokerage like as any marketplace, the investments are on two sides; investment on demand side, investment on supply side. In trucking because shippers are always searching for a truck and that is the reason why 2.5 lakh brokers in the country exist because trucks are wherever they are and they need to be figured out and they need to be matched, right? So development of — development cost of demand side is generally fairly lower. Development of cost of supply side is generally very high. But given our strategy where we acquire truckers using telematics and tolling and then basically on loads they get essentially cross sold, our supply costs are like close to like negligible or zero and large part of our costs are in demand side, right? And the — if you’re asking me in terms of whether the investment on the brokerage side, are they really material from a P&L perspective, the answer is no at this point in time.
Manish Poddar
So if I get it right, you said Bangalore is one hub which we’ve started. Have we taken this pilot to another hub is what I’m trying to get some sense of?
Rajesh Kumar Naidu Yabaji
Sorry, I have not been able to hear you, Manish.
Manish Poddar
No, no, so I’m saying let’s say Bangalore is one hub where you’ve taken this business, right? So I’m just trying to understand have you started doing it in other hubs also and how many hubs are they in right now?
Rajesh Kumar Naidu Yabaji
Yeah. Bangalore is the first hub and again Bangalore also, we are — basically we want to really double down and deepen in Bangalore. And as you rightly have asked, we are live in totally five hubs. But yes, I mean the business is largely in a playbook building phase and very hard to explain any form of the business at this point in time. But yes, yeah.
Manish Poddar
Okay. And Rajesh, if I can squeeze in one last one. Let’s say in terms of this growth businesses, which have roughly doubled in size if I look at a full year basis, can you help me understand, let’s say incremental — in terms of incremental contribution, let’s say if I had to think about it, what are the larger parts in that?
Rajesh Kumar Naidu Yabaji
What are the larger costs?
Manish Poddar
Larger parts, let’s say in terms of delta change in revenue.
Rajesh Kumar Naidu Yabaji
Larger parts. Yeah. So basically as mentioned before, broadly the mix is similar. The vehicle finance business would be the largest in that and then the loads brokerage business and then the fuel sensor business. Largely from a timing and the scale of the businesses perspective.
Manish Poddar
Okay. Fine. Thank you so much.
Operator
Thank you. Next question is from Nilesh Jain from Astute Investment Management. Please go ahead.
Nilesh Jain
Hi. Thank you for the opportunity and congratulations for a great set of numbers. My first question is on your number of monthly active operators and currently we have almost a share of 20%. So how should we expect growth on this side; acquisition of new users, other truck operators?
Rajesh Kumar Naidu Yabaji
Yeah. So basically I think if you’re asking from perspective of the user acquisition on the trucker side, I think you should expect this number to be range bound in this zone for a good number of years. I think the important point to also understand is that if you segment this particular market share across different categories, we have like, let’s say, much higher market share on the intercity truck side because of the nature of the services we provide and probably a lower market share on the smaller vehicles kind of perspective, right? So the way to look at is that the kind of businesses we as a company want to venture into in the future in terms of loads, etc., right? I think for these businesses to become bigger and generate massive revenues, right, the scale of user base and growing at this level is basically perfectly fine, right? So if you’re asking me is the growth slowing down?
Obviously answer is yes, it will be in this range of high double digits, low double digits over the next course of three to five years. But this does not determine the growth rate of independent business verticals because if you see the maximum penetrated category for us is tolling. Telematics has probably half the penetration of tolling so which means there’s much headroom of growth. Loads has very less penetration in terms of the brokerage, let’s say, which is the largest revenue, which will be the ticket size of the largest revenue generating vertical, right? So if the question is from a perspective of headroom of growth, all verticals have very high headroom of growth. But from the perspective of addition of customers like as the broad statement, which I mentioned, it will be in the double digit numbers in the foreseeable future.
Operator
Thank you. Nilesh, I’ll request you to come back for a follow up question, please. [Operator Instructions] Next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Lokesh Manik
Yeah. Hi, good evening to you, Rajesh and team. My question was after you get the PPI license, what is the increase in fixed cost that you are expecting?
Operator
Lokesh, sorry to interrupt you, your audio is unclear. Can you please come a little closer to the speaker and talk, your mic and talk, please?
Lokesh Manik
Yeah. This is better. Hello.
Rajesh Kumar Naidu Yabaji
Yeah, go ahead. I think it was a little unclear, but I think we’ve also got the question. I think your question was that PPI license, what is the cost increase, right? So basically like remember that the whole journey of building the stacks to deliver the payment experience to the customer, like a lot of the stack is already existing with us, right? A, right? And like the incremental cost would be far outweighing, let’s say, assuming that we do, let’s say, some X percent business on our own prepaid stack end to end, right? The incremental cost even from day one on a variablized basis at like even a very small scale. Even if 5% of our business comes from our prepaid stack, the incremental costs are far lower than the overall improvement in economics. So there is not going to be any fixed — increase in fixed overhead. It is still the same team, same technology team, same product team is going to build and manage the same stack internally.
Lokesh Manik
Got it. That’s it for my side. Thank you.
Operator
Thank you. Next question is from Gaurav Malhotra from Axis. Please go ahead.
Gaurav Malhotra
Hi, thank you for the opportunity. Congrats on a good set of numbers. I just had a couple of questions. I think they have been the cost control has been excellent. Just wanted to get a sense as to at how much more you can sort of squeeze out of the growth of your business without sort of really meaningfully increasing your cost. That’s my first question.
Rajesh Kumar Naidu Yabaji
So basically we will — I mean don’t expect reduction in cost, right? I think we fairly run a very — I mean we have a very lean culture. We have been operating like this forever in terms of all our policies and everything. We typically have a very lean approach to it. Even launching a new business, we have a very lean approach to it. Let’s say if we start off a brokerage business, like we just take a 5000-seater for 100 people, which is a INR500cost per seat, INR50,000 seater like this. So basically that’s always the approach in terms of very lean way of executing, I think you will expect the cost to be largely lean and then would not reduce I would say. Second part is like obviously you will always see a benefit of operating leverage there that whatever we do incrementally, we will be able to deliver operating leverage, but inflation linked is what you can largely assume.
Gaurav Malhotra
Okay. Thank you so much.
Operator
Thank you. Next question is from the line of Parikshit Kabra from Pkeday Advisors. Please go ahead. Parikshit, may I request you to unmute your line and proceed with your question, please? Due to no response, we move on to the next participant. Next question is from the line of Nidhesh Jain from Investec India. Please go ahead.
Nidhesh Jain
Thanks for the opportunity. First question is what is the profile of our truck operators? Are they single driver owners, fleet owners? And what is the average size of — what is the range of size of fleet that these truck operators are managing?
Rajesh Kumar Naidu Yabaji
Yeah. An average between two to three trucks. Small, small truck operators. Think of it as large truck operators always have a lot of people to serve them because they are more profitable segments because cost to get to them is easy. You go to a big truck guy who has 50 trucks, you can just sell him a deal and economize on your cost of sales. We were able to develop a unique method by using tech, using platform, and on-ground workforce to be able to really serve these small users all across the country. So this was always an underserved segment. Using technology, BlackBuck was able to really penetrate and get them online and build a business model from there.
Nidhesh Jain
Sure, sure. And what percentage of your revenue will be coming from this telematics or fuel sensor segment?
Rajesh Kumar Naidu Yabaji
We only give the split of core and growth at the moment. Core and growth put together, we’ve already disclosed that’s roughly close to about 85% of the revenues. And in that, payments is the larger revenue vertical, telematics is second.
Nidhesh Jain
Okay. And third question is on cash flow generation. Cash flow generation this year is a bit softer. Cash flow from operation is almost 50% of EBITDA — adjusted EBITDA. So any particular reason why the cash flow from operation is much lower?
Rajesh Kumar Naidu Yabaji
Good question. Cash flow from operations for us always mimics adjusted EBITDA, right? In this particular year, there are basically two things which have happened. The cash flow from operations you’re referring is basically the cash flow of consol P&L. One is basically the loans disbursed by the NBFC arm of BlackBuck. That’s roughly about INR30 crores of loans disbursed by them. So that’s one thing which you need to account for, which is leading to the number not being there. The second number is that there is a one-off working capital item that you can see, there’s INR50 crores of working capital gap which went into the business. That was again a one-off that got clawed back actually on 31st of March in fact, that got clawed back in the first week of April itself. That was to ensure that within 1st of April, lot of banks don’t operate. That was to ensure that the whole payments business does not have any working capital sort of a crunch. That got clawed back. If you add both of them back, the number comes close to the adjusted EBITDA of INR105 crores.
Nidhesh Jain
Okay, sure. That’s it from my side.
Rajesh Kumar Naidu Yabaji
So every quarter, think of it as whatever EBITDA we deliver, that’s the cash we generate.
Operator
Thank you. Next question is from Deepak Poddar from Sapphire Capital. Please go ahead.
Deepak Podar
Okay. Thank you very much for this opportunity. So just first up wanted to understand, I mean in terms of revenue CAGR, if I have to see next two, three years, what sort of CAGR range we might be looking at? And what would be top two, three growth drivers to achieve that kind of growth? So that would be my question.
Rajesh Kumar Naidu Yabaji
So we as a company have basically taken a position on not providing guidance. But to just help you like you could like really — I mean the growth businesses is anyone’s guess because all of that is — our big optionality is depending on how we crack some business models and how we really outscale, right? In terms of core businesses, like we have got very strong tailwinds from the perspective of India’s infrastructure development and how tolling goes in the country. I think most of those indices would help you be able to sort of model how that looks like. But yeah.
Deepak Podar
And what would be top two, three growth drivers we are seeing?
Rajesh Kumar Naidu Yabaji
Top 3 growth drivers? I mean basically kilometers built in the country, the inflation on toll fares, how they work, number of trucks how they are increasing, how we are gaining market share on a continual basis, right? If you map all these factors, you would be able to simulate this.
Deepak Podar
Fair enough. And in terms of — I mean will you be able to provide in terms of revenue mix how much we earn from brokerages, how much we earn from commission or subscription base? So, some breakup would you be able to provide in terms of percentage?
Rajesh Kumar Naidu Yabaji
Yeah. We only provide split between our core businesses, which is basically tolling and vehicle tracking service and the growth businesses. Only these two splits we provide, sub-split we don’t provide.
Deepak Podar
So how much would be tolling and tracking?
Rajesh Kumar Naidu Yabaji
About 85%.
Deepak Podar
80%-85%.
Rajesh Kumar Naidu Yabaji
85%.
Deepak Podar
And remaining would be growth.
Rajesh Kumar Naidu Yabaji
Yeah. You can see it in the earnings deck, it’s provided out there. There’s a quarter-on-quarter flow as well.
Deepak Podar
Fair enough. That’s very helpful, sir. That would be from side. Thank you very much.
Operator
Thank you. Next question is from the line of Nilesh Jain from Astute Investments. Please go ahead.
Nilesh Jain
Hi. Thank you for the opportunity again. My question is on the tolling business for the FY ’25, what would be our market share roughly if you can provide that?
Rajesh Kumar Naidu Yabaji
We ended with — we started the year with 37. We ended the last year with 37. This year we ended at roughly 45.5.
Nilesh Jain
Do we see ample opportunity for us to further increase the market share or we will be stable around this level?
Rajesh Kumar Naidu Yabaji
We believe that like every month we acquire market shares, right? So we believe that we will continue to have good headroom, but we don’t know where we will land at. But see, I mean how much ever our incremental acquisitions are away from our current steady state market share, our market share will keep growing. So I think we can only like help you understand how the past has been, which has been like we moved from 30 to 37, 37 to 45.5. Now we need to figure out how the next year is going to be. But yes, but we are the market leaders in terms of acquisitions and in terms of GTVs so we continue to steer aggressively in that direction.
Nilesh Jain
Just last question on data keeping, if you can provide the active GPS devices we have. I think this last, I think what you all had shared was 6,87,000 in queue at the time of RHP. Would it be possible to share?
Rajesh Kumar Naidu Yabaji
No, I don’t think that in RHP. Sorry?
Nilesh Jain
3,90,000 I think you all had at the time of RHP.
Rajesh Kumar Naidu Yabaji
Yeah, correct, correct. So, this information we’ve stopped providing at the moment.
Nilesh Jain
No problem. All the best.
Rajesh Kumar Naidu Yabaji
Thank you.
Operator
Thank you. We’ll take the next follow-up question from the line of Sachin Dixit from JM Financial. Please go ahead.
Sachin Dixit
Rajesh, a couple of housekeeping questions we need. The first one is that why do we have a negative ESOP expense for this quarter?
Rajesh Kumar Naidu Yabaji
Yeah. So there are some — two things. One, if let’s say an employee leaves, then that ESOP gets surrendered and then there is a reversal. Second, there are some changes in estimates in terms of attrition, etc. These are the two reasons. But as we move forward, like we have shared in the earnings deck assuming no further grants, what is the ESOP charge for the next eight quarters is being provided in the appendix.
Sachin Dixit
And the second question is basically on discontinued operations, right? I believe we sold off that business and last quarter we did not have any number coming from discontinued operation P&L, but we again have this quarter. Why is that coming and how long do you think such an impact can last?
Rajesh Kumar Naidu Yabaji
If you see the note also on the continued operation, there was a contingent disclosure that was there. Now I mean we have cleared all of that out, that obligation closed in February. So this is the last charge that we will have on this particular piece. It is just contingent receivable that is not come through.
Sachin Dixit
Understood. All right. Thanks so much.
Operator
Thank you very much. As there are no further questions, I will now hand the conference over to Mr. Ankur Pant for closing comments.
Ankur Pant
So thank you, everyone, for joining the call. With this, we conclude the 4Q FY ’25 call for Zinka Logistics Solutions Limited. Have a nice day.
Operator
[Operator Closing Remarks]