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. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. Please note that a copy of this closure 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 a corporate material of Zinka Logistics Solutions Limited and cannot be copied, rebroadcasted, or attributed in the PR media without specific and written consent of the company. In our hand, the conference over to Mr. Ankur Pant from IIFL Capital. Thank you, and over to you, Mr. Pant.
Hi, good evening, everyone. On behalf of IIFL Capital, I welcome you all to the Q4 FY 2025 earnings call of Zinka Logistics Solutions Limited. To give you an in-depth understanding of the company 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.
Thank you so much, Ankur. Good evening, everyone. Welcome to our third earnings call, and also the summary of the last whole financial year. Yeah, so are you able to—am I audible? Can the IFL team confirm, please?
Yes, sir, you're audible. Loud and clear.
Yes, you are audible.
Okay, super. Just first giving a snippet—yeah, first giving a snippet of the whole financial year which went by. This is a third earnings call. This is Q4 2025 is what we'll be presenting and a full year FY 2025 numbers. We did gross revenues of totally INR 462 crore 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 profiles, our contribution margin profile continues to be steady in the range of 93%-94%. We made INR 429 crore 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 INR 139 crore in the last financial year. Adjusted EBITDA does not include basically the ESOP costs.
Everything essentially gets factored, and that's roughly close to about 10x growth over the last financial year. Last financial year, when we went public and filed the DRHP, that number was close to INR 13 crore, INR 13.5 crore, and that number today is roughly closer to INR 139 crore. These are revenue numbers which, in our business model, typically lag the platform activity. As you can see, we have close to, in the last full financial year, close to about 720,000 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 three and a half lakh users are using more than equal to services, which shows the love for services, deeper penetration, and cross-sell upsell which is happening, which is roughly a growth of roughly about 32% year-on-year on a customer base basis. Payment, which is one of our leading verticals of revenues, and a 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 INR 23,000 crore 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 are, as a company, continuing 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 $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. People, 75% of these trucks are owned by people who own less than five trucks. 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 there's a huge room for improvement, both from a 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 14-16 percentage points, most of them are basically anchored in the microeconomic problem of how a truck operator operates in this industry. 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, right? That particular vision, we believe, can be realized by really unlocking and really making truck operators' lives seamless.
That is the midterm vision, probably a four, five-year vision with which we will 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 will keep iterating this. There are three key sort of dimensions in which most of the company work or 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 maybe in a 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. 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. 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, right? That is 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. 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 Fleet Docs. 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 a 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, right? 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. We are the top of the mind recall when you say digital for truck operators. The usage keeps deepening. The usage is 44 minutes daily app usage by the truck operators. That is a platform which continues to scale, continues to deepen. What is really important, what we want 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. That is how new verticals keep getting launched. Powering this platform is the most important vector for us, the distribution workforce all across the country. Truckers have a persona which are largely middle-aged, 35-50 years old, largely uneducated. How do we really reach to them and service them, right?
That's the story about distribution. We have a 10,000-people touchpoint network all across the country. We have presence in 85% of the districts today, and that's like 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 various degrees of people who typically sell to a customer or service the customer, right? This is our revenue delivery sort of engine. We create offerings, offerings are launched on our platform. The platform continues to get stronger. Newer offerings launching becomes easier and aided by a very seamless, efficient, low-cost distribution, widest distribution network coverage to all truck operators, which is one of the biggest motes for us in this business. Now, moving into giving an update on what happened last quarter and what happened in the whole financial year, right?
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 770,000, which was 650,000 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 600,000 to 722,000, which is roughly 21% growth. Wherever there is an 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 to be at 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 INR 5,000 crore, which grew to about close to INR 6,600 crore this quarter, which is a growth of about 33%. On the whole financial year, it grew from INR 17,300 crore to INR 24,000 crore, 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 about INR 137 crore 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 INR 4.62 billion on a financial year 2025, which is a 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, it 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%- 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 continue 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 INR 54 crore, which was in the same quarter last year, roughly about INR 17 crore, which is roughly a 2.2x growth. 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 INR 13.5 crore in adjusted EBITDA in FY 2024, which grew to INR 139 crore in FY 2025, which is again the 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 INR 390 crores of adjusted EBITDA this quarter, which was in the last year INR 10.5 crores, which is again a growth of close to three times. More notably, in the last financial year, removing interest income, we were basically -INR 60 crores, which has jumped to now INR 103 crores . That is a good performance.
Largely, most of this performance was locked in, probably, let's say, a few quarters, a few years back, because of the delayed nature of 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 cohort 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, right? As we discussed in numbers, 37% growth in the last quarter year-on-year and FY 2025, 46% growth.
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 a few quarters to operationalize that. This will really help us gain an end-to-end ownership of the payments stack, which will enable us to deliver a very superior customer experience. Definitely, some economics will also improve over the period of time. 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. In that, there is a device specification called an AIS device, which is basically one of the prevailing devices wherever the government mandations typically happen.
There we've developed a new hardware from scratch, which has got ICAT certified, so that will be a BlackBuck device from an ownership perspective end-to-end. For that, we've been able to establish over the whole last year a 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. This 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, where 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 UCV 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. We definitely did not see the kind of scale we thought we would foresee.
Obviously, there is good growth in this particular segment. Being in the lending space for our partners, it is better that they grow slower with a very high-quality portfolio quality. I think that is more important here than really blitz killing on a growth perspective. The third biggest vertical for us is the loads vertical, where, as many of you know, we have started close grouping the loads, which is going to be the bigger future for the loads business. There, that business continues to take share. Obviously, that business, because it is at a very smaller scale, we are growing in multiples from a quarter-on-quarter perspective. There, the biggest focus today is on product development. We have built the whole end-to-end fulfillment stack, the payments 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 one-time fulfillment, and all of that. 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%-70%, depending on state to state. Scaling that playbook will not be a big challenge. I think creation of the playbook is the most important thing there. That is 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 transacting 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 INR 37 crore. And in the whole financial year, we created a shift in roughly close to INR 125 crore in the overall Adjusted EBITDA. That is, again, the testimony to the quality of the business model we have been operating and continue to operate. As always, we have explained to you the reason for explaining to you using this slide, the context of operating leverage and the quality of operating leverage we have been having. If you can see from a revenues perspective, on a year-on-year basis, we grew about close to INR 37.5 crore.
Most of that revenue, most of that gross revenue, converted into existing EBITDA, which shows the leverage from an operations perspective. Ninety-nine percent is the efficiency there. When you look at it from a sequential perspective, we have grown roughly close to INR 14 crore. Out of the INR 14 crore, INR 12 crore have flown into EBITDA, which is at about 84%. Again, reiterating, the drivers of operating leverage are that most of the revenues are recurring in nature, which means users have acquired less in financial year 2021. Those revenues continue, and we do not really have to incur any costs to gather those revenues every year. Hence, those revenue profiles continue. Because most of these revenues are platform in nature in terms of subscription, in terms of net commission-based revenues, it is a high contribution margin profile.
It is a very strong flow through from revenue to contribution. As we have always discussed, the user retention, typically three to four years, after three to four years, flatlines. We hardly lose users. Because of the quality of products we have built, users retain, and our revenue retention rate, as this flows in the DRHP as well, as you can see, has been very, very strong. That drives the whole operating leverage. Obviously, to add more revenues, we do not really spend any money from the perspective of asset deployment. It is an asset-light business, and hence the scalability of the business model as well, right? Basically, summarizing in one line, BlackBuck's platform and revenues are driving a strong P&L for us, 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 INR 6 crore in Q1 FY 2024, steadily increasing because we are having a consistent revenue growth. Most of the revenue growth in efficiency of 80%-90% has been flowing back into bottom line. That's resulting in quarter-on-quarter profitability, sequential profitability, year-on-year profitability continue to compound. Where we stand today is on an exited EBITDA to revenue. This percentage on exited 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, INR 122 crore moving into with other income, total income being INR 137 crore.
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 INR 127 crore, which is about close to 40% growth on a year-on-year basis. 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. 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. We don't foresee, even in the future, massive expansion in our sales and marketing budgets.
That's the reason why you can see that there is marginal or no increase in our total expenses, which are steady at INR 83 crore at a quarter level on a year-on-year basis, which helped us create an adjusted EBITDA of INR 54 crore. If you remove the other income, which is largely the interest income, the adjusted EBITDA has essentially become INR 39 crore. Another important metric, which is basically PBT, where you add the cost of ESOP, but you exclude exceptional item, and you exclude the discontinued operations, which is probably a much better quality of metric from a company's profitability perspective. That's trending close to about INR 42 crore, which largely in a normal quarter would have mimicked the PAT.
In this quarter, because it's the first time we have delivered PAT, there is an accounting transaction where the profits, which the losses, the carryforward losses of the past, basically have been accounted in the, yeah, deferred tax has been recognized on the balance sheet and credit to the P&L has come through. Sorry, I was just taking Satyak's help to narrate that. That is why you see a non-usual PAT getting created of INR 2.8 billion. Largely, the PBT number is more where we can get anchored, is where the PBT reflection is going to be, which is obviously from a financial year perspective, roughly at close to about INR 91 crores. If you look at adjusted EBITDA for the whole financial year, which is roughly INR 103 crores, and if you remove ESOP charges of the last year, that comes to about INR 91 crores.
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. Yeah, 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 INR 280 crore. If you add back the profit and loss in 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 INR 54 crore. And other income of INR 15 crore, you basically get to adjusted EBITDA excluding other income of INR 40 crore. That's a simple walkthrough. That's all from our side. We'd be happy to take questions. Yeah.
Thank you very much. We now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Sachin Dixit from JM Financial. Please go ahead.
Yeah. Hi. Congratulations team on a great set of results. I had a couple of questions. My first question is with regards to sorry, there's a lot of background noise. Can you hear me? Hello? Can you hear me? Now is it okay? Sorry?
Now we can hear you. Sachin, can you repeat that, please?
Sure, sure. Great. Basically, my first question is on the telematics side, right? If we think from a truck operator's angle, right, and obviously during the DRHP and all, you have highlighted why a GPS device helps a truck operator and all. Other than regulatory requirement, what value proposition does a typical truck operator see in a telematics device? Are they willingly paying for that, or only when regulatory push comes that they are willing to pay for it? Similar in terms of fuel sensors, right? How do you think of the value proposition from a truck operator's angle versus what do you say?
Yeah. See, basically, telematics at an overall level, right, in the Indian context, right, truck operator, so Indian context, India is a land of, first of all, truck owners who employ drivers who drive the truck, which is the largest majority, right? 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, right? Today, now if you segregate telematics into two parts, one is vehicle tracking, and the second aspect is basically fuel sensors, right? 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 overspeeding, etc.
Second biggest value proposition is that when he's filling a 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 5:00 P.M. I can't see it anywhere. Where is it? He says it's two hours, but then he doesn't believe him. 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. If you look at in terms of the driver, in terms of truck preventive health maintenance, 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, right?
Essentially, everything about 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 want to turn off the truck. He can do that remotely, right? Essentially, vehicle tracking solution is all about this. Now, within the vehicle tracking, today, roughly about 25%++ 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 operators pay for the AIS devices is also on a higher level, right? Answering your question, value prop is strongly driver management-led, right, and customer experience-led in terms of delivery of goods. Under that, 25% of the device sales are driven by mandations. Those mandations are again state-specific from a mining area perspective, parking perspective, depending on different needs which the government wants to govern in terms of vehicle movement, right? 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%-60% will be the expense of fuel. Now, the biggest fights between an owner and a driver happens is basically on heft of fuel, right? And because fuel is the largest expense, right? Number one. Number two is that a lot of fuel stations, like a lot of fuel stations are non-standardized. You also don't know when you're filling fuel, whether you're getting 100 L, when you're paid for 100 L, are you getting 100 L or not, right? Fuel sensor is all about being able to keep track of how much did I fill fuel, when you have done 100 km, how much fuel did you consume. Any sensitivity on a threshold of probably few liters, maybe 4-5 L, gets detected by the fuel sensor which we provide. The whole use case is with paranoia on really managing fuel filterage effectively for the truck operator is why they pay for fuel sensors.
Because Rajesh, I think basically one thing that I wanted here was I understand what value proposition you are providing, right? From the truck operator's 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." Does the truck operator really believe that they can actually control it by having these tracking devices, or is this more of some of them are maybe taking it?
Yeah, yeah. This is the value proposition we provide because a truck owner wants it. Earlier we were selling this product in the ARPU range of INR 15,000-INR 25,000. It was not getting sold because it is a very high-value product for him. When we were able to really re-engineer the device and were able to really work on the cost of the device and really bring down the price, the whole product has taken off. It is a product we have built because there was a need and there was an ask by the truck operators.
I understood. I understood. Thank you. My second question is that there is some market chatter that one of your telematics peers is looking to also enter the profit boost 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?
Basically, I mean, sorry, but I think I am not in the information on which name you're referring to. 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, and 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. 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.
I think obviously more competition in this space is always better because truckers are truckers in the community where there are very few people who are hand-holding them and really creating very good solutions for them. We believe if there are more players, it will really help build the 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 grow much faster.
Sure, 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. All the best for FY 2026.
Thank you. Yeah. D&A expense has jumped very quickly. You mean other expenses, Sachin?
No, no. I'm talking about depreciation only.
Oh, depreciation.
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 are some GPS devices where we have to take some accelerated depreciation. Generally, it should stay in the range of INR 80 crores-INR 100 crores as we move forward.
Got it. Thank you. All the best for FY 2026. Bye.
Thanks, Sachin.
Thank you. Next question is from the line of Abhishek from ICICI Securities. Please go ahead.
Hey, hi. Congratulations on a great set of numbers. Just a couple of questions from my side. Am I audible? There's a lot of noise.
Yes, yes. We can hear you.
Oh, great. Yeah. Quickly, from this PPI license, what is the upside that you see in terms of take rates for the business?
Can you please repeat your question? Sorry, we couldn't hear you.
Because of this PPI license coming in, what is the upside in terms of take rate that you'll be able to get?
Yeah. 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, right? And the remaining is with the partners. That upside we 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. You would not see the improvement in the take rates immediately. Yeah.
Got it. With regards to the telematics device, are you actually looking at manufacturing it, or are you kind of sourcing it from outside somewhere?
Yeah. We typically have full control on the BOM. We have the control on the design. We own the design as well. We typically do a lot of the recent product which we've created. This was a project with a supplier in China for a good long period. We typically invest in the lab, and we sort of create the product. We obviously do the same thing in India as well. We have got suppliers across India and China as well. Nowhere are we manufacturing the product. We do not foresee the value add from manufacturing would really justify getting into that core activity.
But in terms of firmware-level coding, in terms of really BOM, 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. Then getting it done, we typically depend on our partners outside from a manufacturing standpoint.
Understood. Now, for both the towing business and the telematics business, what is the risk that the original equipment manufacturers will start installing these things into their products? I mean, more as things go on. Is that a risk to your business?
Yeah. OEMs, not only in, 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, right? On towing, the most important thing to note is that, first of all, towing, when it happened, it was a stock business. New vehicles obviously kept coming over the period of time. Remember that anyone who's buying a new vehicle typically is a large fleet operator who has more than 10 trucks. If 10 fleet is operating with, let's say, a provider like us, when he's buying extra two trucks, right, it's very hard to have a different provider for that. That typically ensures that in towing, every new vehicle which is being bought, our relevant market share typically flows to us. There we don't see any threat at all. Obviously, the kind of distribution we have, we cover the new dealerships. We cover all the truck operators. 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 OEMs 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 category, 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 costs at about INR 3,500 for the full year, right? Now, OEMs would operate at multiples of price point to that, right? We have a very strong price point advantage, right?
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 a very high number of technicians who are deployed all across the country. In terms of our focus in terms of running this product, it is very high, which typically means we end up providing a very high customer experience. Third point, again, same as towing, because the 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 which they have been using. We've never seen any kind of resistance with a new truck versus an old truck. Our sales have been pretty much secular across any kind of customer footprint.
Understood. Now, with regards to the loads brokerage business, right, that has been tried quite a few times in the past as well, right? What gives you the confidence that this time what you are trying to do will probably work better?
Yeah. Basically, explaining the loads at a very broad level, right? Loads in the industry in India is a $200 billion industry, $180 billion-$200 billion industry. Of that, if you remove part truck load, express, e-commerce, you remove everything which is very specialized in nature, over-dimensional cargo and many of those industries, you're left with a TAM of anywhere in the range of $100 billion-$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%. As the industry fragmentation on the supply side stays the same, 70% of the trucks are owned by less-than-5 truck operators. The industry has two layers of intermediaries. One layer is the small broker layer. There are about 250,000 brokers in the whole country who are organizing supply. The other layer is basically the bigger broker layer, which is basically organizing the demand. Roughly about 10,000-15,000 of those guys exist, right? As you rightly asked, there are various attempts by BlackBuck in this industry to solve the loads marketplace problem.
The first product-market fit of BlackBuck was basically the enterprise kind of a model where we were like any other big broker, and we were trying to crack the whole marketplace. The biggest problem we were not able to crack that business was because we never had 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 30-40 days, but the money comes back in like 120 days, right? 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 a 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. That was the first foray back in 2018, 2019. 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, but also delivering today's revenues and profits, right? Those are acquisition engines. When we actually built closer to 200,000-250,000 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 the way into launching loads. 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 is close to 3.1 million-3.2 million loads. That business is scaling continuously. In classifieds, because it is a verticalized classifieds platform, delivering high trust and delivering strong customer experience is really not possible, right? The entire evolution of classifieds into brokerage is what you are seeing this year. That is the cornerstone of the strategy for this year, where all these classifieds, right, 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 do not earn only by subscription. Let's say on the classifieds model, we only earn INR 12 on the customer side, on the shipper side, and we earn about INR 20-INR 25 on the trucker side from a load perspective, right?
In terms of brokerage, you earn anywhere in the range of long-term steady-state commission rates are going to be higher. Even now, we are earning between 6%-8% on a transaction basis, right? That is the whole flip. We believe that by being the most dominant player on the supply side, by having the highest mind share and the trust of truckers who are already trusting us with payments, which means they are paying to us, 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, marketplace approach through which we would be able to really solve the intercity trucking problem.
Abhishek, I'll request you to come back for a follow-up question, please. Thank you. A kind request to all the participants. Kindly restrict to two questions per participant. Next question is from the line of Manish Bhojdal from Invesco Asset Management. Please go ahead.
Yeah. Hi, thanks for doing the call. I have to interrupt. The first one regarding this telematics bit.
Manish, sorry to interrupt you. We are losing your audio. Can you please come in a better reception area, please?
Yeah. Is this any better?
Yes. Please go ahead.
Yeah. Rajesh, first one, if you can help me understand, let's say in this telematics bit, now let's say what is the cost of making the device? Let's say when you sell it with a bundle, let's say with fuel sensor, what is the pricing like? In the same side, in your understanding, what would your market share be in telematics?
Yeah. So basically, on the cost side, Manish, I think it will be very difficult for us to disclose that because this is competitive information, right? I will not comment on that. In terms of market share, we believe that in terms of the total telematics devices which are sold 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. On the fuel sensor side, also probably this will probably be a bit more, probably more in the 40%-45% range.
Cumulatively, what is the price now? Let's say if one takes the telematics with the fuel sensor, what is the combo cost?
What is the?
What is the combo cost? Has that come down is what I'm trying to understand.
Cost to the customer?
Yes.
Combo cost to the customer will be between INR 8,000-10,000, yeah, depending on customer to customer, based on volume discounts, between INR 8,000-10,000.
Okay. So this has come down from the last quarter. Is that so?
Of course. Yes.
Okay. The second area which I want to understand is, let's say this freight brokerage, how many hubs do we have right now? Let's say what is the sort of people investment which has gone there?
Investments in brokerage, 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 250,000 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? Development cost of demand side is generally fairly lower. Development of cost of supply side is generally very high. 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 close to negligible or zero. Last part of our costs are in demand side, right? 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.
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.
Sorry, I'm not able to hear you, Manish.
No, no. I'm saying let's say Bangalore is one hub where you've taken this business, right? I'm just trying to understand how you started doing it in other hubs also. How many hubs have we set right now?
Yeah. Bangalore is the first hub. We basically want to really double down and deepen in Bangalore. As you rightly have asked, we are live in totally five hubs. The business is largely in a playbook building phase. It is very hard to explain any form of the business at this point in time, but yes. Yeah.
Okay. Rajesh, if I can squeeze in one last one, let's say in terms of these 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?
What are the larger parts?
Larger parts. Let's say in terms of delta change in revenue.
Yeah. So basically, yeah. As you 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 business perspective.
Okay. Okay. Fine. Thank you so much.
Thank you. Next question is from the line of Nilesh Jain, from Astute Investment Management. Please go ahead.
Hi. Thank you for the opportunity. Congratulations for a great set of numbers. My first question is on your number of monthly active operators. Currently, we have almost a share of 20%. How should we expect growth on this side, acquisition of new users or the truck operators?
Yeah. So basically, I think if you're asking from the 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, 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? The way to look at it is that the kind of businesses we as a company want to venture into in terms of 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? If you're asking me, is the growth slowing down? Obviously, the answer is yes. It will be into the range of higher double digits, lower double digits over the next course of three to five years. 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, which means there's much headroom of growth. Loads have 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?
If the question is from a perspective of headroom of growth, all verticals have a very high headroom of growth. From the perspective of addition of customers, as the broad statement which I mentioned, it will be in the double-digit numbers in the foreseeable future.
Thank you. Nilesh, I'll request you to come back for a follow-up question, please. A kind request to all the participants. Please limit to one question per participant so the management can address all the questions from all the participants. Next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Yeah. Hi. Good evening to Rajesh and team. My question was, after you get the PPI license, what is the increase in fixed cost that you are expecting?
Lokesh, sorry to interrupt you. Audio is unclear. Can you please come a little closer to the speaker and talk? Your mic can talk, please.
Yeah. Is it better? Hello.
Yeah. Good. 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, remember that the whole journey of building the stacks to deliver the payment experience to the customer, a lot of the stack is already existing with us, right? A, right? And the incremental cost would be far outweighing, let's say, even let's say assuming that we do, let's say, some X % business on our own prepaid stack end to end, right? The incremental cost, even from day one on a variabilized basis, at 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. There is not going to be any increase in fixed overhead. It is still the same team, same technology team, same product team that is going to build and manage the same stack internally.
Good. That's it for my side. Thank you.
Thank you. Next question is from the line of Gaurav Malhotra from Access. Please go ahead.
Yeah. Hi. Thank you for the opportunity. Congrats on a good set of numbers. I just had a couple of questions. Rajesh, the cost control has been excellent. Just wanted to get a sense as to how much more you can sort of squeeze out of the growth of your business without sort of really meaningfully increasing your costs. That's my first question.
Basically, I mean, I do not 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. 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, we started off a brokerage business. We just take a 5,000 sq ft seater for 100 people, which is an INR 500 sort of cost per seat, INR 50,000 seater. Basically, that is always the approach in terms of very lean way of executing. I think you would expect the cost to be largely lean and then would not reduce, I would say.
Second part is, 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. Yeah.
Okay. Thank you so much.
Thank you. Next question is from the line of Parikshit Kabra from VKD Advisors. Please go ahead. Parikshit, may I request to unmute your line and proceed with your question, please? We hear no response. We move on to the next participant. Next question is from the line of Nidhesh Jain from Investec India. Please go ahead.
Thanks for the opportunity. First question is, what is the profile of our truck operators? Are they single driver owners, fleet owners? What is the average size of, what is the range of size of fleet that these truck operators are managing?
Yeah. Others are doing two to three trucks. Small truck operators. Think of it as large truck operators always had 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 tell 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. Yeah. 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.
Sure. Sure. What percentage of your revenue will be coming from this telematics or fuel sensor?
We only get the split of core and growth at the moment. Core and growth put together, we've already disclosed that roughly close to about 85% of the revenues. In that, payments is the larger revenue vertical. Telematics is second. Yeah.
Okay. 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. Any particular reason why the cash flow from operation is much lower?
Yeah. 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 which you're referring to 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 INR 30 crore 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 which you can see. There's INR 50 crore of working capital gap which went into the business. There was again a one-off that got clawed back. That was 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, a lot of banks don't operate. That was to ensure that the whole payment 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 INR 105 crore.
Okay. Sure. That's it for my side.
Every quarter, think of it as every quarter, think of it as whatever adjusted EBITDA we deliver, that's the cash we generate.
Thank you. Next question is from the line of Deepak Bhojdal from Sapphire Capital. Please go ahead.
Yeah. I'm Audio able Sir.
Yes, sir.
Yes. Okay. Yeah. Thank you very much for this opportunity. Just first, I 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? What would be top two, three growth drivers to achieve those kind of growth? Yeah. That would be my question.
Yeah. So we, as a company, have basically taken a position on not providing guidance. To just help you, you could really, I mean, the growth businesses is anyone's guess because all of that is big optionalities depending on how we crack some business models and how we really outscale, right? In terms of the core businesses, we have got very strong tailwinds from the perspective of India's infrastructure development and how tolling grows in the country. I think most of those indices would help you be able to sort of model how that looks like. Yeah.
What would be top two, three growth drivers you're seeing?
Top three 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, yeah, simulate this.
Fair enough. In terms of, I mean, would you be able to provide in terms of revenue mix? I mean, how much we earn from brokerages, how much we earn from commission or subscription-based? Some breakup, would you be able to provide in terms of percentage? Yeah.
Yeah. We only provide split between our core businesses, which is basically tolling and vehicle tracking service.
Tracking. Yeah.
The growth businesses. Only these two split we provide. Sub-split, we do not provide.
How much would be towing and tracking?
About 85%.
Huh? 80%, 85%?
85%.
Remaining would be growth.
Yeah. You can see it in the earnings deck. It's provided out there. There's a quarter-on-quarter flow as well. Yeah.
Fair enough. That's very helpful. I mean, that would be it from my side. Thank you so much.
Thank you. Next question is from the line of Nilesh Jain from Astute Investment Management. Please go ahead.
Hi. Thank you for the opportunity again. My question is on the tolling business for the FY 2025. What would be our market share roughly if you can provide that?
We ended with we started the year with 37. We ended the last year with 37. This year, we ended at roughly 45.5.
Do we see ample opportunity for us to further increase the market share, or will we stay around this level?
We believe that every month we acquire market shares, right? We believe that we will continue to have good headroom, but we do not know where we will land at. See, I mean, how much ever our incremental acquisitions are away from our current steady-state market share, our market share will keep growing. I think we can only help you understand how the past has been, which has been like we moved from 30- 37, 37- 45.5. Now we need to figure out how the next year is going to be. Yes, yeah. We are the market leaders in terms of acquisitions and in terms of GTVs. We continue to steer aggressively in that direction.
Just last question, data keeping, if you can provide the active GPS devices we have. I mean, because last, I think what you all had shared was 687,000 in Q at the time of RSV. Would it be possible to share?
No, I don't think that. Yeah. Sorry?
390,000, I think you all had at the time of RSV.
Yeah. Got it. Got it. Yeah. This information, I mean, we've stopped providing. Yeah. We stopped providing at the moment. Yeah.
No problem. All the best.
Thank you. Thank you. We'll take the next follow-up question from the line of Sachin Dixit from JM Financial. Please go ahead.
Hi, Rajesh. A couple of housekeeping questions, really. The first one is that why do we have a negative use of expense for this quarter?
Yeah. There are 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. 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 has been provided in the annex and the appendix.
Sure. The second question is basically on discontinued operations, right? I believe we sold off that business. Last quarter, we did not have any number coming from discontinued operation P&L, but we again had this quarter. Why is that coming, and how long do you think such an impact can last?
If you see the note also on discontinued operation, there was a contingent refuel bill that was there. Now, I mean, we have cleared all of that out, that obligation closed in February. This is the last charge that we will have on this particular fee. It is just contingent refuel bill, which is not complete.
Understood. Understood. All right. Thanks so much.
Thank you very much. As there are no further questions, I'll now hand the conference over to Mr. Ankur Pant for closing comments.
Yeah. So thank you, everyone, for joining the call. With this, we conclude the 4Q FY 2025 call for BlackBuck. Have a nice day.
Thank you very much. On behalf of IFL Capital and Zinka Logistics Solutions Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.