Q3 20/21

Jan 19, 2021

I would like to welcome you all to the company q three FY twenty one earnings webinar. As a reminder, all participant line will be in the listen only mode, and there will be an opportunity for you to ask questions once the presentation conclude. Joining us today from the engagement side, we have mister Dinesh Agarwal, managing director and chief executive officer mister Vijay Agarwal, full time director and mister Prateek Tundra, chief financial officer. Before we begin, I would like to remind you that some of the statements made in today's webinar may be forward looking in nature and may involve risks and uncertainties. Kindly refer to the slide number three of the earnings presentation for the detailed disclaimer. Now I would like to hand over the call to mister Dinesh Agrawal for his opening remarks. Thank you, and over to you, sir. Thank you, Ravi. Good afternoon, everybody, and welcome to the IndiAmart's quarter three FY twenty twenty one earnings webinar. I would like to wish everybody a very, very happy New Year and hope you and your loved ones are staying safe and healthy. We are hosting this conference through FLOOR, a platform by our associate company, tentix.com. The earnings webinar is also being shown live on Indiamart's Facebook page and YouTube channel. We have already circulated our earnings presentation, which is available on our website as well as our stock exchange websites. I'm sure you would have gone through the presentation, and I would be happy to take any questions afterwards. In the third quarter of this fiscal, we saw a recovery in the economic economy and business across the board. I'm pleased to report a strong financial report performance of Indiamart during the quarter. Our consolidated revenue from operations stood at INR174 crores, representing a growth of 5% on year on year basis. Collections from the customers for the period reached INR 179 crore, a sequential growth of 9% quarter on quarter, but marginally a decline of two percent year on year as compared to quarter three FY 'twenty. December collections were better than December pre COVID levels. The jump in the buyer traffic was visible in the last quarter and has sustained this quarter as well. Total traffic has grown by 35% year on year, reflecting approximately 85,000,000 visits per month. Business inquiries delivered increased by 37% year on year to 154,000,000, with our ninety day repeat buyers standing at approximately 60%. During this quarter, there were approximate 7,000 clients addition into the net paying subscribers, resulting into 148,000 customers at the end of the quarter. Now we are back to the March 20 paying customer levels of 147,000. Indian Internet growth has accelerated further after the pandemic, and many new opportunities will emerge in the coming time. Keeping this in view, in yesterday's Board meeting, shareholder resolution to raise funds was approved on eighteenth January for approximately up to INR 1,100 crore. The proceeds will be utilized for organic or inorganic growth opportunities in the spaces strategic to Indiamart. Now I would like to hand over the call to Prateek to discuss the financial performance in detail. Thank you, and over to you, Prateek. Thank you, Dinesh, and good afternoon, everyone. I will take you through the financial performance for this particular quarter. Consolidated revenue from operations was INR174 crore in the quarter, a growth of 5% year on year, which was primarily driven by a similar increase in paying subscribers year over year and a marginal improvement in our average realizations per supplier. Consolidated EBITDA was rupees 88 crores, representing a margin of 51%. Net profit for the quarter was rupees 80 crores. We've been able to sustain these margins as our offices stay closed and hiring has recently started. As in when the business volumes reach normalcy, we expect some of these costs to increase. Cash flow from operations during the quarter was rupees 77 crores. As of thirty first December, cash and investments stood at INR1143 crores. Thank you very much. We are now ready to take any questions. Thank you, Prateek. We will now begin the Q and A session. Please allow camera and microphone access if you wish to ask a question and use the raise hand option. You may type your question in the discussion panel, and we will revert to you if any question remain unanswered. Please introduce yourself and restrict to two questions so that we will be able to address questions from all the participant. We will wait for a couple of seconds while the question queue assembles. First question. Yeah. Hi. Please go ahead with the question. Please unmute yourself and go ahead with the question. We'll move on to the we'll move on to the next part. Please go ahead with your question. Uh-huh. Please unmute yourself and go ahead with the question. Next question is from the line of Manul Shah. Manul Shah, please go ahead with your question. Yeah. Hi. Thanks for the opportunity. My first question was that we had recently filed a case against one of our competitor for IP theft. So can you update us on this case and, like, where is this case right now at? That will be my first question. My second question was that with the increasing in the competitive in intensity, would we start spending on advertising? Because currently, we are not spending anything on advertising. And my last question was on the recent fundraising. We are already setting on adequate cash and cash balance in our balance sheet. So why is there a need to raise such a huge cash right now? Hello? Yeah. Hi. So with respect to your three questions, the first question you asked about the legal proceedings we have initiated against one of the competitor. So Which hearing? You know, it was the it's it's next hearing is scheduled on January 25, and we filed this case sometime in the month of November, wherein we have highlighted to the court about our grievances through which court has granted an interim injunction in our favor. And the next date is in January 25, so it will proceed as it goes along. How confident are we on our claims, like So on this one, it's only one hearing that has happened. So what Sorry. Am I audible? Yeah. Yes, sir. So in this only one hearing which has happened so far in which we have presented our case to the honorable court, and honorable court has granted that injunction in our favor. The competitor, the other party is yet to revert with their response to our defenses in front of the court. Hopefully, by the next time of hearing, they would they work with their response, and then the proceedings will take this accordingly. Okay. And on the ad spend? So on the advertising, if you see, we haven't done any significant advertising since FY '17. The percent of our traffic, which is about 80,000,000 widgets a month that we get is organic traffic. And even the last time when we did advertising in 02/2017, it was for brand building and, you know, recall value. And we feel that currently, especially in the last year, the traffic has gone up by 40%. And also the need for India market has been we can use by many people. Whereas we don't feel there is a need for advertising as of now. But if as in when there would be any need for advertising, we will definitely let you know and do that thing. On the cash side, as I said earlier, that India Internet growth opportunities further accelerated during the last year, and many new opportunities are likely to emerge as the transformation progresses. With 700,000,000 mobile phones and and and a step function jump in the the SMEs and businesses using it Internet for their purpose. We believe that there will be many more opportunities that will come. We intend to make a long term organic and inorganic strategic growth growth opportunities. And in the area of India market operation and its against the adjacencies. On the cash part, you can see that there is a $625.33 crores in our deferred revenue out of the total cash balance we have, which leaves us at the remaining cash balance cash reserve of INR 500 crores. So that is how and we have seen and met multiple companies and multiple sectors over the last year. And based upon our own assessment, we feel that 1,000, INR 1,100 crores kind of a fundraise should be necessary to fund our growth ambition for the next two years or so. Like in a controlling stake or would be investment kind of acquisitions that we're looking at? So it is difficult to say as of now. We intend to make long term investment in strategic spaces, and we will try for one or two acquisition along with a couple of minority investments. And we'll continue to evaluate proposals, and we will let you know as and when anything comes. Next question is from the line of Anmol Gurk from Motilal Oswal. Yeah. Hi. Good afternoon, everyone. So just I had just couple of questions. First is just on the previous question, if you can delve on dwell more on which are the areas that we are targeting for the acquisitions for the fund raise that we are doing? So as I said, you know, we intend to make in the investments or acquisition in the strategic spaces where we can leverage India Mart's ecosystem. So whether it is the reach or whether it is the customer, and it should improve customer experience, engagement, and monetization. The broader spaces that you can see, we have always been talking about fintech and SaaS. And vertical commerce is one such thing, which is also very important. We have recently seen a lot of activity in the conversational commerce, and we believe that there could be opportunities. We have done an investment in the part, which is into the accounting and tax invoicing. There are receivables management, sales and distribution management, and we have already done an investment and the loan is still on the sales and distribution side. And then there there are, you know, cloud communication, payroll, logistics aggregation, and tracking platform. Within fintech, if you see, there could be payment facilitation and credit facilitation. We already have a payment subsidiary called paymentindiamart.com. However, we haven't yet done any kind of a buyer or seller facilitation of the credit on the transaction side. And then there are API banking, which we would like to offer to our SMEs. That is another area. Business insurance is another area. So there are multiple areas that we have seen in the past. And within the, you know, vertical side spaces within the vertical spaces, there are agricultural, there are industrial products, there are items like, you know, shoe wholesale or many other kind of items are available. And the basic team has to be either it has to be a transaction enablement or ease of doing the business by way of business process enablement. So I think enable the commerce to how do we become one stop shop and keep improving our customer experience engagement and expanding the network for monetization. That should be the overall theme. Yeah. Sure. Sure. Sure. Thanks for elaborate reply. And secondly, just wanted to ask that have we any to increase our pricing of the base packages that we are offering right now? So we have been doing price changes multiple times. As I've said, in the past also last year, we have seen how do we offer a shorter duration and more affordable package because the people were facing quick cash run, and we wanted more and more people to come on the platform. You can see that if you go to our deferred revenue slide, you will see that the current portion of the deferred revenue has gone up from 60 odd percent to to sixty sixty five five odd odd percent. Percent. And similarly, on the base package, we have done two changes. One, the base package was initially a INR 5,000 setup fee and 3,000 rupees inclusive of tax on a monthly basis. Now we have made it simplified so that the there is a 3,000 plus tax, which which offers two things. One is it's simplified to sell one kind of a package. And second, it lowers the entry price from upfront 8,000 rupees to now 3,540 rupees. So we have done that change. Apart from that, in the previous quarter itself, we had introduced the concept of daily by leads. If you remember, we had all our packages like silver, gold, platinum. They had a widely packages which were on the weekly basis. So now we have introduced the daily quota as well to make their customers come back on a daily basis as well as a weekly quota. So the overall buyer base since has gone up by 40%, We have also increased the weekly quota for silver monthly packages, one every day plus seven per week. And for and one and multi year, one every day plus 10 per week. Similarly for gold, two per day and 20 to 30 per week depending upon which tier of gold. And platinum three and four per day and 50 to 100 depending upon the tier of gold. So we have done certain changes in the pricing, and we have seen very good result. Many of our suppliers, one, because of the pandemic, I think they have done a good Internet adoption, and they found useful value in India market in coming on a daily basis. And we have seen that people who are consuming by leads are accused on on, say, seven days a week or ten days a seven day seven days a month or ten days a month has gone up to fifteen days a month by introduction of these daily expiry value packages. Yes. Yes. Sure, sure, Dinesh. And just lastly, my end is that so earlier, have talked about that half of the margins will be sustainable on a longer term basis. So what are the factors that are letting you say that what what on the cost optimization front that we are doing that will be sustainable on a longer term basis post we started start paying out variable pays to our employees and also start hiring. Sure. So I'm going to look at cost structure in the pre COVID level was, you know, opening around 120 crore per quarter. Last year, the same quarter, we did a 122 crores of cost. You know, in this particular quarter, you know, our cost to total cost was around 85 crores. And so there is roughly around 30% reduction in the cost on an overall basis. And even if you look at the split of the cost, broadly, you know, we had two types of cost. One is the people and people related, which is manpower and outsource sales. So therein, the cost has come down from 94 crores to roughly around 65 crores in this quarter. The other overheads in g and a where the cost has come down from roughly around 30 odd crores to, you know, 22 crores in this particular quarter. If you see the the headcount cost, this the change has largely been because of the reduction in the headcount or the the manpower what we had with operating with the lesser people. Second is on the g and a side, since we're continuing to work from home, our offices are stay closed. So there is lot of savings on the g and a side we are seeing. All in all You mean permanent basis? So I'm just saying that and there are certain variable cost which was related to the businesses, which we were seeing savings. Going forward, as we come back to our normal levels of businesses, some of these costs would certainly come back. And the cost which would not come back would be optimization that we would have done, which is largely the g and a cost of offices. From 80 offices now, we are operating with roughly around 40 odd offices now. Then there are certain automations that we have done on the processes, which would also result into some sustained savings. There are certain efficiency improvements which would also be there on the manpower side. So all in all, our estimate was that roughly around 50% of these cost would sustain, and 50% of these savings would come back. Yeah. I would I would add some some permanent kind of items that are that we are seeing. One, I think over the last six months, we have seen that some of the sales can be done using channel sales partners who are daily based channel sales partners as well as the sales force based channel based. There are the cost has gone completely variable. We have seen with today, if there are if there are 500 if there are 1,000 people who are working on the new client acquisition, which are employed by DMR, a fixed cost basis, about 500 people are working as channel sales partner. Second thing, we used to have a lot of BPO and call center operations, which were being operated out of the physical call centers. And there were travel and proceeding and all those costs were involved. That all of that has moved to the cloud telephony based system, we are seeing approximately, you know, 10% of saving per seat on when the agents are working on work from home order. And we don't plan to return those call center based or BPO based operation back to the large call center actual center coming in. So I think there is a we have moved certain products which were we were using in the in the server end. We have moved to the more open source softwares, and we have seen significant saving coming from their their side also. We have also seen how our meetings can be done on the Zoom or on the video call today. So we believe that whatever travel cost that we were, you know, doing either for the investor relation purpose or for the sales coordination purpose, at least half of that would be look look will look like a permanent saving. And now also we are expanding hiring out of the hirings that we are hiring today. We are hiring almost 50% of the people in the work from home operations. There, we believe that, you know, capital cost and and the office going and coming, the office per seat cost is much lower. And in fact, we are able to pass on some of that cost to the employees and some of the benefit also to the employees. So on one side, we are able to increase their take home. On the other hand, we are able to decrease the overall overall cost to the company. So these are some of the cost, and that is why I believe that out of the the $30.30 odd crores that we have saved in the cost, we'll probably get back 15 odd crores, and we'll probably save 15 odd crores per quarter. Thanks thanks, Ramesh and Prateek. That was very, very elaborate. Elaborate. I'll jump jump back into Thank you. The next question is from the line of Sujit Jain, Ask Investment Managers. Please go ahead with the question. Thanks. How do you determine what is the ROI of a subscriber, a supplier? Let's say, I'm a subs you know, a supplier and a subscriber, how much business I get generated, through India Mart? Because that is crucial to know and to judge eventual stickiness of me with India Mart. Sir, ROI is very different for different customers. We are a lead generation platform. So what the way we measure ROI is how many by leads customer is consuming, how many days he's coming to the platform and consuming by leads, how many calls he's receiving, and how many inquiries that he's receiving. Nowadays, because our CRM system has also become quite useful and quite daily used, also come to know how many times people have replied to the inquiry is it, and how many times people have made a callback from the our CRM system. So all in all, we are able to measure the ROI in terms of number of calls or inquiries or by leads received by the person and number of calls and reply being done by the supplier. In terms of the actual ROI, we'll depend largely upon different different industries and different different, you know, geographies. So we do not know exact transaction. Some of the data that we get is where people use our platform for payment service. They also become to know what kind of transactions are happening on the platform. So these are the some of the ways that we calculate the ROI. And if the engagement level continues to increase or continues to remain there, then we understand that people will invest their time only if they are getting an ROI. Otherwise, they would not be investing their time. These are the some of the ways that we measure. You want to add something? Yeah. Please go on. So one of the, you know, days we also go ahead and look at this is what is the overall number of inquiries that every paying subscriber essentially gets. So we we have that number typically ranging between about, you know, 400 or The other parameter which becomes important to measure the ROI is at what rate do we see these inquiries getting converted into So we have a proxy value around this measure, whereby we receive more than 150,000 plus feedbacks every month from buyers who send inquiries. And using that data, we can articulate that, you know, the about 40% of these buyers, we have done business with an Indian market supplier, which we if we translate that conversion, yeah, on a per supplier level, we believe that about six to 7% of these inquiries received by supplier So a multiplication of this conversion along with the average inquiries received by a paying subscriber actually gives us a good indication of that. Of course, it's an average. So, you know, we'll have customers having better order values being received versus, you know, some customers having lower otherwise. But it it does give us a good view on where this trend is moving. Is there a way to capture more and more data of conversions of inquiries into sales for the subscriber? That will give you early signals as to the stickiness of the subscriber. That was the point. Of course, that is the direction we continue to work upon. And in that direction, only we introduced the preferred number service as the first and then by lead as the end and the CRM reply and CRM So all of all of that effort is in that direction. Because as you can understand, b two b is a very different thing, you know. There are tons of categories and 100 categories and different geography. And then there are custom products, then there are made to other products, there are wholesale products, there are products being gone from manufacturer. There are machines which are made to the specification. So it is it is not easy to do a simple buy now kind of a product and then restrict your industries to only shippable and official ready made product. So we are we are trying these different methods to find out more and more ROI. I think the best ROI that we are able to see is the engagement on the platform. You know? If the if the supplier is engaged on a platform three days a week, we believe that he's getting the ROI. How does one correlate the daily unique business inquiries, which is 25,000,000 in this quarter? Let's say, as an example, two total business inquiries delivered $154,000,000 in this quarter. So 35,000,000 unique buyers have sent an inquiry, which has been received either by lead or either inquiry or as a call by total number of 154 inquiries. So you can imagine that one inquiry one one supplier one buyer would typically either send an inquiry to two, three different suppliers, and two, three different suppliers will consume a value of a a particular buyer. So one one buyer converts into, like, six inquiries. And one last question, 1,100 crores of fund raise. How big is your m and a team? How many prospects do they meet every quarter and their compensation and their reward structures? We are in a in early days of our our team. We have a a three member full time team as of now. One very senior person whom you would have interacted. He was earlier taking care of investor relation also. And compensation details are not relevant at this point of time. We meet we meet and evaluate almost like 25 to 30 companies every month. You know, we do secondary research on another 25 to 30 company where we do not meet. So all in all, we are able to meet almost, like, you know, 25 to 30 companies personally and 25 to 30 companies where we do the research. So in in the last year alone, I think we would have done almost, you know, 150 per quarter. So about 200. 200 a year. 200 in a year. Yeah. 40 plus a quarter. So we have done about 200 in a year. And I'm sorry. I I said per month, it is a per quarter analysis. So we do almost like 25 per month personal meeting and 25 secondary research. And all in all, we have done almost 200 different company meetings. Thanks. Next question is from the line of Pethys Mehta, Old Bridge Capital. Can you hear me? Yes, we can hear you. Please go ahead with the question. Yeah. Great. Thanks. Thanks so much. Sir, one question is, you know, again, taking, you know, taking a lead from the question which was just asked. At what you know, if you could just give us some maybe some qualitative understanding about how do you go about you know, how how do you figure that a customer is right to either be it a paying customer or to move him up to a gold or a platinum level customer? How do you really go about that process? Well, you are asking about our sales process? Yes. Yes. How do you how do you really, you know, try and mine mine your entire supplier base of 6,500,000 into actually paying subscribers and the stickiness? Okay. Interesting that you asked. This particular year, a lot of significant work has gone into that mining of the because, you know, historically, a lot of that work was being done by our field field sales force, and they would meet the customer and continuous keep in touch with the customer. However, when we face the the challenge of working from home and we could not have gone to the customer, we have put a lot of data science towards this particular so if I tell you how do we convert a free to a paid, we have multiple indicators on industry based, geography based, whether he's a GST registered person or not, how many times he has visited our platform in the past, how many times he how many products he has added, how many buy leads has he seen. Based upon this, we prioritize the the our database and create a hot lead, and then we have a complete CRM, which is in house built, which we call the mobile based ERP as well as the web based ERP, where we have this automatic allocation to the our sales team, and it comes in the prioritized order whom they should be calling and where there is a chances of conversion higher, and where there is a chances of success for that customer is high. There is one is the customer is speaking with the customer is more likely to benefit, and the second is the customer is more likely to convert. On the combination of the two, we do that. And second part is the upsell part or upgrade part. It again, it happens two ways. One, we come to know based upon the ROI engagement levels that a customer is having on the platform. And then, again, we see that if he's consuming by means regularly, if he's using the CRM reply tools and callback tools to manage his customers well, then we are able to ask him whether he would like to upgrade. On the other hand, many calls inbound come, and they want to ask for higher packages. How do I take a premium listing or how do I take a search listing or how do I get a custom badge? So there is a inbound customer request also on which we are able to upsell. Okay. Sir, and the the other thing is wanted to understand, how does, say, two parties negotiate the terms of trade on your platform? Or is it completely offline for them? Once you make them meet, your job is over and they do that offline. Is is that how it works? We have a CRM tool, which which is which which many of the suppliers use for managing their interaction with the buyer. And but as I said, we do also offer a payment mechanism. But most of the b two b transactions are very, very high value in nature. And many times range into multiple weeks or multiple months. Thereby, a lot of those transactions happen offline. Okay. Okay. Then the third question is, to what extent is the app or the zone now integrated in your platform, and how many customers are actually using those services? Webinar, let me first tell you. I think on the Vapar side, they continue to grow well. They are still a small company. I think their current quarterly revenue run rate is about INR 3 crore a quarter. And that is a significant improvement from one year back. Their number of customers have also gone up significantly. Last I told you probably it was about Now they are closer to like seventy, seventy five thousand customers. We are helping them getting leads through India Mart. We are also thinking of, you know, using our, you know, sales seller data network to further increase that reach, but we have not yet fully integrated into Yamal. We believe that they still have some distance to cover before we could integrate. And and I'm also learning more about this new side of the business, how best is to integrate over a period of time. Coming to the Visome, Visome is Visome has multiple facets. One is Visome acts like a Salesforce management tool for the brands, large brands, to manage their Salesforce and dealer distribution system. And then they have a insight tool where they are able to get some insights on what retailers are asking for. We believe that out of the three systems, you know, the field sales management, distribution management, and and the insights that we BI and analytics. I think from the distribution side, we would like to work with the brands to see if we can get all their distributors on premium art platform as well. Yes. But that is also is going to take some time. As of now, I think they were badly hit with the lockdown and corona times. They have recovered well, and I think they continue to be at the similar level last year in terms of revenue. And last year, their revenues were about 35 odd crores. Can I just squeeze in one last question over here? So, you know, your your number of paying customers suppliers have now gone up back to 1 lakh 48,000, but your deferred revenue hasn't really grown much in the last three quarters. It essentially tells me that all these new customers are basically monthly or quarterly paying customers. They're not long they are not long multiple years paying customers. How do you how do you relate to get back to, you know, to an earlier run rate of going to the ongoing long duration customer? Yeah. So if you see the first quarter of this financial year, the first quarter of this financial year, there was a huge difference between the revenue and the collection. We were on one side where the revenues are coming from the deferred revenue and the collections heavily dropped in the first quarter. So so the the most of the deferred revenue loss, you know, decline that you see is coming from the first quarter. In the in the current quarter, there is a 178 crores of investment from customer and 173 crores of revenue flowing. So again, the deferred revenue has gone up by 5 crores. I think in times to come, it will go up again probably in case of quarter. However, if you see, I've been telling you that we are earlier, we were selling mostly annual and three year package when it came to gold and platinum subscriber. But during the pandemic, it was our duty to help the suppliers opt for a lower lower price package. We couldn't receive reduce the actual price of the product, so we reduced the the duration of the product. So now those products are being offered in a six monthly, one year and three year packages. Since the six monthly packages have gone up, the deferred revenue has declined a little bit, and the current portion has gone up from 60% to about 65%. Okay. Okay. Great. And so just one last question. You you would you have been adding about four to 5,000 customers paid customers on a monthly basis sorry, on a quarterly basis. When do we start seeing more more additions at higher ARPU levels? Because, you know, the again, the number of inquiries have largely been flat for the last many quarters. Only it's in this first three quarters that we've seen inquiries pulling up and thanks to COVID. But one worry is that, you know, as the situation down places, would the inquiry levels come off? And then how, you know, what is the trajectory of, you know, customer This is very very imaginary question. I mean, the number of when the suppliers number of suppliers increase, the number of buyers increase on our platform. The suppliers have been increasing slowly, so the buyers have been increasing slowly. Now that the buyers have gone up significantly by 30%, the suppliers' data will follow in times to come. And that also remains on the our ability to sell and the nation's ability to get the economy on the right path and opening up of the as I said, 90% of the categories have started to do business almost like a pre COVID level. 10% categories are still badly suffered. You can imagine offices like ours are completely closed and there are so many supplies related to the offices, related to the hotels, related to the airline industry, related to the railway industry, which are still not recovered. So the channel sales effort that we have started to do and people's affinity to purchase a B2B product online has gone up only recently. So we believe that in times to come, this will slowly and slowly inch up. And as it will happen, you have seen that this current quarter also we have done almost like 7,000 net addition, whereas only 1,500 odd came from the came from the previous recovery, about 5,000 plus came from the and when when most of our sales people are working from home or working remotely. So we are able to open offices as the economy goes back on. I certainly believe that there should be a growth of similar growth like buyers in the supplier trend also, but let us wait for that. Thank you so much. You. Next question is from the line of Vabhav Agabhav Alpasanth Maheshwari. Please go ahead with your question. Sir, we are raising around 1,100 crores through q QIP. So this will result in a sharp drop in our ROEs. So by when do when can we expect the return on equity to get back to the normal levels? Like, what what are the like, it can get back to the current level exactly? In what time frame do we expect that? Yes. There will be a question. Right now, the board has approved the fund rate plan for the shareholder approval or they are recommended for the shareholder approval. Once we get to once we receive the shareholder approval, we look at as to at what time, what would be the opportune time in which we'll look at in doing the fundraise and completing the fundraise activity because the approval would be valid for a period of of one year from the date of the EGM or the date of the approval. So the ROI ROE and all those competition will also depend upon that particular time. But overall, if you look at it historically, we've been able to improve our margins and improve the profitability. So hopefully, if the similar trend continues and even if at a lesser pace than what we've shown in the last nine months, hopefully, we should be able to cover up for whatever the dilution that may happen as a result of this fund raise activity. And we're also deployed. And also is over a longer period, you know, as this fund raise or whatever the funds will be raised will gets deployed in the different businesses. I'm sure we would also generate returns and create value from this fund itself. So do we have a ROE target internally, like, in three years or two years? Where are we supposed to be? I don't think we have gone into that level of ROE targeting. What? I'm sorry. Could you repeat the question, please? No. I'm just asking you, do we have any internal targets with regard to the ROE? Like, in two to three years, what kind of ROE target we have? I think currently, the target is to create value, to create a stickiness for customer, to create a meaningful platform which can be monetized in longer duration, and how to make it easier to do business. I I'm not I won't be worried about the short term ROE percentage going up or down by a few percentage points. So I think we will continue to create value and look for long term. Next question is from the line of Deepen Mehta, Alexeyer Equities. Please go ahead with your question. Yes, sir. Congratulations on a very good set of numbers. From what I understand and what I've been observing, I think it's the vision of the company to be a end to end service provider for the SME, which means you may provide payment services, maybe accounting services, logistics. So if that in fact is the goal, then have we done some beta testing or have we done some experimentation as to how the whole process can be done? And any time frame by when we can offer all these adjacent services to to your large database, and then try and enable them on those various platforms and services as well, and then perhaps trying to get more revenue from them. Yeah. So if you see, all the effort has been going in that direction only. The current slide which is which may be visible to you, we started with the CRM tool that was completely built in house. And today that CRM tool is very effectively being used. We also formed a subsidiary called David India Monarch Com Private Limited, and that is working in facilitating payments, albeit slowly because b to b payments are generally done over over a multiple tranches by way of an FDR TGS traditional methods. But still, we are able to do some portion of that experiment on the on the platform. We have also invested into the order management system on the in in our subsidiary called Pura, where we are developing a manufacturing order management system. We have invested in the power where they are providing invoicing and accounting based software. The long we talked about that does the Belong we talked about that does the data distribution management and Salesforce automation. So I think slowly and slowly, we are trying to build the jigsaw puzzle. In the last quarter, you see we have added reviews and ratings onto our platform also. I think we are slowly and slowly building. There is no one one day where where all of it will start to happen. We'll continue to build pieces of these, and hopefully, of that will come together in times to come. Okay. So thank you and all the best with your endeavors. Thank you. Next question is from the line of Manansha. He is there with the question. Yes. Thanks for the opportunity again. Earlier, we had plans of having differential pricing across different geographies and across product category. Agree on that. Yeah. So we did implement it at the top tier of audible. We did implement differential pricing at the top tier of our service at the platinum level for industrial leadership project product. However, when we were planning to do it for the start supplier and leading supplier packages in the platinum, by that time, the pandemic has set in. And I don't think that is this is the right time for going forward with their differential pricing. We wanted to make the product far more affordable during this time. I think let us wait for six months. Let everything be stabilized, then we will start experimenting on those sites again because on one side, the entire workforce has started to work from home, and we needed a lot more training and rationale on that side to be trained because we have been selling a one size fit all product for a long period of time, and that is what our customers and sales have understood. Incidentally, only last quarter, we have also started to take out the export based by leads and we started offering it to exporters separately from one size fit all. So we are slowly and slowly working in the so export based by data, differentially priced, you can say so now. So we are we'll be working on more such products in times to come, but as of now, going slow little slow on that. I think as of now, we want to go with the acquisition side better because we feel that a lot of people have favored digitization during the last year. And probably the time is right for us to double down on the digitization of the SMEs at the bottom of the pyramid. Okay. And earlier, you used to guide for a net addition of around 5,000 subscribers per quarter. However, in the past two quarters, visible and also due to more affordable products available, we have been able to add seven to 8,000 net subscribers per quarter. So should we expect this run rate to continue going forward? And also if you could provide what was the gross subscriber that was added or rather what was the churn during the quarter? So providing the churn information would not be adequate at this point of time because as I said, we had gone through the moratorium of a lot of subscribers. Lot of subscribers had taken it completely off from the platform. So we are not able to calculate the exact churn numbers as of now. In terms of the net subscriber addition, last time when we had 7,000, I had told you that only 3,500 or so came with the new subscriber edition, whereas the 50% came from the recovery of the moratorium subscribers. Similarly, this time when we added 7,000 subscribers, again, about 15 to 20% came from the recovery of the moratorium subscribers and about 5,500 came as a new addition. So we believe, yes, new addition has gone up from 5,000 to 5,500. We believe next quarter, it should be anywhere between 5,000 to 6,000 for sure. Okay. And are we still offering any discounts for gaining back our old subscribers? Yes. The the if they would like to come back, they can come back still come back at 3,000 rupees inclusive of tax price. Okay. Thank you. Thank you. Next question is from the line of Sanjay Lanka from SEP Investment. Please go ahead with your question. Yes. Thank you so much, sir. And congratulation on a good set of numbers, sir. So my first question will be on since we are targeting the vision for two year, can you throw some guidance as to what growth we are planning? Can you share ballpark ranges to plus 25, 30 growth? Anything anything of that sort, sir? No, sir. I'm not allowed to do any Oh, okay. And, sir, my next question will be, could you throw could you throw some color on as to what changes take taken place in this year in terms of in terms of technology or in terms of business or in terms of planning, what we are what changes we have done? Yeah. I think there are a lot of items to share this year. All all, you know, 50% of the time, we have done this technological changes only and process related optimization and efficiency only. I suggest you please go through the new updated investor presentation, which is available on our website as well as on this topic, the website. You will see multiple new things. When I talked about the more deeper more deeper use of artificial intelligence and data analytics, whether it is in sales, whether it is in matchmaking, whether it is in language detection, whether it is in translation, whether it is in the, you know, bank product detection reserve keywords. We have also done a lot of progress on the CRM tool and conversational commerce and payment side. So today, all the debit transactions are available for free on our payment gateway if you are a paying customer. We have also seen significant adoption of the accountings of that going up in only on mobile on mobile as well as on the stock side. And we are continuing to build a cloud based product on that side. So multiple process related optimization, multiple cost related optimization, and multiple technology related breakthroughs have been achieved in this particular year. And we believe all of these together should price for a better adoption of our products and services in that regard. Sir, my last question will be on acquisition front. As we as we noted in the sir, is my voice audible or no? Yes. You are audible. Please bear with Sure. Sure. Sure. So my question will be on acquisition front as to, you know, previously before IPO came, we make a goodwill acquisition or goodwill write off in our books. So how we are making sure that this will not not happen in our books right now? Can you please throw some light on that? Yes. So to your question, the goodwill that we were referring to was pertaining to our to Lexo business that we started in 02/2014. And sometime around in 02/2017, we merged that with our business. Torrekso wasn't 100% subsidiary of us since day one. So if you look at from a consolidated financial standpoint, there is no goodwill write down because these expenses were in any part of consolidated will were part of that year p and f itself. It's only in the stand alone books wherein this business was showing up as an investment. When we merged this business, as part of that merger, we could build were generated and was subsequently written off before we decided to go public as a part of the cleanup exercise. So if you look at it, it was more of an accounting adjustment rather than any yeah. Accounting adjustment between the old com holding company and the subsidiary com the 100% owned subsidiary company rather than any particular business and look being the return of on account of any particular business. No financial. There it didn't have any financial implications as such on that year to PNL. And And that was most tax efficient way of doing it. Next question is from the line of Mrs. Ishpreet Karmotila Lauswal. Hi, sir. If you could just throw some light on your thought process on transaction based platform versus the subscription based platform. So we we pioneered the we pioneered the zero commission marketplace. And we believe that subscription brings stability to our revenue and gives a lot of visibility of and to the to the customers also. There could be some some areas where transaction based pricing could be applicable. So for example, payment is one area where there is a transaction based pricing is applicable. But our our intent is not to increase the cost of transaction by charging on every transaction a commission fee. We are not a commission agent, but rather we are a business enabler, and we would like to make it easier, cheaper to do business in India. And we will continue to offer more subscription based services and less transaction based revenue. Even if there these are going to be a transaction based, they are going to be within one or 2% transaction charges rather than going into 20% transaction charges. Is there any unit economics in mind for for a subscription based platform? Can you can you please repeat your question? We are getting a lot of Is there a unit economic based calculation or something for the preference for subscription based platform? Yes. If you look at into our standalone financials, there is a gross margin calculation which is there. It is available in the detailed financials. So any any of the quarterly financials, you can see, and there is a a notes to account. Within that, you will find the entire unit economics and how our gross margins have gone up over a period of time. So if you refer to that, you will come to know. And in case you have you need any more understanding, you can please get in touch with us, our investor relation team, and they'll they'll Just one last thing on my end. Since the deferred revenue for now is roughly flat and a lot of the revenue accounting happens from the deferred revenue, would the next year revenue growth be flat to a marginal kind of a growth because the deferred revenue is flat this year? Depends on, you know, I've been guiding this time and again. The our average age of our deferred revenue is about twenty months. Now if if we continue to do badly on collections for multiple quarter, obviously, the revenue, it will be visible on revenue. But as you can see, as I have guided you by the month of December, our elections were even higher than the previous year December. And we believe that we should be in a good we should be able to beat our last quarter numbers. I mean, so I think in case the collection remains subdued for a longer period of time, will But as of now, I won't be able to give you any guidance on revenue. Okay. Sure, sir. Thank you. Thank you. We will now take a couple of questions from the discussion panel. I'll read out the question for the management and audience. Can you please outline current business scenario for companies India Mart has invested in? That is a SaaS company. How this investing model will evolve and how we see these investment tying up with the customer base, at least the cross selling potential? So as I said, we we are we we would like to offer services of business enablement and marketing to our customer base. Some of it we are providing on our own. So you can see the preferred number service, the cloud telephony service. People order management system is being developed by one of our subsidiary. The payment services are done by one of our subsidiary. For certain use cases, we believe that there are other entrepreneurs who are better off solving those issues, And we are better to take a minority or a significant minority investment. And over the period of time, we would like to integrate them from our customer base and their customer base overlap method. So I think I've already explained the similar rationale in the of the other questions. Okay. Thank you, sir. And one last question. How has been the renewals in the shorter duration packages? Also, long term packages will also come up for the renewal first time post COVID. So what has been the renewal and churn there? Also, are we planning to focus on providing customer protection, you know, which is more of a capital intensive model? So, yes, as I said, the last year has been very transformative and very so many ups and downs for different kind of SMEs in different industries and different geography. So churn is going to be on a higher side. It continues to be on a higher side and will continue to be on a higher side until the economy settles down to a better for good. Currently, lot of people are people's businesses are being transformed into a completely new businesses. So as I told you in the first quarter earning call, many many more subscribers came in especially for face mask and safety products and hygiene products. And many of them could sustain and many of them could not sustain. Similarly, you rightly said that many of the longer term renewals will come to know. And as and when their renewals will come, we will come to know if they have migrated to a different business or their current business is survived and thriving. So that pain would be known in in in this particular year over a period of next nine months or so. Right. Thank you, sir. With this, we come to an end of the q session. And I now hand over the call to the management for their closing remarks. Over to you, sir. Thank you very much, ladies and gentlemen, for joining our earnings webinar. If you have any further questions, please feel free to reach out to our investors team either on e mail or on WhatsApp. Thank you, everyone. Stay safe and very Happy New Year to you all. Thank you, everyone. On behalf of India Mart, that concludes this webinar. Thank you.