Good evening everyone. I am Avijit Vikram, Head of Investor Relations. On behalf of IndiaMART InterMESH Ltd. I welcome you all to the company's Quarter 1 FY 2026 Earnings Webinar. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity to ask questions after the presentation concludes. Joining us today from the management side we have Mr. Dinesh Agarwal, 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 conference call may be forward looking in nature and may involve risk and uncertainties. Kindly refer to slide number three of the earnings presentation for the detailed disclaimer.
Now I would like to hand over.
The call to Mr. Dinesh Agarwal for his opening remarks. Thank you. Over to you, sir.
Thank you Avijit. Good evening everyone and welcome to IndiaMART Quarter 1 FY 2026 earnings webinar. We have circulated our earnings presentation, which is available on our own website as well as the stock exchange websites. We are sure you would have gone through the same and we would be happy to take any questions afterwards. IndiaMART has delivered a consolidated revenue from operations of INR 372 crores in Quarter 1, representing a year-on-year growth of about 12%. Collections from the customers have grown to INR 430 crores, representing about 17% YoY growth, and deferred revenue grew to INR 1,735 crores, representing a YoY growth of about 17%-18% in Quarter 1. Unique business inquiries were 29 million for the standalone business IndiaMART, representing a year-on-year growth of about 17%. Total number of paying suppliers stood at 218,000. Net paying subscribers in Quarter 1 was about 1,500 addition.
Our Platinum and Gold customers, which constitute approximately 50% of our customer base and about 75% of our revenue, continue to have very good upsell and retention rates. We are committed to improving the platform through product enhancement, better interface, better customer service, and onboarding quality energy suppliers. We are also leveraging generative AI and machine learning to address key issues and use cases to enhance our offerings and make it easier to do business on IndiaMART. Our focus remains on consistently raising quality standards and optimizing the user experience to maximize the value delivered by our platform. Now I will hand over the call to Brijesh. Complaint about Busy Infotech. Thank you. And over to you.
Hi, good evening everyone.
Busy has done a collection of INR 50 crore in Q1. As we had shared in the previous calls, we had implemented a change in the payout structure for our partners and this was done in Q3 of FY 2025. The impact because of this billing change that you see in this quarter is about INR 15 crore, and therefore the normalized year-on-year growth will be 64% in the next year. The revenue from operations stood at about INR 25 crore and the deferred revenue is at INR 101 crore at the end of Q1. Again, the normalized rate of growth on a year-on-year basis is 29% and 61% respectively. The cash flow from operations in Q1 is INR 21 crore. During this quarter, we also sold 12,000 new licenses, taking the total count of licenses sold to about 409,000.
Looking ahead, we continue to focus on.
Enhancing the product, enhancing the user experience, and increasing our growth rates.
With this, I will hand over the.
Call to Jitin to discuss the financial performance.
Thank you, Jesh. Good evening, everyone. I'll take you through the financial performance for the quarter ending June 2025. Reported consolidated collection from customers was INR 430 crore, representing a year-on-year growth of 17%. Excluding the declassification impact of VG, which.
We talked about the normalized growth stand out to be 13%.
Consolidated deferred revenue stood at INR 1,735 crore , an increase of 18%.
On a YoY basis.
On a normalized basis, bargain growth stood at 16%. In your standalone collection from customers for the quarter was INR 374 crore, listing YoY growth of 10%. Standalone revenue from operations stood at INR 346 crore, recording YoY growth of 10%.
Our growth in revenue was primarily driven.
By improvement in realization for payment solutions.
A bit of IndiaMART business stood at INR 135 crore, representing margin of 39%. Consolidated net profit for the quarter was INR 154 crore and consolidated cash generated from.
Operations was INR 161 crore.
Consolidated cash and treasury balance stood at.
INR 2,762 crores as in June 30, 2025. Thank you very much.
Now we are ready to take questions over to you.
We will now begin the Q and A sessions. If you wish to ask a question to the panelists, kindly raise your hand and allow Canvan microphone access.
Alternatively, you may type your questions on.
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 minutes.
Seconds while the question queue assembles.
Next question is from the line of Sachin from BofA. Hi Sachin, please unmute yourself and go ahead with your question.
Can you hear me guys?
Yes you can.
Okay, great. I have two questions. First question would be great to get a bit more clarity in terms of online advertisement, how IndiaMART is looking at it, what is the budget, how much of that is actually spent, and what is the time frame you guys are looking, and more frankly, the output of that. Should we see net ads, for example, accelerating as we come out of this spending on online advertisement? Second question is on Gen AI, what you guys mentioned. Clearly we're seeing companies globally who are adopting Gen AI seeing some benefits either in terms of their revenue growth or in terms of cost control.
Anything you could talk from a medium term or a near term perspective for IndiaMART, how they could benefit by adopting Gen AI? Thank you.
Hi. As informed in the last quarterly concur, we had started doing some experimentation with the advertising performance marketing and some experimentation on the affiliate marketing on YouTube and Meta also. These are early days. I think in this entire quarter we have spent close to INR 5 crore- INR 6 crore and against, you know, one odd crore that we spent in the JFM quarter and the results are early. Results are increasing. However, a lot of optimization needs to be done in order to derive full benefit as well as go at the scale. Currently, we are keeping this budget around INR 6 crore - INR 10 crore per quarter so that we can do a better optimization and utilize that. If you see the early impacts of that, we used to grow unique business inquiry at 10% odd, 11% odd, 12% odd in the previous quarters.
That has shown some jump of about 16%, 17% so that 5%, 6% additional growth in the unique business inquiries this particular quarter is showing up in the additional bias that we could gather. Having said that, I don't think these numbers are, first of all, these are too early to make any larger impact on the overall net add or net retention. Once we do a consistent advertising over the three or four quarters or so, then I can come back and tell you that, okay, it is working or not working. On the second question on the AI side, in the last six, seven years I think we have been using AI, the traditional machine learning AI to do a lot of automation and cost optimization.
If you remember last year I had informed in the JFM quarter that we have started to use WhatsApp chatbot for our buyer side lead confirmation as against the call center earlier and that had two different benefits. One, a lot of buyers were not expecting call from IndiaMART for their lead confirmation. Secondly, at the time of call, the buyers were probably not ready to pick up the call. That chatbot had been scaled and I think that led to almost a $1 million saving in the last year alone. Apart from that, we have been using in the product categorization and in the by lead recommendation system, photo search, voice search, lot of restricted content detection. I have been telling about Indic language and visa spell searches. You can try that.
Many of these traditional AI ML things that we have been using, now with this agentic AI system, hopefully we will get a lot more audit capability and a lot more classification capability that we were trying to build in house. Now because these models are trained on word knowledge and they can be given context, which is a lot of data that is very, very proprietary to IndiaMART. For example, the buyer-seller calls, the customer-to-us calls, they have a lot of proprietary information which is not available to even these AI models to be able to train it on. I think we have a lot of data that is only and only available to IndiaMART, and we could use some of that data to probably do further automation and all that on the B2B side. I'm yet to see revenue opportunities using AI.
I think with a lot more young people coming in, whether it is at our board level or whether you are seeing some of the people joining at, you know, next generation level at IndiaMART, I think they will find, I'm sure they will definitely find revenue opportunities over time. As of now, I think cost opportunities and automation opportunities, as well as better effectiveness in and better customer experience opportunities, are definitely coming and they've been happening since 2018-2019 itself.
Thank you. Anyway, you could quantify the benefits at the cost side would be in.
The medium term?
as I said, a lot of benefits that we have accrued, about INR 4 or INR 5 crore every year, kind of a benefit that has accrued to us in the last four, five years. You can see our margins improving from 25% in 2018 to almost like 35% now. Despite the fact that there has been a run up in the salaries very heavily in the 2021 time frame, 2021-2022 time frame, going forward also I think it will accrue slowly and slowly, but I think we are not really worried at the first side of it. For us, revenue growth is and the experiences be quite important, and we will continue to invest more and more in the experimentation. If you are trying to get any hang on the bottom line, I think let's go with our traditional guidance, 30%-35% margin guidance.
Let us not build upon that.
Sorry, a quick follow up, sir. Clearly, the focus is to spend on advertisement for a couple of quarters. The question out here is what if we don't see the intended benefit? Is there intention to continue to spend on advertisement, or are there any other measures where the company intends to take to further accelerate the net ads from these levels?
A lot of guys have been suggesting for them for last many, many quarters that we should start spending on the advertising. I have been saying that first we will correct the product-market fit that we find. I myself personally went to almost 50 + customers and noted down things. Most of our team members went to so many customers to find out a small, small thing, and we have corrected the quality of leads, the intent of the buyers, the localization search. Many of the blind spots that we found, we have corrected over time, and that gave us some confidence that we can now spend on advertising.
Since we haven't spent on advertising for the last 10 odd years, I don't think we have a DNA in the company ready-made which is optimized for large-scale diversified industry and diversified location-based advertising, which we are trying to optimize on that. If it will not yield the benefit, we will slow that down. I am saying at INR 10 crore per quarter here and there, I think another three, four quarters of experimentation is required.
Okay, thank you sir.
Thank you. Next question is from the line of Anirudh from Solidarity Advisors. Hi Anirudh, please unmute yourself and go ahead with your question.
Hello.
Yeah, Anirudh, you're audible.
Please go ahead.
Thanks for the opportunity sir, just to clarify, I see that step up in your sales and marketing from 14% to 16%. Is this primarily the ad related spends that we just spoke about or are there any other investments that we are making? In terms of the progress that we're seeing in terms of our silver customers, I think the last time we spoke you felt that we were somewhere around 60% kind of, you know, solve the problem per se. Any progress from there since we last spoke?
You can decide on the first question. The increase from INR 47 crore to INR 55 crore is majorly the performance marketing which we had been doing, which Dinesh just talked about. About INR 6 crore of performance marketing is trend against INR 1.5 crore. Incrementally about INR 5 crore- INR 6 crore of performance marketing. That is why you are seeing this spending over here in this diatom.
The gross ads, majorly the acquisition, remains same what we have been doing in.
The past few quarters.
Okay.
In terms of just qualitatively, in terms of how much of the, you know, issues that, you know, say as silver customers, you know, were facing, say, three months back, have you made any progress there? Maybe some qualitative impacts?
I think. Let me clarify. It is not the silver customer who is facing the silver customer face multiple other problems which are related or I don't have a person to follow up or the price they are asking is too difficult or the inquiry that they are looking for is very local set of inquiries. What we tried to correct is the general problems that were being highlighted by silver, gold, and platinum, all of them together. We found that many of them highlighted towards the incompleteness of the lead quality. Many of them had highlighted the.
The.
Weaker intent on the lead quality. I think we have addressed some of those things and many of them had highlighted the why am I seeing non-local business inquiry, whether it is buyer or seller. We are correct in those things and I think it is too early because if we started to correct them about nine months ago or eleven months ago, the benefits of that started to accrue about four or five months ago. We continue to make minor adjustment here and there on that. Expecting a clearly step function jump on any renewal or retention would be probably too early to expect. If it was a science and service problem, I think that can clearly give you a result in two or three quarters. If it is the product and perception thing, then I think it may take a little more longer than expected.
That is what we are trying to do. The good part is that the noise in the market, when you go to many, many customers, if there were five different complaints, they have reduced generally and they are now very customer-specific complaints that we are seeing. The three or four common complaints that people were generally asking for, I think we have reduced one. One common complaint that has increased is that now the inquiries are so good I am unable to find one. How can I get many more of that? Let's see how do we solve for that?
That's heartening to see. Just one final question is in terms of our pricing power with our gold, platinum customers. If I look at the ARPU for the top customers, top 10% customers as a proxy, are we seeing a bit of pushbacks over there or the price hikes that we've taken in the past? We think we can kind of maintain that going forward as well.
I think so. We've always guided that if we were growing on the customer base also, then typically anywhere up to 10% of the growth comes from ARPU and anywhere up to 10% growth comes from the customers. Currently, since there is no customer growth, then ARPU is doing all the heavy lifting and also it is getting the benefit of the denominator being not growing. Both the things are looking at double digits. Otherwise, it should have been anywhere between 5%- 9%.
Got it.
All right, thank you.
Thank you for taking my questions.
I'll join back in the cloud.
Thank you.
Next question is from the line of Prashant from Pictet Asset Manager. Hi Prashant, please unmute yourself and go ahead with your question. Prakash, please go ahead with the question.
Hello, can you hear me?
Yeah, yeah.
Okay. Sorry. A few questions here. One is if you can tell us what has been the churn now. How does it kind of compare with the past?
There is no change in the churn. Churn remains elevated for silver monthly and silver annual customers, and churn remains well under control for gold and platinum customers. On the silver side, as I said, on the annual side 4%, on the monthly side 7%, and gold and platinum remains at about 1% ± on the monthly side.
Why the churn is not coming down? If they are making such good changes on the price?
I mean, I'm.
Probably let's wait for two quarters and see once I have. There are two kinds of customers in our business. One is the monthly customers. Monthly customers have their own because they have put in only INR 3,000 or second month, INR 3,000. While they have an intent to do Internet marketing, they have much lesser intent than those who are paying INR 30,000. The second part is they themselves have affordability issues. In the monthly customer base, typically most of the customers are less than INR 4 million turnover. Since they are committed lesser money, they are also submitted lesser resources to do the digital marketing handling of the digital marketing versus somebody who has paid INR 30,000. Only the newer last three months customer who have paid INR 30,000 are probably experiencing this new bills, new way of doing things.
Their renewals will come up sometimes starting from February or March next year. That's why maybe we are not experiencing that while in the monthly system we have as yet not got much benefit. Maybe another quarter, we should get some green shoots on the monthly side or at least on the gold and platinum side.
Okay, understood. In this inquiry growth that you are seeing now, are there any important categories where you're seeing this increased traction?
We divide over 100,000 categories into four different segments. One is, based upon our internal brackets, the categories where the seller demand or the seller traction is higher. If we divide them into top quartile, second quartile, third quartile, and bottom quartile, most of the advertising effort that we do or most of the improvement that we keep doing is on the second quartile or first quartile. We try and let the bottom quartiles build on their own. Once they reach the third quartile or so from the bottom, then we start working on them. Most of the work that we do is to reduce the bottom quartile and to increase the top quartile.
Okay, interesting. When I look at your ratio of total inquiries to the unique inquiries, that has come down to 3.3 x now. This is way lower than what we've ever seen. Our expectation was that when this ratio becomes less than 4x, that is when you will probably look to step up on the addition of new paid sellers as well. Is that kind of going to start now or do you think you still?
Need time to one is our expectation is that when it goes down to four or three, that's when probably is a good time to say that, okay, competition side for a seller to compete against many other sellers is better. However, these numbers are across all the four quartiles. I'm not going to give you the numbers of each, each of those quartiles, but for each of those quartiles, the numbers are still very, very different. For the bottom quartile it could be 2, and for the top quartile it could be 6. We are still where most of the business is happening. We are still introducing 6 and that is still good from 9 or 10 that we were doing earlier.
We believe that as soon as this starts to show up in the churn, our retention, and that's when we will price the pattern on the sales and marketing.
Okay. Because the only concern would be whether the buyers are now maybe getting less satisfied if their inquiries are not reaching.
Appropriate number of repeat buyers are highest ever, so repeat percentage is the highest. Our internal NPS is also highest. If you see 58% repeat buyer, this is the highest since the COVID shortage time. When the COVID shortage was there, everybody were just coming every day and checking if there is a mask available or if there is a sanitizer available or if there is oxygen available. Ever since then, 58% is the highest repeat buyer and is also seen in the Play Store rating. If you see, it has also gone to highest ever at 4.8, and you can read all the positive comments as well as critical comments. These are publicly available on the Google Play Store. Most of our users are Android users, they are not iPhone users.
You will find a lot of comments, positive and negatives, on Android, while you will find very little traction on the iPhone. Our internal metrics are also showing that buyers are also equally satisfied better. However, when will that start to result into very very frequent repeat? That we don't know. We are doing multiple things like advertising, like connecting the buyer experience. Seller experience was the easiest low hanging fruit because we could go and talk to our paying customers, which were in thousands or 200,000, and quickly gather what are the top two three KPIs that they are looking at. While the buyers are a lot more variety and a lot more experiential, somebody is retail buyer, somebody the SME buyer, somebody is a large buyer, and each one of them have a very different persona of what IndiaMART can help me with.
Somebody thinks of it as, can IndiaMART become my sourcing agent? Somebody thinks of it, why can't IndiaMART deliver me one single product in the same manner as Amazon and Flipkart does. I think the buyer side problem is a lot more difficult, and in the past 30 years we have been mostly solving for price and variety for buyers. On the experience side, I think there is a lot more work that can be done on the buyer side, which we are continuously working to see what will click for a very large platform like this, which is very similar to what Google does or what Meta does.
Interesting. Just one last question is that when we look at the associates, the losses of associates have been continuously going up over years and even in this quarter. Also, it's highlight would this cash burn kind of continue? How should we think about that and where it is mostly kind of going?
Prashant, losses have not increased this time.
There was one investment which we had made in Fleetx, by virtue of it now it has become the associate and therefore little loss from Fleetx also have started getting added into this metric. Therefore, you're looking at that 2% growth has been added. Otherwise, the logic has remained more or less same what it was in the last quarter.
It was 17% of the Fleetx, now has become 22%,
correct.
So Fleetx got classified from inaccurate investment to now association.
I think the pretext loss till.
Last quarter was not there in the.
Share of associates because invest being recorded as an FV TPL investment. Since it has become associate with 20 %+ now we are recording their share of loss also, which is presenting it has increased.
Okay, I understand the last quarter. In general, the longer term trend.
Has been of increasing associate losses.
How.
How do you think about that?
I mean longer term is like, Vyapar was one, then Fleetex is another one, then Bizom is another one. Every time we end up investing in a company which is going to become profitable over the next three to five years time frame, their loss also keeps coming back. Also, in Mehbar we have increased our shareholding from 26% to now 29% odd. Similarly, in the Bezoma we increased our shareholding over the last two, three years from 22% to now 31% odd. That is why you are seeing a little bit of increase in the losses from associates.
Also, Prashant, I mean when we.
Invested in these companies they were at slightly early stage. Now as they are also achieving scale overall on the each company basis, you would see 10 companies moving towards decline of profitability.
Yeah, in the aggregate number, there will be a buffer.
Now how many investments and how many new investments that we would have for every portal.
All right, sir. Okay, thank you much.
Now we have a question from the chat box. The question is from Mr. Aditya Padhi. Your unique business inquiries by paying supplier metric has been showing improvement. Is this a relevant metric to look at?
Yeah, that's a very relevant metric. That's a very relevant metric because that is the number of unique buyers available between all of these being suppliers. That is why we started measuring from a business inquiries delivered per seller, because the seller himself sees only the business inquiry delivered to him while we can see how many unique buyers that we are distributing. This number is slowly and slowly improving, which is a good thing. The highest of that number was in FY 2021-2022 when there was a COVID shortage. As the markets opened up, a lot of that went back to doing business the offline way. However, with the product and service improvement, I think slowly and slowly we have seen some uptick in that. Also, with the advertising, now I think 29 million is the highest ever that we have touched.
Yeah, because we can take the next question.
Thank you. Next question is from the line of Nikhil from Nuvama. Hi, Nikhil, p lease unmute yourself and go ahead with the question.
Hello, can you guys hear me?
Yes,
thanks for the opportunity. Sir, first question on the churn part. What you highlighted 7% churn especially for monthly subscriber. While I understand especially on annual subscriber given those are the ones who are experiencing these changes for the first time and maybe using the platform much more frequently. Why does this logic not apply to monthly subscribers even? I mean we have been investing for some time now. You highlighted INR 1 crore in JFM and then INR 6 crore in April, May, June. Shouldn't the improving unique business inquiries or unique ratio or improving some internal KPI ideally reflect in lower churn especially per monthly?
Yeah, so it's not, but it is taking time, maybe another quarter or so. Otherwise, you know, probably we need to find more such levers.
Got you, sir. Just to confirm, we haven't seen improvement even then to June over.
40,000-50,000 customers that we have in the monthly, and you are right, at least 10,000 of them or 20,000 of them have come in the last six months. They should be seeing some positive. There should be some early share advantages, but we are not yet seeing any of that.
Got it sir. Next one on the correction side, the consolidated collection grew to 17%. You also highlighted that adjusted for the Busy billing it is 13%. Just want to understand from collection to revenue growth perspective, is 17% collection growth makes more sense while projecting revenue growth or 13% going forward.
Nikhil, 17% is a reported number.
As Brijesh explained, there was a change in payout structure, and therefore the.
The normalized number looks like 13%, but for the projection of revenue it would be 17% reported only because that will convert into the revenue from deferred revenue perspective.
Got it.
The next question for Brijesh is how the suppliers or users of Busy are reacting to this change in policy? Have you seen any change there? You have previously talked about that the margin in Busy, the intent is to keep it low. Clearly, we have seen significant improvement during the last three quarters. Is it going to be the.
New run rate going forward?
When we did the change in the billing, we started making this change from Q3 of last year. The implementation has been done over two quarters, and therefore the acceptance levels of our partners to whom we've been doing this drilling and to our customers, that has been absolutely in line. We haven't seen anything negative essentially coming in from any side. Therefore, we hope that when this entire financial year gets completed, we would see normalization of the reporting numbers. Also, on the increase in the margin side of it, if you look at when we are saying margins will be under pressure, it is because when we start to accelerate the overall number of customer acquisitions at a much faster pace than the growth that we get in the renewals and upgrades from the customers.
Currently, what we are doing is there is an exercise on customer winback which is being done because of which we continue to see strong revenues coming in, even because of renewals and upgrades.
In the long run, however, we do.
Foresee that customer acquisition will start to see higher investments, and that is the time when the margins may not continue to be as high.
Our priority will remain on increasing.
The overall customer base, adding more new customers so that we can be able.
To see higher growth
as well as ARPU.
Got it, got it, got it, sir. The next one on the marketing spend, especially digital marketing spend, are we tracking some internal targets for this investment? I know you guys have just started and you know are doing it for the first time. What kind of return you are expecting or target you have, is it more on unique business inquiry? Is it more linked to churn, something, some color there in terms of linking those investments with some targets internally?
The leading business indicators are, first one is the traffic, second one is the unique business inquiry, and the third one is the business inquiry delivered, how many times the RFQ gets consumed. These are the leading indicators because they are immediately there; you are advertising, somebody is clicking and coming back to your platform. If it's coming to your platform, every click is a traffic, every conversion is a unique business inquiry, and every transaction after that in the RFQ level is the business inquiry delivered. Internally, the lagging indicators are many reduced, but the leading indicators we are trying to get. We believe that in the last three months, it is not more complicated than a pure simple e-commerce advertising. We have to advertise every product in every geography separately because we are not the sellers, and we don't switch the sellers from behind the scene.
We are directly connecting buyers and sellers with each other. It's a lot more programmatic effort across hundreds of cities and across thousands and thousands of categories and across millions of products. We believe that the top line of that to be optimized.
It is going.
To itself take a couple of months, and that is why the internal budget has been taken at, I mean, INR 2 crore, INR 3 crore every month and probably INR 9 crore, INR 10 crore every quarter. The good part is that the early indicators are correct, whether they will result into the lagging indicator of churn and revenue and lower cash, that is to be seen. For that, you need to go past, for a size of this kind of a business, at least INR 100 crore, INR 200 crore to be spent to be seen any greater impact in the market on the brand visibility or on the retention or on the ARPU.
Thanks. Just last one on margin, how should we think about margin going ahead, is the investment going to pick up?
What would be normalized
for this particular year? You can safely assume until unless we come back and announce to you, you can safely assume, you know, INR 5- INR 10 crore per quarter kind of investment. It is not going to go heavily above the INR 10 crore mark per quarter itself.
Yeah, that's.
No, you were asking on the margin.
I was just saying that INR 10 crore.
In a quarter translate to about 3%.
Our margin at this point of.
Our EBITDA is hovering around 38%, 39% with the end when as we.
When we, when we.
Believe that the retention problem now has been solved. All the product things have been now started converting into the renewals of seller. We will also fully dependent.
On the cross acts.
You should assume 30%- 33% of the margin as the sustainable margin.
Yeah, got it sir, that was very helpful. Thanks again for taking my question.
Good luck for coming together.
Thank you. Next question is from the line of Anmol Garg. Anmol, p lease unmute yourself and go ahead with the question.
Yeah, hi, am I audible?
Yeah, yeah, you're audible.
Yeah. Couple of things from my end. Firstly, any plans for going into transaction-based structure? Do you believe that the classified-plus model that we are operating at the size of that is kind of limited to 200,000- 2 50,000 paid suppliers, and to maybe grow further we have to kind of switch to a transaction-based model where we provide logistics and complete end-to-end transactions at least in few of the cases.
See, it's not that we are completely averse to that. We have done trial doing that between 2014 and 2017, so for four years, and to launch at 2014, I think we started working in January 2012-2013, so four, five years we did Tolexo in the name of Tolexo transactional platform for B2B industrial products and B2B products. It didn't succeed, and at that point of time, probably our DNA, probably the market readiness, and probably the ability to pay then also, we did not stay behind. There was Monotaro, who is the industry leader in Japan, and which is the joint venture of Grainger and Sumitomo Corporation in Japan. Grainger is the big daddy of B2B transactional business. When they acquired a similar business for industry, then we again invested another INR 100+ crore in that business, and we continue to work with them to see if that succeeds.
Hopefully, that answers your question. We are not averse, but are we going to change the IndiaMART into a transactional model suddenly? I don't think so.
Understood. Just one more thing that I wanted to understand is, see, our unique business inquiries have increased because of the ad expenses that we have done in this quarter. However, what confidence do we have that this will result in increase in the paid suppliers? I mean, particularly when the main issue remains the churn and the ad expenses. My guess is that will only help in the gross additions, which anyways remains healthy for us. Do you believe that we are?
Only doing buyer side advertising, and buyer side advertising help us only and only reduce churn and increase ARPU. It doesn't help increase gross addition.
Sure. Sir, according to you, how many quarters would it take as a best estimate that this will start resulting in positive results on the churn side?
I mean I have taken an internal target that at least nine months of work is required. Three months has only happened, at least six, six to nine months more work should be done. Then only this should be measured at the channel level. On the leading indicator side, I think it is already giving us buyer unique buyer inquiry.
Understood and yeah sure. That's it for my end. Thank you.
We have a question from chat box. The question is from Mr. Rehan Saiyyed. With INR 2,762 crore to throw cash on books and 19% YoY growth in reserves, do we have any immediate or medium-term capital deployment plans, whether for platform upgrades, acquisitions, or return to shareholders?
Thanks, Saiyyed. From shareholder return perspective we have.
Just returned in the last quarter itself INR 300 crore of dividend. What we have done so on the overall capital organization perspective, how we think as a management is.
That we give the safety cash, which is the advance which we have received from the customer, and then we see.
If we need to invest in.
Any business, of course, we go.
To the board and take the approval from that, and it should be in sync with what we are doing.
Whether it is, it should be in the Internet business, it should be something.
Related to B2B and it should be related to the MSME. As and when we get denied opportunity, we go to the port for the open and we do that as for the like whenever it comes the right time comes, we'll report that as well.
And distributed.
I've already talked about that.
We have given the dividends. Hope that answers your question.
Thank you. Next question is from the line of Abhisek Banerjee from ICICI Securities. Hi Abhisek. Please unmute yourself and go ahead with your question.
Yeah.
Yes, you're on.
Thanks. My question would be with regards to, you know, I wouldn't be able.
Would you be able to give.
A sense of what is the business inquiries delivered to the various segment of suppliers that you have vis-a-vis, you know, the top 10% customers and then the remaining paying customers and what proportion of, you know, business inquiry delivered actually goes to the non-paying customers? Also wanted to kind of understand.
You know, it is not clear. Your voice is having a lot of echo or a very high frequency voice. Maybe there's some echo on the voice.
Okay, is it written now?
Yeah, maybe you can try speaking a little slower, and then we can probably note down.
Okay, what is the proportion of business enquiries delivered to the different classes of sellers on your platform? That is, the top 10% paying customers, the remaining paying customers, and the customers who do not pay. I mean the suppliers who do not pay. If you could give a proportion of that, that would be really helpful. Also, wanted to understand what is happening with regards to adding new categories that you have spoken of in the past. Are you really able to create more categories which can potentially bring in our paying suppliers in the medium term? If you could speak on the issue of funds.
Yeah.
On the inquiry side, between 80%- 85% of the inquiries go to the paying set of customers, and anywhere between 13%- 14% to 17%- 18% inquiries are typically delivered or go to free suppliers. Within that gold and platinum, I don't have the number in this manner in terms of the percentage.
But.
I know that on an average, approximately 70 odd inquiries go to silver and then I can come back with those numbers. I don't have those numbers handy with silver, gold, platinum that I can tell you what is the percentage of inquiries that are delivered. I must be having in the data book, but I will take some time to figure that out. I'll come back on that and my IR team will send you that number. Coming on to the second part, expanding on the category side.
So.
Our top 10% customers used to contribute about 40% of the revenue about five years ago, and whenever revenues itself was much, much lower. Today, about 10% of the customers contribute about 50% of the revenue. If you remember from five years ago, we used to say that platinum customer base and about 10% are same. We no longer say that. Platinum customer count has exceeded far more than top 10%. The number of categories has also expanded. If I remember, most of our business used to happen in top 20%- 25% of the categories. Earlier today, almost 40%- 50% of the categories, we have a good amount of business happening.
If you see the number of total paying suppliers, if you compare this one with a five-year-old screenshot or a six-year-old screenshot, the first time we put it in 2020 or so, then you can very well see that these 2%- 3% numbers at that particular time and that 2%- 3% number at this particular time. A lot more categories have become a high, high moving category, and that's a very core KPI that we measure internally, and our category team measures internally and works to bring a similar bottom-up pyramid kind of a category, moving them upwards towards that.
Understood, sir, understood. Have you ever, you know, tried to evaluate the feasibility of charging something like platform fees across the board? As in, I mean with UPI, is it even possible to, you know, charge something to the carriers who are not paying anything?
There are not many examples of classified websites charging for a consumer on a consumer side or on a buyer side fee. However, there are recent experimentations by Twitter or by Instagram to buy a blue ticket by consumer or so we keep contemplating every now and then what could be equivalent to Amazon Prime in a classified business. Not yet. I think we have. That's a long moonshot.
Thank you so much.
Thank you Abhisek. Ladies and gentlemen, that was the last question for today. I now hand over the conference to Mr. Dinesh Agarwal for his closing comments. Over to you sir.
Thank you, ladies and gentlemen, for joining our quarter one FY 2026 conference call. We have tried to address your queries in the time available, and we have also given detailed information in our presentation. Detailed financials are also uploaded on our website as well as the stock exchange website. If you still have any questions, please feel free to connect with our Investor Relations team. Their email ID is available on the website, and thank you very much. Have a nice weekend.
Thank you. On behalf of IndiaMART, we thank you for joining us today. We now conclude this webinar. You may disconnect the line.