Good evening, ladies and gentlemen. I am Abhijeet Vikram , Head of Investor Relations. On behalf of IndiaMART InterMESH Limited, I welcome you all to the company's Q4 FY 2025 earnings webinar. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions once the presentation concludes.
Joining us today from the management side, we have Mr. Dinesh Agrawal, Chief Executive Officer, Mr. Brijesh Agrawal, Full-Time Director, Mr. Jitin Diwan, Chief Financial Officer, and Mr. Prateek Chandra, Chief Strategy Officer. Before we begin, I would like to remind you that some of the statements made in today's call may be forward-looking in nature and may involve risk and uncertainties.
Kindly refer to slide number 3 of the earnings presentation for the detailed disclaimer. Now, I would like to hand over the call to Mr. Dinesh Agrawal for his opening remarks. Thank you, and over to you, sir.
Good evening, everybody, and welcome to IndiaMART Q4 FY 2025 earnings webinar. We have circulated our earnings presentation, which is available on our website as well as stock exchange websites. We would be happy to take any questions afterwards. Here are the highlights. IndiaMART has delivered a consolidated revenue from operation of INR 355 crore in Q4 and INR 1,388 crore for the full year, representing a year-on-year growth of 13% and 16%, respectively.
Collections from the customers have grown to INR 541 crore for the quarter, representing about 12% year-on-year growth, and INR 1,626 crore in FY25, representing a year-on-year growth of 10% on the consolidated basis. In Q4, our unique business inquiries were 27 million, representing about a 10% yearly growth. The total number of paying suppliers is 217,000.
Net supplier addition in the quarter was 2,139, which is slightly better than the last quarter. We are continuing to take measures to reduce the elevated churn in the Silver customer first-year bucket and onboarding high-quality businesses as paying customers. We continue to make changes in our products and services for the better quality of leads with better qualification of buyers.
Our Platinum and Gold subscribers, which constitute about 50% of our customer base and about 75% of revenue, continue to have low churn and robust RPU growth as well. We remain dedicated to continuously improving the quality and optimizing the user experience on our website and on our mobile platforms to maximize the value delivered by the platform. Now, I will hand over the call to Brijesh to update about Busy Infotech. Thank you, and over to you, Brijesh.
Hi, good evening, everyone. Firstly, I would like to share with you that Busy Infotech has amalgamated with the two other wholly owned subsidiaries of IndiaMART, Tolexo Online Private Limited and Hello Trade Private Limited. This amalgamation is effective 1 April 2023, and the numbers, therefore, for the last two years have been restated. On the business front, Busy has done a net billing of INR 32.8 crore in Q4 and INR 94.3 crore in the entire financial year.
These numbers also include an impact of approximately INR 7 crore and INR 10 crore, respectively, due to the change in the payout structure of the partners that we had shared last time. The normalized year-on-year growth for both of these, excluding the impact of this change, is 42% and 21%, respectively. The revenue from operations stood at INR 18.4 crore for Q4 and INR 65.8 crore for the entire year.
If you w ere to normalize these numbers and calculate the growth rates, it would be an annual growth rate of 16% and 18%, respectively. Deferred revenue stands at INR 72.3 crore. Busy also generated cash flows of INR 8.8 crore in Q4 and about INR 23 crore in the entire year from operations. During this quarter, Busy also sold 8,000-plus licenses, taking the total count of licenses sold to about 396,000.
The new licenses sold in the entire year are approximately 33,000. We continue to enhance the product and increase our growth rates in the coming quarters and coming year. With this, I will hand over the call to Jitin so that he can discuss the financial performance.
Thank you, sir. Good evening, everyone. I will take you through the financial performance for the quarter and fiscal year ending March 2025. Consolidated collection from customers was INR 541 crore in the fourth quarter and INR 1,626 crore on a full-year basis, representing year-on-year growth of 12% and 10%, respectively. Consolidated deferred revenue stood at INR 1,678 crore, an increase of 17% on a year-on-year basis.
IndiaMART standalone collection from customers for the quarter was INR 506 crore, and full-year was INR 1,526 crore, both registering year-on-year growth of 9%. Standalone revenue from operations stood at INR 336 crore for the quarter and INR 1,320 crore for the year, registering year-on-year growth of 12% and 16%, respectively. Our growth in revenue was primarily driven by improvement in realization of paying suppliers.
EBITDA of IndiaMART standalone business stood at INR 133 crore for the quarter and INR 513 crore for the full year, representing 40% and 39% of margin, respectively. Margin continued to be elevated on account of saving arising from lower customer acquisition and operating leverage. Margins are anticipated to gradually normalize in coming quarters as we focus on measures to increase growth.
Consolidated net profit for the quarter was INR 181 crore, which includes a fair variation gain of around INR 59 crore on account of revaluation of our investment in M1xchange. Consolidated cash generated from operations was INR 271 crore in Q4 and INR 623 crore on a full-year basis. Consolidated cash and treasury balance stood at INR 2,885 crore as on March 31, 2025.
Also, Board of Directors have recommended a final dividend of INR 30 per share for FY 2024-2025 and a special dividend of INR 20 per share, aggregating to a total dividend of INR 50 per share, subject to approval of shareholders. Thank you very much, and now we are ready to take any questions. Over to you, Brijesh.
We will now begin the Q&A session. If you wish to ask a question to the panelists, kindly raise your hand and allow camera and microphone access. Alternatively, you may type your question in the chat menu, and we will revert on it. Please restrict to two questions so that we may be able to address questions from all the participants. We will wait for a couple of seconds while the question key was submitted.
First question is from the line of Sachin from Bank of America. Hi, Sachin. Please go ahead with your question.
Hi, good day. Can you guys hear me?
Can you speak a little louder?
Okay, perfect. Is this clear now?
Yeah, better.
Okay, great. Thank you for the opportunity. I have two questions. First question, this is regarding your net adds. Clearly, your net adds addition is close to around 2,000 or lower for the last seven odd quarters. I wanted to understand some of the steps taken by you guys to reduce churn. Any time frame we should have in mind where we could start seeing an improvement in the overall net adds and hence revenue for you guys?
Okay, next.
Okay. Second question, I just wanted to understand the mix for platinum and Gold users. What we are seeing for a few quarters is clearly your churn being high, and as a result of which, collections growth slowing down, contribution from the not-so-smaller customers getting down.
Why is the mix of platinum and Gold not increasing in the proportion of total revenues? Presume it's rangebound in the range of 75%-80% only. I wanted to understand, should we see this proportion increasing because the revenue from another set of users is going down?
Yeah, this is the easy one. Let me take that first. I think when we started telling you about this, the first time we told you what is the Gold and Platinum total contribution, it was about 72%, if I remember correctly. Then it became 74%, and now it is about 75-plus %. I think slowly and slowly, as the number of customers have not grown, the percentage of Gold and Platinum revenue contribution is actually inching up quarter on quarter.
There is no issue on that side. Whatever growth in collection that you are seeing, largely all of that is coming from Gold and platinum. Just to repeat, Gold and platinum accounts for about 50% of our total customer base and 75% of our revenue now, more than 75% of our revenue now.
Now, coming to the seven quarters of reduced net customer addition of about 2,000 plus minus, yes, I think the first few quarters, about four quarters, we initially focused on service levels, what kind of customer onboarding, and those areas. However, that didn't really do any breakthroughs. We started to look at the product-market fit again at a deeper level. We have found certain changes to be done. In the last two quarters, we have done multiple changes. A few I have already told you.
One where the number of times a buyer was being introduced to a supplier was about 6.5 or so. Now this has come down to 3.8 or so. The second part is earlier, we used to make a lot of inquiries, even if they were low-intent buyers.
I mean, if somebody said, "I'm interested in this product," but not really filled the quantity or not really filled the specification, then also we used to make that as an inquiry or RFQ. Now we are doing a double check either by WhatsApp or by call, and then only making that as an RFQ. By doing that, we are getting a lot more.
Almost 80% of our RFQs today have the quantity and specification well defined and filled by the buyer, which has started to show up anecdotally in our Gold and Platinum customers. However, this has resulted in a lower number of unique business inquiries, a little lower number of unique business inquiries. That actually is showing up as a demand because now the good quality inquiries are much more in demand.
Finally, since most of these good quality inquiries are being consumed by Gold and Platinum, I think we continue to see a good, healthy improvement in renewal rates on the Gold and platinum side of the renewals. There has not been any decline further in the last two-three quarters on that side. I think we are doing enough things, but have we been able to fix the churn at the Silver monthly or Silver annual at the first level?
We have not yet. It will take probably another few quarters before we can go to that. Some of the leading indicators that you can see, if you look at the repeat rate of the buyers in this particular quarter, has slowly inched up to almost 57.5% or so. There are some leading indicators which are there that the product has started to improve well. First-year retention continues to be a challenge, and we are fully committed to solving that out in the times to come. Thank you.
Thanks, Brijesh. Very clear. Just one quick follow-up out here. How should one think about your margins in the time frame where net adds remain at these levels? Because when I look at the margins for the last seven quarters, and I do get there is a quarterly seasonality, but they are anywhere between 29% all the way to 43%. Is there a sort of a range one needs to be aware about from a margin perspective?
Yeah, Brijesh, you can answer.
Yeah, sure. Thanks, Sachin, for your question. On margins, as you rightly said, it continues to be elevated at about 40% range, plus minus 1% or 2% here and there. Till the time we are confident on solving the churn and doubling down on the gross adds, it will continue to look like 38%-40% only. Once we do the pushback on the gross adds and push the battle on gross adds, it will come down to a sustainable margin of about 33%-35%, which we have been maintaining in the last few quarters.
Great. Thanks a lot.
Yeah.
Thank you, Sachin. Next question is from the line of Amit Chandra from HDFC Securities. Hi, Amit. Please go ahead with your question.
Hello.
Yeah, hi, Amit. We can hear you. Yes, sir. Amit, your voice is very feeble. Can you speak louder? We are not able to hear Amit. Sorry, Amit. We still cannot hear you. Aditi, maybe we can come back to Amit if someone else is in the queue.
Sure. We'll take the next question from Swapnil from JM Financial. Hi, Swapnil. Please go ahead with your question.
Hello. Can you hear me?
Yes, Swapnil. Please go ahead.
Hi. My first question is regarding your unique business inquiries delivered. Obviously, they are down 8%-9% Q1Q. You mentioned that you are delivering the inquiries to a lesser number of suppliers right now compared to what you were doing earlier, right? 6.5% coming down to 3.8%.
My question is, have you started getting any feedback from the suppliers as to better convergence now compared to the previous? Or is it still we are yet to see any meaningful results on this side? I understand that as a platform, you may not have the complete data, but certainly, you will be discussing with your paying suppliers on this side.
Yes, anecdotally, I think we are getting good feedback. Even at the platform, there are various feedback mechanisms that give us a leading indicator that customers are liking what we are doing. They are not liking the reduced number of inquiries because they cannot imagine the competition has been reduced for them.
For them, first comes the quantity. Whether the conversion has improved or not, that particular piece, while anecdotally, very few people are ready to admit that. Most people's behavior will tell us when they upgrade and renew that they are happier because, in general, nobody likes to really admit that the platform is working very, very good, at least to us. To you, they will still tell you the truth.
Our leading indicators tell us that whatever we have done in the last four or five months since the October board meeting has resulted into something meaningful. We still have a few works in progress, which we should be able to do over the next couple of months. As I had asked in the month of October, that give us three, four quarters because now that we have started to focus purely on the product side, until I'm fixing that, I'm not going to invest heavy money on the customer acquisition or any kind of advertising.
Understood. My question, just to extend that, will it be possible? I understand right now that may not be the focus, but going forward, if there are better conversions for the suppliers when you deliver less, when the competition is less for them, will you be able to pass on significant pricing to them? I mean, would it be possible for you to take significant pricing hikes, at least to those people who might be benefiting from this?
That's already visible. If you see in the financial, top 10%, ARPU is up 17%.
Okay. What about the Gold customers? I mean, top 10 would be.
This is almost like a Platinum customer. On a Gold customer, whenever it comes up, we will let you know. Even the overall ARPU is up 11%. We are working in that direction, but I mean, it's too early for me to admit.
Okay. Understood. The second question is also on the traffic side. Now, if you see the total traffic that you share, right, that number continues to remain weak. I mean, for the full year itself, growth was hardly 1% or 2%. Now, one is why the number of hits that you are getting on your website or your mobile app are lukewarm? Secondly, are there any plans to invest on the A&P side to create more awareness about the platform or some other measures that would help you increase the number of hits on your platform?
Yeah. I mean, we have started to do certain experiments on the advertising side, whether it is online advertising or whether it is affiliate-based customer acquisition or whether it is some video based. I think over the next two quarters or so, you will see some pilot projects going on on that side. While we speak, I'm still doing some pilot projects, but they are not significant enough for me to tell you at this point of time, maybe next quarter.
Okay. These projects will not have a meaningful impact on your margins per se because you just now said your margins will.
They will. They will. As of now, they are not going to have any meaningful impact on this particular quarter. If they are going to have a, if we are going to scale them significantly, then we will come back and tell you first before doing that.
Understood. To check on the churn rates, can you just give a breakup of how the churn rates have been across the different types of supplier categories this quarter? Just to get a sense as to how they have moved over the last three, four quarters.
Yeah. Gold and platinum remains at around 1%. That used to be under 1%. Now it is about 1% per month. Silver monthly is about 6%-7%. Silver annual is about 3%-4%.
Got it. Just something on the Bizi side, because I see that the number of licenses sold seem to have increased this quarter by a decent number. Earlier, we used to have around 6,000-7,000 licenses per quarter. Now that number has increased to 8,000. Plus, I think that there has been some increase in the relation side also. Any special efforts that have you taken on that side or something which is working on the Bizi side? Would you like to call out something on that side?
When you look at the number of licenses sold, generally, Q3 in any given year is a big quarter for this business. Q4 and Q1 typically are the best-performing quarters. Therefore, we have started to see an uptake in Q4 in terms of licenses sold. This, obviously, is one factor which has resulted in an increase in overall licenses.
Second, obviously, there are efforts being placed on how do we grow sales. Some of those efforts essentially have started to produce results overall. On the margin side or the ARPU going up, we have been able to improve the overall renewal rates within the business over the last two years. There has been a good ramp-up of percentage of customers renewing their subscription. Plus, there have been minor updates or changes in the pricing.
Some bit of that has started to come into the overall ARPU that you get to see here.
Just to get a sense as to how our product will be priced compared to the competition, any sense on the Busy side, like what Tally or Marg or so? What will be the difference on that side? How much scope do you think we can see on the relations?
If we look at very like-to-like product comparisons, the difference, and I'll benchmark this against Tally first, which is the market leader here, we would be about 75% off the pricing that Tally typically offers. I'm just giving you a ballpark average on the, let's say, the highest-selling product that Tally would have versus highest-selling product.
The price tag is in there, right?
Price tags are here.
15 and 18 is about.
15,000.
Correct. That is how we are priced on the first-time license buy when you do in the first year. From the second year, when you look at the renewal prices, we would be equal to or slightly higher in terms of the annual recurring prices at this point in time.
Do you see any scope for improvement on the relations on a consistent basis for a few more periods or especially on the renewal side, since you're already on par?
We think that there is scope for us to keep improving on both the counts of ARPU as well as the renewal percentage.
Got it. Cool. Thanks a lot for your time and all the.
Thank you, Swapnil.
Thank you, Swapnil.
We have a question from the chat box now from Mr. Pankaj Sood. Do we have nearly INR 3,000 crore of cash plus investments on the book? Are we looking at any acquisitions? If not, why not do a buyback or a bigger dividend?
I think we maintain a consistent position on our capital allocation policy. Out of the INR 3,000 crore, about INR 1,800 crore to INR 1,700 crore is deferred revenue and customer advances, which are our liability side. That leaves us with about INR 1,100-odd crore. Out of the INR 1,100-odd crore, we typically maintain safety cash of about, whatever, INR 500-600 crore of safety cash. Then comes either we invest or acquire or we return back.
In the past also, if you see over the last four-year period or five-year period, I think we have returned a fairly good amount of cash back to the shareholders, fairly good amount of the cash. Year on year, that number has changed based upon the buyback and the dividend.
This year also, the board has approved an INR 20 special dividend and INR 30 final dividend, altogether about INR 50 per share dividend, which amounts to about INR 300-plus crore of dividend. I think we are going as per our past performance and past stated policy, as well as the same logic, either we invest or we return.
Thank you, sir. Next question is from the line of Nikhil Choudhary from Nomura. Hi, Nikhil. Please go ahead with your question.
Yeah. Thanks for the opportunity. First question on supplier addition. Dinesh, we have again moved to net subscriber being positive after the last time we have seen decline. Is it fair to say that Q3 was anomaly? The subscriber addition trend will again go back to 1,000-3,000 between those ranges with ARPU growth of, let's say, high single digit. Do you maintain your guidance of collection growth being less than 10%, more or less mid-single to high single digit?
These are uncertain times. At 2,000-3,000, plus minus, I'm almost unable to really comment whether we'll be able to maintain plus 2,000 or because every quarter, there are some kind of seasonalities. We are doing a lot of experiments to acquire this kind of customer, not to acquire this kind of customer. In those experiments, there are possible mistakes and possible hiccups that are possible.
Until unless we really break the 5,000 barrier per quarter, I don't think we should be very fixated on plus 1,000 or plus 2,000. If you really see for the entire year, we have been only able to do full of 2,000 only. I'm really not confident to give you any answer as of now. I mean, I'll take another few quarters when I can give you an answer on that side.
On the ARPU side, I think we are far more confident, and we have been guiding that whatever collection growth or whatever revenue growth that we are getting, and we continue to target around 10%. There, you can say that quarter two was an anomaly where we were just 4%-5%. Otherwise, from the earlier 14%-15% collection growth, I think we have denormalized or normalized to 9%-10%. That will continue to be our target until we fix the consistent customer growth. All of that is going to then come from the ARPU only.
Got it, sir. Just a follow-up on the point you mentioned that we are now thinking on the type of supplier to acquire, right? Is the behavior of these suppliers different from what we were acquiring earlier? While I understand the churn won't be visible now, but let's say in terms of behavior on the platform, how active they are, how responsive they are, or any other internal metrics you are checking to differentiate between the newly acquired customer compared to what you were doing, let's say, two, three quarters back?
Yeah, I think so. Supplier engagement on our platform continues to be almost in the best-ever bracket. There is enough demand for good quality of buyers and good number of quantity of buyers. How we are able to deliver more and more of the same quality buyers? Because any good quality inquiry gets sold out on our platform in less than a couple of minutes or a couple of hours. I think there is enough demand and enough market for good quality buyer. I think as soon as we crack the repeat buyer behavior, I think we should be good to go there.
Got it, sir. Second one, just want to understand basic math behind it and sustainability of the top 10% ARPU growth. This top 10% ARPU growth had been, if I'm not wrong, more than 15% for quite a time, with, let's say, unique business inquiry on an average being lower than the overall ARPU growth. Do you think this 15%-plus type of ARPU growth, at least for, let's say, Gold and Platinum, is sustainable? Or you think there will be a ceiling the way we have seen for, let's say, other category?
I mean, it's a very future-looking answer that you're looking for. The past performance says that for the past five quarters, we have been upwards of 10% ARPU growth for the top 10%. Whether it will be 15% or 16%, I can't say. If you remember, I gave you last year in the beginning of the year that we have now successfully implemented our variable pricing for the platinum customers, which works across the industries, which differs across the industries. I think that has resulted into this consistent ARPU growth on the platinum customers.
That I understand.
At that point of time, we did tell you that this should result into a multi-year 10%‑plus kind of an ARPU growth for platinum customers. Whether that will be 15%‑plus or not, I cannot really assure you. For 10%‑plus, I think we are quite confident that for the next one year or so, that should be upwards of 10% because we implemented the differential pricing sometimes around a year and a half back.
Got it, sir. That's it from my side. Good luck for the coming period. Thank you.
Next question is from the line of Amit Chandra from HDFC Securities. Hi, Amit. Please go ahead with your question.
Hello. Can you hear me now, sir?
Yes, very well.
Okay. Thank you. Thanks for the opportunity. Sir, my first question is on the collections growth that have slowed down. Obviously, we have done slightly better in this quarter, but I'm saying from an overall year perspective, the collections have slowed down. You mentioned that churn is one of the reasons for this slow growth in collections.
Is it also because the Platinum and the Gold customers are opting for more single-year kind of renewals versus multi-year earlier? Also, if you can share what percentage of your top one and top ten customers are going for single-year versus multi-year in this year versus last year?
The single-year and multi-year, you can go to that slide where there's the deferred revenue being standalone deferred revenue. Yeah. That has not changed. The 12-month, what gets recognized in 12-month and what gets recognized after 12-month remains consistent at 63%-64%, which means there's no change in the single-year versus multi-year.
Saying that the number of customers who were opting for a three-year versus one-year remains same. There is no change in that, right?
Yeah. As per financials, also, this is proven that there is no change.
Okay. In terms of the mismatch between the ARPU growth versus the collections growth, the ARPU growth is being fueled by the top one and top ten customers. If there is value being derived from the platform, then what is the reason that it is not getting reflected in terms of the collections growth? Churn is one reason, but churn now seems to be a permanent problem. We have not seen any progress on that front. Can we assume that this 8%-10% growth is the new normal?
I refuse to assume that. I will continue to work my way back to the growth period. As I said, currently, if you see all of that 10% growth is coming from ARPU because there is almost 0% growth coming from customer addition. Can we bring pure ARPU-led growth to 15%? Yes. Can we sustain that for a very long period? No. If we fix the production, can we sustain 20% growth for a very lo ng period? Yes.
We have seen that in the past seven, eight, nine years. In the last 10 years, we have grown from 50,000 customers to 225,000 customers or so. In a media subscription business, I think, or a media advertising business, the number of customers and the ARPU goes hand in hand. If you really see the top-heavy media like television, etc., even they will stagnate if there is not enough number of customers.
If the classified platform, which becomes very, very small, like Craigslist or something, even there, the revenue stagnates. The healthier mix is we believe a very healthy mix of revenue and customer growth is, I mean, ARPU and customer growth is 10% and 10%. Whether you can do 15% plus 10% or 10% plus 15%, I think 10% and 10% is a great mix that can give you a multi-year growth or a multi-decade growth.
We will continue to try and achieve that. It is taking time, but every product market fit with every five-year period in the current changing times of technology and customer expectation. I think the organizations which are able to come back and fix that timely, they can do a multi-decadal growth. We believe that we have done that for the last 30 years, and we'll continue to do that over the next 30 years.
Okay. In terms of the factors which are driving the ARPU growth, obviously, one of the factors is providing more premium services, pricing hikes. Obviously, we have also lowered the number of RFQs per supplier, or we have increased the quality of RFQs.
How is this change of strategy actually being taken by the customers? Is it that we are prioritizing more to our higher-paying suppliers to a larger extent, which is not in line with the strategy of improving our churn at the lower end? How to maintain that balance? That is the question. Obviously, you answered that, but.
Yeah. I got it. I got it. If you see, we are a two-way marketplace. If you go to our two-way marketplace discovery platform, we are a two-way marketplace. One-way marketplace where the buyers come and discover the suppliers. You are right. Always the customers who pay higher, they are on the top. The traditional way of the marketplace is the higher you pay, the higher share of the buyer visibility you get.
However, there is the other side of the marketplace, which is the supplier-led RFQ consumption marketplace. That is an equal opportunity marketplace in terms of the quality of the inquiries because the same quality of the inquiries are available to you as a Silver customer or you as a platinum customer at the same time. There is no diff erentiation there.
The only differentiation is the number of buyers that you can access as a Silver customer or as a platinum customer. Half of the marketplace is equal opportunity marketplace. Half of the marketplace is equal opportunity. In fact, some of the Silver customers, which are self-users, where the proprietor himself is using the platform, we find that many times he is at a more advantageous situation because he himself handles all the inquiries, and he has the mobile app, and he gets the immediate notification.
He is able to compete better with some of the larger suppliers. However, some of the larger suppliers actually have two, three dedicated resources working on IndiaMART, and sometimes they have an auto refresher where somebody keeps looking at the screen to make sure that no important buyer is missed from their side. From our side, we do not differentiate.
It is the supplier's ability and supplier's trust into the platform that he himself puts more effort or more money to whether deal it equally by himself or equally by deploying more permanent resource to handle IndiaMART inquiry. We do not differentiate. We only differentiate based upon the buyer-side marketplace or seller-side marketplace.
Okay, sir. Thank you.
Thank you, Amit.
Sorry. We have a question from the chat box. The question is from Mr. Ankur Pant. Have we taken any pricing actions in quarter four?
On the Silver side, we haven't taken any action. In fact, if you really see our Silver pricing from 2019, the only time it went down was during the 2021 COVID time, and then it went back to the same price. On the Gold and Platinum, we continue to take about 10% hike every year or so, which is the normal thing that we typically do in the month of January or so.
That similar hikes are, and the hikes that happen are no longer applied on the same day because some of the renewals have already been sent. Some of the proposals have already been sent. It takes care of as and when somebody's renewal will come and as and when new sales will happen. These are the slower injection of prices, the price hikes that we do about 10-odd % every year that continues to happen.
Thank you, sir. Next question is from the line of Abhishek Banerjee from ICICI Securities. Hi, Abhishek. Please go ahead with your question.
Yeah. Okay . Thanks for the opportunity. If we look at the traffic number, right, from FY 2022 onwards till now, we would see a roughly 1% CAGR in terms of traffic growth, right? If you kind of try to correlate that with the number of, I mean, when your paying supplier numbers also kind of started reducing the growth numbers, that is from FY 2023, right? Is it kind of time that we start advertising a little more to get the traffic higher, and probably that can lead to a positive flywheel somewhere?
Yeah. We are aligned on that side. The only thing is that in the first root cause analysis, we found certain things to be fixed, which we found that there are anyway needs to be fixed, which we have tried to fix. As I said, this particular quarter, we are doing multiple experiments and pilots on the online advertising as well as on the video side of the advertising or affiliate advertising.
This particular quarter, I don't think there is going to be a significant impact of either on the financials on the bottom line side or on the top line side. If there are any of those experiments found unit economics positive and worthy of scaling up, then we will come back to you and tell you about scaling up.
I mean, given we are at all-time high margins, what kind of, I mean, how many basis points of revenues would you be willing to invest into advertising?
Come again, Abhishek, please. Sorry.
I mean, what would be the quantum of advertising that you would roughly look at?
I mean, it depends. I think last time because we are very new to advertising, again, I mean, last time we did was 2016, and this is now 2025. I think it has been nine years since we have advertised. At that time, we used to spend about INR 40-odd crore on an annual budget, about INR 15 crore into three times.
Things have changed dramatically, but I do not think they would have changed so dramatically that we will end up spending INR 300-odd crore or something. I think that INR 40-odd crore would have become maybe INR 80-odd crore or something like that. Beyond that, I do not have any idea as of now. Even if you take anywhere between INR 50-60-odd crore to INR 90-100-odd crore, it should, on an annual basis, be around five basis points maybe.
Got it. Again, just interview on this one. When you were last advertising, say, in FY 2016, it was a very different world. Now you are talking about performance marketing. Do we have the kind of team in place that can really deliver on these new digital platforms, right? Any thoughts on that? Are you investing there?
That is why I'm saying we are doing pilots. There are teams being aligned, new people being hired, existing people being trained for this new thing. We never had teams for mobile, but we developed teams for mobile. We never had teams for artificial intelligence, but we developed teams for artificial intelligence. We never had teams for accounting. We developed teams for accounting. We develop and align resources as and when things are required.
Understood. Now, if I just look at the last line on this side, which is the employee count. Even this year, we have grown employee count by almost 13%. While I understand some of it will be to support these new initiatives, I am sure the bulk of it is still for servicing clients, right? Now, given that the number of clients has not really gone up, are we at some sort of, I mean, what is the outlook?
I mean, are we ready? This is only shifting of the outsource sales cost to the on-roll movement, which started last year, JFM, which was to be concluded this particular year in few every quarter. All of it has been concluded, and I think now we will be returning back to the like-to-like numbers.
Could you just?
If you really add employee cost plus outsource sales cost, actually, we are zero impact on cost in the entire one year. While this number looks like 13% up, there is zero impact on cost. Manpower cost plus outsource sales cost put together remains the same as last year.
Understood, sir. Understood. What is the outlook going ahead? Do you think we can manage this at a mid-single-digit kind of a CAGR for the next one or two years at least, where we have requisite visibility of revenue growth?
No, I think because this one full year, I think we have had almost zero expense growth. Next year, within six months or so, I think expense will start to increase, and even the number of people will start to increase because as we crack the product-market fit, we will go back to growth mode, and then we will need product people again. People think we are so small a company that people think cannot be filled all the time.
We go in expansion and consolidation kind of a mode. In FY 2022, if you see FY 2022, 2023, we suddenly grew from 2,700 employees to 4,700 employees. I guess this is the nature of our business. We are such a small company. We can't manage yet the growth and consolidation together. We continue to focus on growth and then consolidate, and then focus on growth and then consolidate until we become large enough to do both at the same time.
Understood. Understood. When you were guiding for 35%-odd margins, you are kind of building this also in?
Yeah. That's why I said the long-term sustainable margins are 33-35%. Since these EBITDA margins are quite a bit of depends on revenue growth and collection growth and seasonality of the, and that is why when I have to look at the leading indicators, I look at the collection and cash from operation and margin of the cash from operation. If you go to cash from operation margin slide, there's a graph, cash from operation margin slide. If you look at this slide, this will give you a much more stable way of this 37-38% margin.
Understood. Understood.
This is the leading indicator, and that will remain. Now, we can take somebody else's question, or?
Sure. Sure. Thanks.
Okay. So I have a question from the chat box. Hi. The question is from Mr. Pratik Kothari. Have we already taken major part of the actions to bring down churn, and we will wait and watch on how does it play out, or more is left to be done on that? I think 60% or 66% of what we have found till date to be changed has been done, and about 33% is still work in progress.
Having said that, as we work deeper into it, we find more to do actions. I think by the time we are 80% or so, I think we'll discover another 20% to do. It is never work fully complete. Currently, we feel that we are somewhere around 60% complete. We still have at least some three, four months of work when we can say that now we are 80, 20.
Okay. Thank you.
Thank you, ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Dinesh Agrawal for closing comments. Over to you, sir.
Thank you, everybody, for listening patiently to us. I really admire that you guys are trying to understand our business model and complicated our business model. Hopefully, we'll come back with the flying color soon. In case you have any queries or comments that are left, you can always reach out to our investor relationship team. Thank you, and have a good day and a good weekend.
Thank you, everyone. On behalf of IndiaMART, we now conclude this webinar. Thank you for joining us.