Good morning everyone. On behalf of IIFL Capital, I welcome you all to the Q1FY26 earnings call of BlackBuck or Zinka Logistics Solutions Limited. To give you an in-depth understanding of the company and answer all your queries. We have from the management side today, Mr. Rajesh Kumar Naidu Yabaji, CM D, and CEO, and Mr. Satyakam Naik, Chief Financial Officer. With this, I would hand over the call to Rajesh. Over to you. Thank you. Thank you.
Yeah, thanks Rishi. Am I audible?
Yes, please go ahead.
Cool. Good evening everybody. Welcome to the first earnings call of FY26. We met a quarterback few months back. We had a very good end to the last financial year and a very good beginning as well to the next financial year. This is our fourth earnings call. I think a number of four from an earnings call perspective probably in public markets would also make it a year broadly old. We have decided, as you've seen in the circulated material, you would have seen that we have really evolved our metrics to represent strengthening of the metrics because last year, first year into the IPO there were a lot of one offs which would keep coming every quarter. I think now we are sort of behind that.
Our ability to stick to only reporting and talking about largely like the hardcore metrics, which I think are the holy grail, is starting to happen from this quarter. You would see we have evolved few metrics and we will, wherever there are some changes, be narrating some of those. Here we go. This is the snapshot of our first quarter. On the overall income of the company, we made close to about INR 160 crores in total revenues, which was a growth of about roughly 63% over the last year, same quarter. On an EBITDA basis, this is the real EBITDA number, includes all the cost above, ESOP cost above. Our adjusted EBITDA number was only adjusting for ESOP.
On that number we have done close to about INR 40 crores in the last quarter, which is close to a four to five, four times growth over the last year in the same quarter. On the PAT we've done close to INR 34 crores. There is no comparable number last year because it had a lot of one offs. We are not comparing it with last year. That's the broad on the financial metrics performance. It was a good quarter for us and more importantly because this is a true EBITDA number. Important to note that in our business we generated an operating cash flow of approximately INR 63 crores in the last quarter because most of our revenues is what we collect upfront in terms of subscription revenues from our customers and they get generally spread out over the year. We collected like INR 63 crores.
We generated operating cash from INR 63 crores and then obviously when you account for revenue and then the EBITDA, it becomes a INR 40 crore number which you're seeing. Continuing our growth trajectory in terms of our operating metrics, we continue to deepen our market share in various different markets. We have close to about 783,000 monthly transacting customers on the platform, which is roughly a growth of about 14% on a year-on-year basis. Because majority of our revenues and majority of our work of focus is largely in the intercity and bigger trucks dimension, we are able to garner higher and higher market share and that growth continues on the metric where we demonstrate power users. Power users are the users who really love us, and we hardly see any churn from those users.
Typically, we have roughly close to about 386,000 of these users who use more than equal to services, which is on that number we have grown about 25%. GTV of payments, which determines largely the revenue from payments, grew about close to 28% on a year-on-year basis and we did close to INR 6,800 crore in payments flow through on the platform. Summarizing, as you can see broadly in the last four quarters of reporting, you've seen that we've consistently grown in strength to strength on the profitability numbers. We've delivered continuously increasing profitability. At the same time, what's important to note is that most of this profit delivered incorporates the cost of our newer experiments, cost of our newer investments we're making in our new businesses.
After coming into the public markets and understanding really how, you know, sort of, you know, what it takes to really run the company on this side, having said that, we are much more aggressive on our scale up of newer business areas over the last few quarters and we will continue to do so as we keep moving forward. That's a snapshot of Q1 2026. Before deep diving into further details, like many of you would be attending probably our earnings call for the first time, we'll take a minute and revisit what we really are as a company building. As you understand, we are a company with a dream in the long term to really disrupt and really organize the space of Indian trucking.
Today, any one of us, if we walk into a transport nagar in the country, we will only come back with a realization that this industry would change. The only question is really about when would this change, but not really whether will this change. We believe that the systemic inefficiencies in terms of the idle days of a truck, in terms of the number of kilometers which a truck does in a month, like when you compare all of this to the developed world, India is far behind in terms of the number of billable days which a truck does, which is broadly in the range of 17 - 18 days. The remaining 12 days is like nearly going empty to really find the next load or getting unloaded or getting loaded. All these inefficiencies are something which can really be addressed leveraging technology.
To be able to build this, I think the first lever to solve for is really trying to solve for the truck operators. That is what we've dedicated like BlackBuck's time, our time over the last five to eight years, really solving for that. From there is where we've been able to build really what BlackBuck today exemplifies, a platform which really enables and empowers a truck operator, helping him manage his business and really expand his business. What today our business model and our strategy looks like is basically these three vectors. We continuously create offerings for our customers which are essentially the innovations for our customers. We have our platform on which our customers transact.
This is nothing but our mobile app which our customers use continuously day in and day out, and a very unique low-cost distribution and servicing engine which is spread across almost every significant trucking village. What is really important to note is that the part of platform and distribution are something which basically took us a lot of time to build, right? It took us the last seven, eight years to really invest in these and build these platforms. A lot of investment in these areas are largely completed maybe about 18 months - 24 months back. Most of the investments today are in the area of innovating newer offerings, right?
The reason I'm explaining this is because it becomes very easier to understand our financials if you understand the fact that the platform investments, platform and distribution investments are really enabling us today to be able to launch a newer offering on the platform at a very incrementally zero cost. Newer offerings are able to achieve critical scale because of these two sort of capabilities of ours where we are not really spending any incremental costs, r ight.
So yeah, articulating our strategy, you know very clearly, offerings, as I always explain, we keep iterating, keep building newer value props, services, newer innovations for our customers with which their lives can improve. These are always launched on the platform. Our mobile app, which is really continuously being used more and more deeper by our customers, r ight.
Our ever scaling distribution workforce where, you know, largely it's a variableized workforce. Basically, if at all sales don't really happen in a seasonal months or quarters, you would see the costs also essentially shrinking automatically because these are really not fixed costs, they are really variable cost which are in the nature of sales. That's the whole, I would say, revenue Delhivery cycle or a growth cycle for the whole company. Now taking you straight into really what the financials are for us. This is the P&L overview for the company.
First line item, which is the total income, total income of the company. In the last quarter, we have done close to about INR 160 crore, which is a growth of roughly about 62% on a year on year basis and on rolling quarter basis roughly 17%. If we remove largely the interest income, we get the number on revenue from operations, which is roughly about close to INR 144 crore. INR 144 crore is a growth of roughly 56% on a year on year basis, growing from INR 92 crore in the last year, same quarter to INR 144 crore. Now if we split this into two segments, core businesses are largely, we've defined as all the existing capabilities.
Typically, let's say in earlier reporting under telematics, when we used to typically do GPS, we would report into core and we would report the fuel sensor vertical in the growth businesses. Right. For these businesses, the costs are shared, the, you know, the capabilities are shared. We've decided to reclassify that and put that as payments and telematics as our core business where we have done close to INR 120 crore in the, you know, in the recent quarter. Over the last year, we've done close to INR 86 crore. That's a 41% growth. Even if we would have used the previous definition, the growth number would have come close to 39%. Largely, this reclassification is done more to enhance the quality of reporting but not to really, you know, like look at numbers differently.
Next is the growth business which is interesting because SuperLoads business, which is basically the evolution of a classifieds business into a transaction marketplace, is, you know, kicked in, right? That's where we are seeing, you know, good level of growth.
We've started reporting, you know, that business, those business revenues, you know, from this quarter onwards because of the unlock we've had in that particular business where we've done close to about INR 23 crore in revenues, which is a growth of roughly about, you know, in the overall growth business, SuperLoads plus multiple other businesses, we've done close to INR 23 crore, which is roughly a growth about, you know, 3 - 4x over the last year where roughly we did INR 6.5 crore in the previous year. Now we've done close to INR 24 crore. That's growth business.
Important point to note is that SuperLoads business in accounting terms happens to be at a gross level, right? That's why we've introduced a newer metric which is called as net revenues, where we add to the revenue the operating, the operational revenues of the other businesses plus we add the gross margin of the SuperLoads business is where we come to net revenues, right?
We take off the gross impact of that business and start reporting so that it's easier for you to understand the revenue reporting. On the net revenues we've again had a very healthy growth rate. We've grown at about 43% on a year-on-year basis from INR 92 crore in the same quarter last year to INR 132 crore. On a sequential quarter basis we've grown at roughly about 8%. Right.
Coming to the cost line items, direct cost largely has grown in line with the growth in revenues, grown at about close to 45, 46%. That's why the whole contribution margin for the business largely is stable at about roughly 93%. If you see last year the contribution margin was 92.8%. This year the contribution is 92.6%. Right. On the overall, on the total expenses, roughly there is a small shrinkage of about 6%. Don't expect this shrinkage to continue. We would be investing in growth as we move into the next quarters and for propelling growth and growing into newer businesses.
Removing all of this, we've generated roughly about close to INR 47 crore in the adjusted EBITDA on the adjusted EBITDA basis, compared to INR 12 crore the same quarter last year, which is roughly a growth of about close to four times on a year on year basis. Accounting for the ESOP expenses coming to the pure EBITDA line item, that's roughly about INR 40 crore for this quarter compared to the previous year, same quarter about INR 8 crore, which is roughly about a five times growth from the previous year.
Coming to the line item of PBT where there is basically growth of roughly about 41%. Last year, the same quarter we had an adjustment, a one-off adjustment in the PBT numbers, which was a reversal of the RTS charges, right to subscription. We had instruments on right to subscription in the cap table, those were reversed.
You would see a INR 32 crore, which is because of a one-off item, which is really not the real PBT of that particular quarter. This quarter we've delivered close to about INR 46 crore in the PBT on the PAT basis, which is basically the true metric. We have done close to about INR 34 crore in the current quarter. This is broadly, you can summarize most of these changes as really moving into the spirit of really accounting line numbers so that the needing to explain some of these would not be there as we keep moving forward. Coming to some of the operational metrics, the key KPIs which we reported during going public, largely growth as expected across most of these metrics, and we have covered most of the financial metrics in the previous slide already.
Revenue from operations we have covered, net revenues we have covered, adjusted EBITDA we have covered in the previous metric. Largely in line with as we discussed in the previous slides, going forward, summarizing the three broad key areas on the overall revenue growth as a company, we've done close to 62% on a year on year basis. Core businesses compounding at close to 41%, largely leveraging the core operating model because the core operating model is built to leverage the tailwinds of the industry and a very strong execution excellence rhythm which we have as a company maintained over the many years.
The growth businesses continue to lead the growth trajectory where we've grown by about roughly four times, three and a half to four times the last year, largely led by the launch of SuperLoads business where the transition from classifieds to transactions is happening and that's a very high value prop for our customers and we would be able to really dramatically influence their deadheads, their running days. It's a very powerful product and a powerful value prop for our customers. Commenting onto the dimension on profitability, as you can see the strong operating leverage continues to be demonstrated in the core business.
While we continue to invest in new businesses, we continue to build on profitability as we spoke, adjusted EBITDA grew roughly four times from INR 12 crore in the previous year, same quarter to INR 47 crore to this quarter, which is roughly on a percentage points basis is 13% growth, 13% to a 36% on a net revenue basis on a year on year basis. All the core platform metrics continue to compound. As you can see, there is a growth of trucking operators roughly about 14% to close to 800,000. The time spent of the users has grown to about 43 minutes.
The GTV in payments which is one of the largest used services also has continued to compound. Now explaining, you know, again reiterating again on the operating leverage story, as we've always maintained, most of the revenues are platform-led, like subscription-led revenues, commission-led revenues.
Hence if you see on the right hand side, the revenues are largely recurring in nature. We don't have to really go every quarter and win these revenues. Like 90% of these revenues probably would be coming in from what we've already done in the past quarters. Most of the revenue has high gross margin profile. As you can see on a net revenue basis, if you see our contribution margin profile continues to be steady at 93% gross margin, which talks about the quality of revenues. We always have had very strong user retention.
To create these revenues there is no real strong asset creation or money invested in deploying into an asset. That is the reason why continuously we have delivered in any quarter, you pick up anywhere in the range of 70, 75% to like as close to 90, 95% operating leverage we've delivered.
Talking about this quarter, if you see on a year-on-year basis, there's a change in revenue of close to INR 40 crore and there's a change in adjusted EBITDA of close to INR 35 crore. That's a Delhivery of 88% of operating leverage. On a sequential quarter basis, there's a growth in revenue of INR 10 crore. There's a growth in adjusted EBITDA of INR 8 crore. That's a Delhivery of 84% of operating leverage.
We probably, with a reasonable confidence, believe that this operating leverage will continue to play out as we keep building the growth trajectory of the company moving forward. Just giving you a snapshot of profitability. This is the adjusted EBITDA metric because the past numbers on pure EBITDA would move around a bit. For right comparison, it's adjusted EBITDA.
As you can see, Q1 2024, two years back we did negative INR 10 crore, negative INR 11 crore of adjusted EBITDA. Change from the last reporting is that we've removed the other income bit from all of these numbers. You would see the negative being a little bit higher. It's a negative 18% on Q1 2024 two years back. As we report today, that number has grown to INR 47 crore, which is close to about 36% in the recent quarter of Q1 2026. As you can see, there is probably no quarter in which our profitability has not consistently grown in line with delivering operating leverage.
This is what I typically talk about when people ask me to share my experience on the journey of going public, that if the business model really delivers your results, really the whole rhythm of doing quarter-on-quarter results is not really burdensome because your operating model delivers results. You don't really work on this quarter for this quarter. You typically work in this quarter for probably your next five years kind of a growth trajectory and solving really the hard problems which you really have to still solve.
That keeps us as a company really focused on the right objectives for the long term, which is really important even for the shareholders. Just putting here together because there is some change in numbers so that all of you can refer to this particular chart, the way we started reporting numbers this quarter.
You can find the reporting of these numbers for the last eight quarters so that you can compare and contrast if you have any doubts in terms of how some of these numbers have trended in the past, relevant to this definition. You can find the glossary over here summarizing the broad takeaways of those two-year numbers. There is a 2.5x revenue growth over the last eight quarters. From the time broadly many of you would have started interacting with us and knowing us, like it was Q1 of 2024 numbers, Q1 - Q4 of 2024 numbers is what we were taking with you and talking. From that, the first number you've seen, there's probably a 2.5x growth.
There's a massive turnaround in profitability, roughly a 53% turnaround in profitability from a negative of -18% in Q1 2024 to a positive of 35%, which we talked about in this particular quarter. As I mentioned, almost every quarter you'd find numbers of quarter on quarter. If you look at every quarter, if you look at year on year operating leverage, the numbers would vary between 95, 98, 85 like l owest is 70. I think 70% plus is something which I think we've delivered very, very, very, very consistently in the last two years.
As you would have seen in this particular quarter, we are moving into this financial year with a very strong momentum in creating newer and very high-quality revenue streams, which are not only high quality from a P&L perspective but also the value proposition of those business verticals is very, very, very high and solves very critical pain points of our customers and helps us more become a part of their revenue generation.
Because today we really help him optimize his costs, help him run his business well, have control, which basically is very good and they really love us. I think the real shift into really partnering with them and really expanding their revenues and make more, I think, is a very, very stronger and integrated partnership level with our customers than where we are today. With that, we'll open the floor to questions. Thank you so much for listening to us.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take a fourth question from the line of Sachin Dixit from JM Financial. Please go ahead.
Hi Rajesh, hope you're well. The quarter results obviously were brilliant. Building on to some of the things that you mentioned, there were three questions that I had. The first one was on the SuperLoads side. This is the first quarter where you have come up with all the numbers on that piece. If we do some math around that, it looks like we did roughly GTV of close to INR 1,213 crore there, which effectively is implying, and let me know if my math is wrong, which effectively is giving close to like 20 - 25 freight transactions a day. Is that math right? How do we look to ramp up that number? Do you have any visibility on the plans ahead on this piece?
Yeah. So Sachin, I won't be able to comment on your numbers because as a principle, as we've always kept out that we will probably keep the disclosures of new businesses fairly limited and we will probably till the time they become a little bit more mature, you know, or probably 20, 30% of the overall revenues. We would not be disclosing probably in greater details. The second part of your question was around like the first part was on the numbers and second part. Sachin, can you repeat your question?
Visibility on how you are looking to ramp this up? Where do you stand, where you plan to go?
Yeah, so basically as I had maintained before, I think the business is in a very nascent, very creation zone. Obviously, we've started reporting it now. Right. It's still live in four hubs across the country, hyper-scaling in two. The other two hubs are largely for reverse haul synergies. The business has taken a very strong shape in this particular quarter. If you're asking me, we are still largely focused on heavily ramping up in only two cities from one earlier, now only two cities largely to really complete the whole playbook creation.
What I would like to also add is that I think the business is more entering into a phase where we are also trying to more understand how a mature P&L of this business should look like. How would a playbook of launch of a market from scale zero to a maturity, what would that look like?
How would the expansion strategy look like? I think those deliberations have already started. The broad guidance I would sort of say is that it'll probably be another three to four quarters before a very exponential growth to come into this particular business.
Just touching on to the thing that you mentioned that a couple of us are doing quite well. When I think of you ramping up to newer hubs, what does it take, how much effort, time, capital, whatever. I mean I understand capital requirement might be minimal, but otherwise how much effort does it take for you to ramp up new hubs?
Yeah, so very good question. See, basically in this business, the whole aspect is that this business is already running live offline business, right? India does like close to $200 billion of freight, right? Freight volumes in a year. In that, if we really remove the specialized execution like the partner load businesses, the E-c om businesses, the cold chains, the customized trucks, etc., if you remove all of that, 40% of the market goes away.
60% of the market, which is $120 billion, typically gets executed in the full truckload in an open market loads kind of a basis. Now this business largely happens through multiple layers of intermediaries. As you know, we've always discussed, there are two layers of intermediaries. In the industry, there are like roughly 250,000 brokers who do basically, you know, this business.
Our business is nothing but a shift of this business from an offline industry to an online industry. In any marketplace, there are two critical factors. There is a demand side and there is a supply side. As you would be aware, in our history of the business, we initially had gone into the enterprise business and one of the biggest reasons that we did not pursue that business later on was our inability to build direct supply.
Supply side costs are very high costs in this business, which you have also articulated that the cost may be minimal. The reason they're minimal is a sense because we've created our whole go-to-market in this industry by really delivering payment solutions and telematics solutions. With that, we really gained a very high market share of long distance traveling truck operators. A large part of our truck operators do intercity.
Now, to switch on a newer market, remember that in every market in the country, any market you pick up, we have of the long distance truck operators a market share between anywhere near 15%, 20% to as high as 70% market share of these long range long distance truck operators. Now I have largely supply already incubated, number one, and number two, supply is already activated on the classifieds platform. Truck owners know that there are loads over here.
This classifieds platform, which already has loads which are posted by the offline other brokers and transporters, we typically convert them into our own first party load where the customer can really see that this is a SuperLoads. This is executed by BlackBuck, full stack, end to end. BlackBuck will essentially be paying me the money. It is a much more stronger payment assured load, right?
To turn on a market, we basically need to get to the market, probably deploy a branch, hire few people who can essentially conduct fulfillment, conduct price negotiations. It is a very thin, wafer thin effort because demand side always, the shippers have unfulfilled demand because fulfillment by local brokers and trucks, transporters is very minimal. They always are in, always in search of a newer transporter who can enable them, right? A newer company which can enable them.
SuperLoads essentially becomes a very easy partner for people on the shipper side because the cost there is minimal. There again, we do an on ground activation with the customers to get onboarded. The supply side is largely like 90%, 95% plus plus dependent on the platform to get truckers who can come and take the full, the transaction marketplace oriented loads. Really activating the market is a lead time of like 15 days to like 20 days to activate a newer market and start the business.
Understood. My second question is on the insurance corporate agency license press release that you put out. What's the plan there? Are you planning to put in proper people dedicated to trying to ramp up insurance, or this will just be a product plug on the app?
Yeah. In the history of insurance license, we already had this insurance license before. This was actually the renewal of the insurance license. That's point number one. Point number two is that today already, like let's say, you know, we have few attach rates on insurance based on the services we sell. We obviously are using third party players to get those procured, and our margins are basically a little lesser with this.
Basically, with the same insurance, what we are selling, it'll go through via our own insurance corporate agency license where our margins essentially will a little bit expand, which will help us deliver better contribution profits, number one. Number two is that in terms of explaining, as you rightly said, it's largely a small plugin, nothing really material. We are not very directly in the business of only selling insurance to truckers. We basically use this as an attach rate for any of our products and then cross sell it over that particular product rather than really get into the insurance business of selling.
Got it. Just one final question, which is on the growth piece, right? When you release the average monthly transacting truck operator data, there seems to have been a growth downtrend. Obviously, that is also understandable considering the size you are asked. But is it normal? Is it likely to again pick up, or do you see like over a period of time this will start to inch slightly downwards.
In our business Q1 and Q2. Right. I had also narrated this in our first earnings call. Q1 and Q2 typically are always the seasonal months. Addition of truck operators. You would not be seeing this reflection in our revenue because our revenue is a compounded revenue. Addition of truck operators, the whole movement of trucks, all of those typically hit the lowest numbers in Q1 and Q2. Most of the growth typically comes in Q3 and Q4.
If you typically see even our movement in numbers, for example, mostly the numbers on mostly the profitability, etc., as well, typically you would see heavy moves in Q3 and Q4 because that's where the whole operating leverage extends not only onto the contribution to EBITDA, but also extends into the sales leverage also.
Q1 and Q2 I would say will be a bit muted, but at the same time, I would not like to guide that those numbers will be really path breaking. There'll be maybe probably an optimal correction to that, but not really a seesaw change. A very big lift in that as you move into the next quarter.
Understood. Thanks, Rajesh. And all the best for the coming years.
Thank you.
Thank you. We'll take our next question from the line of Rishi Jhunjhunwala from IIFL Capital. Please go ahead.
Yes, thank you. Can you hear me?
Yes, Rishi, we can hear you.
All right, great. Just a couple of questions. Firstly, again, on that loads business, while the revenue opportunity is quite clear, just wanted to understand how would you approach it from an acquisition or cost of acquisition perspective. Do you think both on the cost line as well as on the balance sheet, you could use some investments that are being done there because you've in the past talked about 6% - 8% kind of take rate or commission on that. Can your initial bit of revenues actually be lower in order to acquire customers? Just wanted to understand how would you play that economics.
Basically, I would break this in two phases, Rishi. One is basically the whole playbook development phase. I think in the playbook development phase, if we really, like, you know, reduce the bar to really create numbers, what happens is that, you know, the ability to differentiate between the real muscle which is being built out versus really the calorie growth.
The calorie growth may appear as a strong growth and you really would be able to mistake that with a muscle, and then the quality of business development essentially goes down. As you rightly said, what I would like to say is that in this business, because on both sides, though the truck operator, let's say, is a more retail, let's say the persona is a more retail customer, but at the end of the day is a very strong businessman.
On the shipper side, SMBs and the transportation companies are also like businessmen. Right. We are in a sort of a B2B kind of an industry. Any kind of an interplay on short term, like really, you know, trying to grab market share, typically we've seen that has not really been a very sustainable strategy in terms of growth and development. That's point number two.
Point number three is that, you know, as you are aware, the cost of building supply is the highest, but the cost of building demand is actually smaller. Hence, by leveraging the platform, we have this unique opportunity, like compared to anybody else in the market who's even trying to do this, to be able to blitzscale in this particular area. What I would say is that availability of, first of all, inorganic opportunities are abysmal.
Availability of ability to really induce capital till the time the playbook doesn't get built out, probably I would not really sort of advise, but what I would like to guide you towards is that in the long term, if at all, you would see from a perspective of investment, only the margin of this business may get fully reinvested. Probably we will not break anything beyond that is how probably we are thinking even in the blitzscale phase of this particular business.
Got it. Secondly, you know, with the PPI license, does any kind of dynamics change for us in any of the businesses, including tooling? How do you intend to leverage on that in the longer term?
Yeah, so rightly asked question. Last time we gave you an update that we've got the in-principle approval. That in-principle approval, on July 2nd, we got a full approval of our PPI license. That's point number one. Point number two, as we've always maintained, the context of getting a PPI license was to really deliver a stronger customer experience, right.
You know, also at the same time it enables a little bit of margin expansion as well, right. Number three, our strategy with partners will continue to be largely the same. We will continue to work with our partners in part, partial part of the business, and in the remaining part of the business. At this point in time, really there is no thought process of really leveraging the PPI license on any part of the other parts of the business.
I think largely in the mainstream trolling business, we may end up probably creating some innovative products, but that's pretty much a few quarters down the line. At this point in time, you can assume this to be as a customer experience enhancing tool and in a very longer term margin enhancing tool, and in a very longer term new product additive tool, but not in the near future.
This doesn't disintermediate banks or your banking partners in the long run for you.
Not fully, let's say. Basically, with some of the principal partners we've been working for long, I think we would be working with them for a long period of time. We would not basically be fully disintermediating.
Understood. Thank you. All the best.
Thank you. We'll take our next question from the line of Abhishek Banerjee from IIFL Capital. Please go ahead.
Hi, Rajesh. Thanks for the opportunity. A great set of numbers this quarter. The first question I have is on the Loads Marketplace business. You mentioned a blitz phase. Is it right that you alluded to it will be, say, three, four quarters down the line, the BRICS phase when we see exponential growth here?
Yes. Let me put it in this way. New businesses are always, let's say, hard to build. They take time to build. We are in the playbook building phase. I've always maintained this, that four to six quarters down the line is where you can see significant movement in some of these businesses, not in the immediate future.
Understood. Now coming to this business, I understand it might not be feasible to give out absolute numbers, but some indicators with regards to things like loads posted on the platform or at least the growth rates of how many loads are getting posted, is that possible to share? There are some things which have kind of indicators of future performance. If we get a handle on that, it becomes a little easier to kind of model it.
Yeah, that's what. I mean, we have a few sort of philosophies we have taken is that new businesses, till the time they don't add to 20% plus of the overall revenue, we would be limiting the disclosures. As you rightly said, I think as we keep moving forward, looking at how these businesses scale up, we will start disclosing a few more things for adding clarity.
Sure. Now, one very interesting thing in Delhivery's presentation this quarter, I don't know if you've seen that, is that they're again talking about, you know, building Orion, which is their full truckload (FTL) business. It is somewhat similar to your SuperLoads Marketplace. There is also another competitor out there in the private side of the market. Any thought on competitive intensity in this space? Should one really be worried about competitive intensity at such a recent stage, or would you really think that it's better for the growth of the overall market?
I mean, basically, if you have to draw a parallel, it would be like a 2019 or 2020 of quick commerce where there's literally nobody doing anything in this space. That's point number one. Point number two is that the biggest competition in this market today is the market itself because it's a hard market to crack. We've been in this space for the last 10 years, and ability to build supply is very hard because of the demography of the customers and the places and the regions they need to really go into to build supply. It's very costly.
Most of the money we've invested is basically into building supply. Prior to going public, all our loss-making years were largely about building supply on the platform. Now, talking about whatever little, let's say, we are aware is that our business largely does not cater to enterprise customers.
I think the business which you are mentioning may be the business which they cater to enterprise customers. Our business caters to SMBs and 3PL transporters. To basically put in perspective, Delhivery is basically our customer today in this business. Hence, it's basically a classifieds platform, closed looping into transactions and making a take rate, and then getting the whole marketplace getting woven around it. I would say that at this point in time, really, a formidable direct competition or really worrying about competition is too nascent at this point in time for this business because the market opportunity is very, very huge.
Understood. Now if we talk on a per transaction basis, what are the key, key things that you try to improve to improve customer experience with regards to the loads.
When you say customer experience, you're talking about the shipper or the trucker.
The shipper, yeah.
Basically in this business, if you look at it, let's say a shipper who's typically, as I mentioned, shippers are two types. One are SMBs who are trying to ship goods themselves. They are the owners of the goods, they are basically selling it to somebody. The second type of customers are like 3PLs and transporters who are shipping goods on behalf of their customers, their end customers, and they have contracts with the end parties.
They have a price contract with the end parties and they try to take a truck on a market hire basis from us. There are two types of customers. The first biggest need for both of them is a fulfillment index, which means if they are able to come to a platform, can they get basically a truck? That's one metric.
Because of availability of large amount of supply on our platform compared to a traditional small broker who in a day is able to process two to four transactions on a daily basis, our fulfillment rates are fairly high. That's point number one. Point number two, compared to an offline broker where offline brokers typically specialize on only one lane or one route, let's say a Delhi to Vijayawada and Andhra region would be one broker.
There will be brokers who will be only operating in those lanes. As a customer I have to go for that load to that particular broker, and then because of that I need to go to multiple brokers. With BlackBuck, because of the scale advantage, like in the hubs we are operating, we are operating across mostly most of the regional lanes. We've taken a strategy to go regional.
First, we're operating across most of the regional lanes so we are able to cater to most of the demand. What these guys really need, or let's say for a large chunk of demand, they're able to come to us. Number third, they are able to track the vehicle in transit. They're able to see where their vehicle is, has it left the city, how many kilometers has it done, where is it.
We give live tracking on the product directly. These are basically three, I would say, big value props today. Most importantly, the existing brokers do not have a very professional method of handling, be it in terms of accounts, in terms of reports, in terms of relationship management, etc. I think with us, all of that comfort becomes much more higher. Our ability to deliver a very strong quality of a truck.
Let's say our strength on the truck side also represents on the demand side because we know the trucker, we know the village, we have onboarded him, we have a KYC verified verification of this particular guy, we understand the truck much more deeply, right? I think all of this translates in a very strong in transit experience for the customer, right?
Basically put, like you know, four or five strong value props: availability of a truck at a lane level of higher availability, multiple lanes at one particular place, like in transit tracking, ability to know where the truck is and being able to update their own end customer, right? Ability to deal with a very professionally created setup so that it's more predictable. A very strong experience perspective and in transit experience perspective in terms of any exigency issues, we are able to handle it much more effectively than an offline partner.
Got it. Does moving to a transaction model open you up to payment risk?
The answer is basically this business is largely cash and carry. By that I mean roughly close to 90% of the payment is collected upfront from the shippers. Right. Let's say anybody who's trying to ship, they need to pay 90% of the money in advance. That basically removes largest part of the risk. Intrinsically there is really no working capital in this business. That's point number one. Point number two is that the remaining balance upon the truck reaching the particular place on the receptor of the proof of Delhivery, the remaining balance gets paid, right?
If you were to argue, the risk probably will be only to the tune of the sort of remaining balance. After having operated this business the last quarter a bit deeply, I think our ability to really deliver is close to like zero risk, like on collections, is there today.
Super. Just one last bookkeeping question. There's a large tax outgo in this quarter. How do you, I mean, you would have, you know, accumulated losses, right, to write that off. How should one look at the tax rate going forward?
Yeah, Satya, our CFO will take that.
Yeah. Quick one on taxes, the current tax is the actual outgo. That's about INR 3.8 crores, which is on other income, right, which is on treasury income essentially. Out of the total INR 12 crores, that's INR 3.8 crores. INR 8 crores is deferred tax, that's on accounting profits. It's not an actual outflow. In the previous quarter, you would have seen that we have created deferred tax asset because current quarter we had accounting profits. We have accounted for that deferred tax. You should think of tax outgo per se only from a treasury income point of view, at least for a few quarters from now.
Got it. Your cash path is definitely higher, more in the range of INR 42 crore. INR 41 crore, INR 42 crore, right?
Yes. Cash profit will be higher. Should be in the zone of cash, cash from operations like Rajesh mentioned, should be in the zone of INR 60 crore for the quarter, for this quarter.
Thank you so much for the detailed answers. Really appreciate it.
Thank you. Take our next question from the line of Gaurav Malhotra from Axis Securities. Please go ahead.
Hi, good evening everyone and congrats on a good set of numbers. I just had a few questions, Rajesh. If I see the payments business, the payment, you know, someone alluded that the trucker numbers growth has been a little bit soft, which you alluded to seasonality. The GTV of payments also is roughly around 28-29% but the incumbent business growth is closer to 40% and the payments is sort of the larger part of that pie. Is there like, did the take rate or something increase during this quarter? How should we sort of think about the difference in the growth rates in the payments as well as the underlying revenue?
Basically, as you rightly said, the GTV of payments, which is a little bit of a proxy to growth in the revenue of payments, right, corresponds to that. There is obviously higher uptake of value added services, which has pushed the growth rate above the growth rate of the pure play payment volume per se. That's point number one. Point number two is that as we have mentioned under telematics, today there are three growth vectors, right.
First growth vector is basically the basic GPS device, which basically is used by a trucker to manage the driver location, share the location with the end customer, manage his harsh acceleration, harsh braking, manage to also remotely switch off the ignition if at all he feels that there's danger to the truck and he doesn't want the truck to be in transit at this point in time.
The basic GPS device has more like, let's say, you can assume that that particular business is growing at that 20% to 25% kind of a growth rate from a year on year perspective, right. Second biggest thing is that in India, across multiple states, GPS is getting mandated for purposes of basically either getting the passing renewed or for the purposes of entering regulatory areas like mining, etc., right.
In multiple states these mandations are taking off. In our understanding, roughly about seven to eight states across the country have largely mandated this. If you go back one and a half to two years, this number was only four to five states. These mandations are increasing. We're seeing a very strong growth in the AI-based kind of a GPS device, which basically is leading to a stronger growth.
The third part is that by the launch of the fuel sensor product, where basically we are premiumizing the whole offering because the revenue of the fuel sensor product is at a very higher price point compared to the basic GPS device and it is in the early phases of growth and has grown very strongly also over the last quarter. All of this on a compounded basis, payments and telematics, let's say, has been able to reach the growth rate of that close to 40% plus.
Understood. Now in your SuperLoads business, just trying to get a sense on what kind of contribution margin that business would be because your other businesses' contribution margin is very healthy, right? It can be like 75% - 90%, 95% plus loads, SuperLoads. Would it be that same ballpark or would it be on, say, the lower side?
Yeah, at this point in time I think it'll be very hard to really comment on this business. I think one data point which we've already given out is that we've added the gross margin of the SuperLoads business into the net revenue, which that's the only visibility we'll be able to provide at this point in time. All of these are very fast evolving at this point in time because some numbers which we believed last month probably would not hold good this month because it's a very fast evolving situation.
Yeah, you're absolutely right that most of the businesses we are into today are very high contribution margin businesses. We would expect this business to be a little probably on the lower side. The jury is still out in terms of what the steady state margin of this business is going to be.
In terms of the employee cost, I'm not looking specifically at cash employee expense, which is net of ESOP. That number has been, like, there has been very strong cost control over there. This quarter seems to be actually a decline of almost INR 4 crore. How much more do you think can be squeezed out of the employee strength, employee base, or do you think that this cost will move in some shape or form along types of business goals?
As I mentioned, first of all, if we spend, let's say, if you're spending INR 100 on the sales acquisition costs, right? Sales acquisition costs are highly variableized in our business to be able to make the business very, very, very fungible, right? To be able to sustain any vagaries in the external environment, they've really made it largely variableized. As I mentioned, Q1 and Q2 are seasonal quarters, right? You would see that some of these variabilization efficiencies are kicking in. That's point number one. Point number two, the part of this cost which is largely the core people cost is people salaries, etc. They have actually been growing at an inflationary trend, right? That's point number two.
Point number three is that as we step into the next quarters where the growth picks up for us in this industry, you will see that we will be ending up spending more, right? Also, the increments will be effective from July 1. You'd see all of this basically effectively kicking in and giving that particular growth into the next quarters. I would guide you to not assume any squeezing out of this. You should only assume inflationary growth of these particular expenses.
Just a follow up on the tax on the tax rate. I understand you mentioned that the current tax is essentially the cash tax outgo and the deferred relates to your prior year losses. On an effective tax rate, would it be in the similar ballpark of 24, 25%? How should we sort of think about it?
Yeah. Effective tax rate would be 24%, 25%. When you're thinking of cash outflow, think of it only with respect to treasury income. Deferred tax will be there on the accounting profit until we use out the past losses.
Understood. Basically, the cash tax should be based on your other income, but the effective tax rate would still come to around 24-25% is the way to sort of think about it.
That's correct.
Okay, thank you.
Thank you. Ladies and gentlemen, in order to ensure management is able to answer queries from all participants, kindly restrict your question to one at a time. We'll take our next question from the line of Arpit Shah from Stallion Asset. Please go ahead.
Hi Rajesh, Arpit. Am I audible?
Yes, please go ahead.
Hello. Yeah, I had a couple of questions. I just wanted to understand under the SuperLoads business, how should we look at the unit economics of this business going ahead, or is it still an evolving thing to you guys? Because I just want to understand how the order flow is or how the money flow is in this business.
Just wonder if you can highlight on that, how are we getting customers, how are you getting shippers, truckers and everything, and how is the revenue moving to us in that sense? Have you by any chance started tracking market share in some of the key routes that we are already operating in? What kind of market share have you started capturing in those newer routes? That was my first question.
Some of your questions I've already repeated. I'll just add a few things. Payment flow is fully through us. We pay the trucker, we get the payment from the shippers. The difference between what we get and what we pay is our basically take rate. Right. When we hit, let's say, you know, in a whole hub, when we hit, like, you know, close to 5% plus kind of a market share, we'll keep you posted.
Got it, got it. That's fair. And how.
Please request to join back the queue as we have other participants waiting for their turn. Thank you.
That was only one question.
Ladies and gentlemen, we request you to restrict to one question at a time, please. We'll take our next question from the line of Nilesh Chien from Astute Investment Management. Please go ahead.
Hi. Thank you for the opportunity and congratulations on great set of numbers. My questions are on the financials. First thing is on the other expenses which has gone up and related to this is during the time of IPO we raised funds for sales and marketing for around INR 200 crore. How do we plan to use, you know, those funds?
On other expenses, what has gone up is essentially the gross cost of the SuperLoads business. That's the reason for the other expenses going up, primarily on deployment of capital for sales and marketing. We continue to deploy the sales and marketing cost that is raised from the IPO. You can see that as part of the monitoring agency report that is uploaded probably about a couple of hours back. You can track through that the deployment of IPO proceeds.
Right now, yeah, I've checked that report. We've spent around INR 33 crore. I wanted to understand the journey in terms of how much we would be spending for this financial year and coming years and in what areas.
Yeah. The schedule for utilization of this has been provided in the RHP just for reference. Just giving you these details so that you can find it there. The schedule is provided in the RHP. Broadly, it would be equal over three years and most of our onboardings happen on the ground. This sales and marketing would also be happening with people that we deploy to acquire for our offerings.
Thank you.
Thank you.
Take our next question from the line of Ankush Agrawal from Surge Capital. Please go ahead.
Yeah. Hi. Thank you for taking my question. Just one clarity creation with the SuperLoads. Are we saying that we have stopped monetization of classified platform and now we're only going to monetize the platform by converting those leads into SuperLoads, or the classified monetization in terms of.
The substitution is still on, yeah, classified monetization continues to go strongly. The people who buy the classified subscription on the supply side get a 1% rebate in a cashback on the SuperLoads platform. It is more two plus two is becoming eight, but not really four or three because they are essentially in the mental state of customers, two separate businesses.
Customers who love to post a load and, you know, interact with truckers directly and post, you know, hire their own truck may get also access to, you know, any kind of cheaper truck or whatever, xyz, so they are free to do that. At the same time, somebody who wants a full stack service, ask to find a truck, like let's say, you know, get the pricing done and get the whole execution done, like let's say you will use the SuperLoads.
Everything, and remember that the real intense execution of SuperLoads is only happening in two cities. The whole India is on the normal business itself. There we continue to see strong momentum of the loads as well. Yeah, that's happening.
The monetization is on the supplier side, right? The supplier of.
Normal marketplace. The classifieds monetization on both the sites, shipper pays to post a load. Trucker pays for a, it's a premium product for the base product. It doesn't pay for a premium product. He pays money, let's say for six months subscription. That's how it works.
Okay, thank you, that was helpful. Thank you.
We'll take our next question from the line of Dhaval Jain from Sequent Investments. Please go ahead.
Hello, am I audible, sir?
Yes, Dhaval. Please go ahead.
Hello. Just o n the part of period, I just wanted to understand how do we calculate? I mean, we have monthly testing users in our core business. Can you give me a split on how the payments are recognized in terms of one-time payment and the recurring payment?
What is your question? Can you repeat again?
Dhaval, can you use your handset mode, please? Your audio is not very clear.
Yeah, am I audible right now?
Yes, now you're audible.
Yeah. I just wanted to understand, can you give me the unit metrics of how many monthly transacting users are just in our core business, and how do we recognize the payments in terms of one time payment and the recurring revenues from them?
No, see, first of all, I mean like the second question I'm not able to follow, but I'll probably try to understand that and answer. The first question is let's say assuming roughly 790,000 users are coming on overall, right? Let's say in this you take at least 80% plus, plus 80, 90% would be, you know, largest majority will be the core business. Because see the whole cycle of development always is that there is a, the core business brought all the users and we are now using them into the newer businesses. Hence, there'll always be large overlap there. It's a, like, like it's a direct answer for us. Second question you have is how do we recognize payments?
For example, if you, if you, if somebody is buying a telematics product from us, right, let's say starts using GPS, he becomes a monthly active and a transacting customer. For example, his revenue, assuming that I have collected from him, let's say INR 4,000 or INR 3,500, right, the revenue is basically amortized across the whole 12 months of the subscription time period. Because this is a subscription for 12 months, revenue is amortized across 12 months. He's counted as a transacting user in this month.
Right now on payments, let's say assuming he uses our tolling product, he, let's say, recharges on the platform, manages and everything. There is no revenue, like, let's say, directly getting accounted until the flow through happens of his stack.
Whatever flow through happens of the month we recognize as revenue, and if the flow through is happening is when we are recognizing as transacting customer. Both are co-terminals as transactions. Did I answer your question?
Actually, I just wanted more specific on the part of do we have any ways that we can, you know, track how much is the, like, the revenue per operator basically.
I mean like revenue properties if at all you want it simplistically. See, this is right. It's very complicated in terms of, no, in terms of like one time payment.
If we onboard someone, there will be some one-time payments that we collect while selling the product, and then we have a subscription that is going to come.
That is a very small part of the revenue. The largest part of the revenue is basically the recurring.
Thank you. We'll take our next question from the line of Sarang Sanil from Courser Park Advisors. Please go ahead.
Hello. Hi. Good evening, sir. Thank you for the opportunity and congrats on the set of numbers. My question is with annual pass of FASTag now getting implemented for private vehicle owners, if at all something like this is implemented on a commercial vehicle side, how is it going to impact your tolling business? Are you seeing this as a threat?
Basically, you know, first of all, the largest part of revenue collection for the tolling networks, right, the government road networks, come from the commercial vehicles, right. It's obviously a risk, but then the whole toll collection going down, India can't build more roads. I would only say that I see that risk as very minimal. Nothing on the commercial that typically has been really altered by the government on this. It's left to speculation.
Thank you.
Thank you. We'll take a last question from the line of Nilesh Chien from Astute Investment Management. Please go ahead.
Thank you for the follow up question. My question was on what I understand based on the take rate we have on the tolling business for this part as to what we had reported in Q1 during even in RHP, while the telematics has grown at maybe, you know, 11%, 12%. What could be the reason? You know, because what I expected was telematics would grow much faster.
How are you interpreting telematics has grown at 11%, 12%? Sorry, I think I'm not able to understand that. You're referring to these. You're on your numbers or you're referring to. Which numbers are you referring to?
No, I'm referring to year on year numbers. Tolling and vehicle tracking INR 120 crore is what we have reported for this quarter, and tolling GPS or tolling-based revenue based on the tolling data we get and on the market share we have, I think it's close to around INR 50, INR 55, INR 50 crore is what we have. Balances from the telematics, and comparing with the last year base where we had reported INR 23 crore for the tolling business.
I think we are not aware of the, yeah, I mean sorry, we are not aware of the numbers you're talking about because you've never given this split out. I think directionally whatever you're asking, I think there may be an error because I think that was one of the questions which was being asked during the call that in tolling, because the overall GTV in payments has grown only by 20-29%, the growth will definitely not be 40%.
GTV is growing much faster. I had already answered this question that as part of the tolling it's definitely plus plus, but then GTV is growing much faster. That's the reason why blended we are able to grow at 40%. I think you can refer to that part of the question and you can probably maybe relook at your calculations.
Thank you. As there are no further questions, I now hand over the conference to management for closing comments. Over to you, sir.
No, nothing much for me, I think. Thank you so much for attending the call, and yeah, I mean, we'll head back to our execution zone. 80% of the management's bandwidth is towards really creating new products and services for our customers, and because most of the revenue is platform-led, I think that keeps us light from most of these reporting heavy lifting. I think we get pulled away probably one to two days in a quarter, and we head back into execution. Thank you so much, and hope you all have a good week ahead.
Thank you. On behalf of IIFL Capital and Zinka Logistics Solutions Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.