Q2 20/21

Nov 10, 2020

Good afternoon, everybody, and welcome to IndiA Mart's quarter two FY 'twenty one earnings webinar. We are hosting this earnings conference through FLOOR, a platform by our associated company, 10times.com. This earnings webinar is also being shown live on Indiamart Facebook page and YouTube channel. We have already circulated our earnings presentation, which is available on our Investor Relations website at indiamart.com as well as on stock exchanges' websites. I'm sure you would have gone through the presentation, and I would be happy to take any questions afterwards. Last quarter had been much better than the June, mainly on two counts. First, online adoption has taken a step function jump as expected. Second, overall economic activity has also picked up post lockdown relaxations. As a result, we have also witnessed good growth in the buyer side traction on the platform ranging between 30% to 40% growth across various parameters measured for the buyers KPI. For example, the buyer traffic has grown by about 32% year on year, reflecting over 85,000,000 monthly visits every month, and business inquiries delivered has further increased by 42% year on year to 175,000,000. One of our important parameter is the repeat rate. Our ninety day repeat buyers have been increasing steadily over the last two, three years from around 50%, 51% then to 55% and now about 60%. This is reflecting the trust in the increasing value proposition of our platform and further strengthening the network effect of the platform. As we are aware that most of the businesses were impacted severely during the last quarter because of the lockdown and resulting into significant customer churn for India market. We had extended moratoriums to many of our paying customers during April, May, June. With a staggered economic recovery, many of our customers have started operations again, and this has resulted into a onetime increase of our net paying customers by approximately 8,000 during the quarter to 141,000 customers at the end of the quarter. We believe our continuous support to the customers has helped us in winning back many of them. Coming to the collections. Collections from the customer stood at INR 164 crore rupees for the quarter. Though we have significantly improved quarter on quarter, it is still a decline of about 7% on the year on year basis as compared to the quarter two of FY 'twenty. Many industries are still under impact and will probably take much longer to recover. As businesses recover and online adoption grows further, we are confident to play an important role in the ease of growing business and economic growth of the country. 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 quarter. Consolidated revenue from operations was INR 163 crore in the quarter, a growth of 4% year on year, which was largely driven by a similar increase in paying subscribers year over year. Consolidated EBITDA was rupees 82 crore, representing a margin of 50%. As we communicated in the last quarter call that these margins may not be sustainable as they are primarily driven by savings due to sustainable cost optimization as well as lower volume of business during the quarter. We expect half of these savings to sustain and half of these will come back as our business volumes recover to pre COVID levels. Net profit for the quarter was rupees 70 crores with margin of 39%, and cash flow from operations during the quarter was 78 crore. As of thirtieth September, cash and investments stood at INR $10.45 crores. Thank you very much. We are now ready to take any questions. Thank you, Prasvi. 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 also 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 may be able to advertise questions from all the participants. We will wait for a couple of second while the question queue assembles. First question is from Pranav Shatria. Please go ahead, Pranav. Hi, Pranav. Please go ahead with your question. Yeah. Hi. Thanks for the opportunity. My first question is regarding, you know, your employee count. If I look at the outsourced employee count has come back come down sharply to almost 1,000 from 1,400. And even your, you know, total employee count is also down by almost 300. So clearly, do you think that, you know, this can be a hindrance in achieving the, you know, strong collections growth considering you're seeing a very strong traction? And related to questions to that is also if I look at the employee cost on a on a per employee basis, that is down anywhere between 25% to 33% depending on which part of the employee I'm looking at. I mean, outsource employee cost is down 35% on a per employee per month basis, whereas, you know, for the India market employee itself, down around 25%. So in what we should come expect to come back? And the reason I'm asking this question is that the collections are broadly, I mean, you know, that 7% down year on year, and that's fairly there. So we were anticipating, you know, a reasonable increase in that, which is not what happened. So I would want to hear your thoughts on how should we see this going forward. Thank you, Pranav. See, last six, eight months, we haven't been able to hire any employees, and we have not been hiring, obviously, because 80% of our workforce used to work from Finland and used to meet the customers. As a makeshift arrangement, most of those field sales operation people were made to work like a any any sales agent in case of work from home. And it didn't make sense to increase the field sales operations until the operations are opened across the board where we can go to the customer. So one would you see that there are 10 times which ceased to be our subsidiary, so there is a reduction of that employee count, which is no longer part of our system. But you are right that there are about 300 people from the main employees and outsourced employees have come down. I would say that we should open wait for opening up of the offices. We were expecting it to open in the fifteenth of but then it is every month being delayed because it's still the it is dangerous out there. So given that we are we have started hiring on the tele side of the operation very recently, So we are ramping up work from home executive who are especially trained in the tele sales operation. We are also going to be experimenting now at least in the customer services division, client services division, where we will not be opening offices. But I think in case the customer wants them to come for service or upgrade call, some of our people will start to reach out to them post Diwali. So as of now, we don't see this as an impediment. I think as the economy recovers and as the, you know, vaccine, etcetera, comes, I think it will become business as usual in the next couple of months. What was the second part of the question? The Check the What was the second part of the question, Pranav? Sir, I also wanted to understand how the dynamics on the, you know, employee cost and for employee cost, we should be looking at because that is down for Outpost employee, it is down almost by 35 thirty three to thirty five percent versus pre COVID level. And for Indiamart employee, it is down 25. So that understanding was that the collections come back, you know, this cost will possibly revert back to the main. But that so what is the reason? Yeah. There are multiple items under the staff employee expenses. One is, obviously, the salary part, which from the August onwards has been fully restored. So the salaries have been restored during the middle of the quarter. The full effect of that would start to come back, you will see in this quarter. The second part is the, you know, incentive sales incentive. As we are still running at about 80 percent of pre COVID levels, so the sales incentives generally are applicable when there is a certain target is achieved in terms of renewal and there is certain target achieved over and above the average growth. So I think the sales incentive part is slowly and slowly going to come back as we inch closer to the pre COVID levels. Number three part is the overall headcount has gone down, which is which was the first part of your question, and has not been refilled. So over the time when it will be refilled, that will also come back. The second, there are the overhead costs related to employees. So there are when there are employee costs, there are canteen and kitchen costs, there are travel and tourism expenses, there are office related items. Some of them are classified as the employee expenses, and some of them are classified as the other expenses. So as we have said, the as soon as we open office, some of it will come back. As soon as we fill back the position, some of it will come back. And as soon as we hit the pre COVID levels, the incentives will also come back. I hope that would answer your question. Yeah. I think that is a very detailed answer. Thank you so much. My last question will be, can you give some color on collections for, you know, the last month, that is September or even October months, you know, just to understand what is the current run rate vis a vis where we were pre COVID? Collections on a on an average basis, I think they are running at around 80% of the pre COVID levels. So if you see from the last year performance, we are only down by seven percent. But if I because I consider pre COVID levels as January, February and March are generally an exceptional month, and March in the middle, we had this lockdown. So February is generally an exceptional month. So January levels, I think, we are still about 80% of the January levels. So that will give you the idea of the monthly collection. Okay. Thank you so much, Raj, from my side. Thank you, Pranav. Next question is from the line of. Please go ahead. Hi. Am I visible and audible? Hello? Hello? Great. So I have a couple of questions. One is the point that you made on buyer traction. We saw increased unique buyers, increased repeat rate. So just wanted to understand because of these increased this increased buyer traffic, it appears that your monetization has actually come down in the sense you are now delivering a lot more value for money than before to the to the suppliers listed on your portal. So any thoughts on how and and the road map for increasing monetization? That's question one. Question is with respect to how do we scale up paid suppliers? What is the road map that you see over the next three, four years? Because we saw that in the lockdown, we were able to get several paid suppliers in new categories like face masks, PPE equipment, and so on. So if you could just throw some light on how do you scale up paid suppliers and and, of course, also discuss about the competitive landscape just while also launching a product. Thank you. Yeah. So let us understand the two two kinds of platforms. One kind of platform where there is a buyer is monetized, you know, where transactional platform where buyer pays the money. And they are typically where as soon as the buyer increases, the monetization increases. However, we are more like a classified advertising platform. And the classified advertising platforms typically monetize the suppliers or the supply side of the track part. And they typically follow a lagging with a lagging indicator. So if you remember, when in 02/1617, also, the bio traffic has increased significantly, we had been able to increase the 1718 numbers for the supplier monetization in terms of number of suppliers who signed up and in terms of ARPU also slowly and slowly grown up. So I believe one, once we start to operate fully with the sales force, and I think the supplier monetization will only follow the buyer monetization because buyers are the key to our business and suppliers are the supply side. So that would happen over a period of time. I would say, in the past, our overall supplier growth has been anywhere paid supplier growth has been anywhere between 15% plusminus on a CAGR basis. We have been adding about 5,000 net customers every quarter. I believe our target should be to first get to 5,000 addition in the next quarter or two and then look at the growth based upon this increased buyer that has come. Obviously, there is a lot of adoption, online adoption has gone up, But at the same time, the entire industries and entire business models of many industries are going through lot of transformation. So many people are will be trying the platform over the next year or so, and many people will also be churning out. So I would say that next year or so, it should be faster supplier entry and faster supplier churn in order to find the right set of suppliers who will stay with us for a longer duration of the of the time. As you can see, most of our suppliers come into the monthly mode subscription, and then they slowly and slowly upgrade into an annual mode and gold and platinum subscription. So what happens is every time something like this event has happened, just like the demonetization in GEO and GST, the initial supplier traction goes up, and then it settles down at the consistent growth level of 15%, 20% in the years to come. So that is what I can tell you from my past experience, depending because a lot of industries are still going through a lot of churn. I can see that travel and tourism industry is still not yet hospitality industry. Most of the offices are not open. Offices do consume a lot of consumption in terms of transportation, in terms of food, in terms of cleaning supplies and everything. Similarly, handicraft and those industries are still have not recovered, decorative industries, marriage related industries. So I think as those industries will recover, so whatever we are able to do today, are doing with the 80% of the industries. We are not able to actually focus on all the 100% of the industries. So there is one constraint that we are operating from home. We are not able to meet the customer. We are not able to educate them properly as we were able to do earlier. And second, a lot of industries are still not back to normal. As I said in my opening remarks that some industries will take much longer to recover. So as both of them will come back, I would say paid suppliers growth should also come back. Right. Just one small follow-up. The behavior that you mentioned of the supply side that some will try your platform, some will churn, and and then you will discover how your paid supplier growth will return to, say, 5,000 per quarter as you've been seeing pre COVID. What about the buyer behavior? Because we saw that also surge in the last three months. Do you think that this buyer behavior is very, very sticky right now? Or will buyers also revert to the old way of certain online, certain offline working? Just trying to understand because this is a lead indicator as you rightly pointed out. Yeah. So buyer behavior, generally, what we are seeing that you can understand the I have here is this slide visible in network effect slide? Yes, sir. I can see it. Yeah. So if you see, our repeat buyers used to be about 50% around two years ago, and then it was settled at around 55% until the last quarters or so. And it has gone up to 60% at a much larger registered buyer base. So the repeat rate tells you whether the buyers are going to stick around or not. Yes. You are right. Maybe because of the lockdown, there was a spurt in the month of May or June. But if you see this particular quarter, it has not been the spurt driven traffic. So you can say that the quarter one traffic, there could have been some spurt specifically because of the law. No? But from the July, most of the industries had started to open. I don't think a significant or any any significant drop in the buyer behavior because the buyer behavior has changed permanently for good. Most of the people have learned for the first time how to use Internet, and they have found the goodies of the Internet. Also, can see our people who are acting like a supplier and buyer both on our platform, That also used to be 30%, and then slowly and slowly, it was up up to 33%, and now it has gone to 36%. So both of these metrics will tell you that these suppliers and these buyers are here to stay, and they are here to stay for a longer duration of time. Right. Understood. Thank you. All the best. Thank you. Next question is from the line of Anmol Ghaz, Motsilaloswal. Please go ahead. Yeah. Hi, sir. Can you hear me? Yes. We can. Yes. Yeah. So just a couple of call questions from my end. Are we first of all, are we considering to add any additional features to our platform, particularly in the logistics and lending side? And secondly, if you can talk a little bit on the capital structure capital allocation that do we have any pipeline of potential investments or m or m and a activities so that we can scale up more on the suppliers' paid operation? Thank you. So as you see, historically, we have been trying to move closer to the transaction as much as possible. So earlier, it was only a a catalog or a product catalog driven, and then we started to provide price on that. And then we started to add a a lead management system or a CRM system, which is being utilized by buyers and sellers to communicate with each other. And then we have added the payment options because most of as you know, B2B order sizes are much higher upwards of 50,000 rupees or so. So our payment is only being used for small payments item. Now coming to your questions about the logistics or credit, only when payments and lead management platform mature enough, then we will look at the providing of any kind of a credit facility. And we don't see that we will be doing logistics by ourselves ever because b to b is a very variety of the products, and most of the people have custom requirement with each other, and they talk to each other to arrive at what kind of product and what kind of design and what kind of quantities they deal with. It is not a five KG package which can be delivered for all separate industries. There are cranes and there are truckloads of cement and there are truckloads of agro. So I think this logistics is far more a distant item than the payment and than the CRM. Currently, our lot of focus is on CRM and maybe going forward on trade payment. We will see as the business mature and as the people get more comfortable with the buying and selling on the through the platform, we will continue to evolve more features which are used by buyers and suppliers. Now coming to your capital structure, Prateek, you want to take Yeah. Sure. So, Anwar, as we've been stating in the past, there is no change in the capital allocation policy. I mean, we have roughly around thousand crores of cash sitting with us as opposed to the deferred revenue drop of close to 620 crores on the balance sheet. The way we see it is that the one part of the capital cost we would be distributing it as in dividend, which will get decided at the year end by the board. The remaining part, some part some portion, we would like to keep it as a cash reserve for ourselves. And the other part, we would like to look at the inorganic initiatives, whether it is the investments, the newer subsidiaries, or in the mergers or the acquisitions aspect. So far, we have done two investments. One which we did, you know, two, three quarters ago. And the other one is Pizom or MobiC, which we did announce in the last quarter. So we have made, you know, some investments in that. Overall framework has always been that we'll have to look at the areas that make sense for us, which could be either b to b or it could be SaaS or it could be the fintech area. But it has to leverage the India market ecosystem. That is the better with which we'll continue to monitor and evaluate the upcoming opportunities. Wanted to clarify that. Is there anything in the pipeline right now? We cannot comment on it. We we continue to evaluate, yeah, multiple businesses, but there is nothing that I can tell you right now. Sure, sir. Thank you. Thank you, Anmur. Next question is from the line of Prashant Kotari, Big Tech. Please go ahead, Prashant. Prashant, can you hear us? Okay. We could move to the Move moving on to next participant. So next question is from the line of Ankit Gupta. Please go ahead, Ankit. Hello? Hi, sir. Am I audible? Yes. Yes. I'm Yes. I'm Please go ahead. Sir, two questions. Number one, our collections are around 60 crores. They have recovered quite nicely. Can you tell us that most of these new suppliers are monthly suppliers? Because, generally, what we are seeing is cash collection is almost equal to the revenues. There is no increase in debt revenues. So let us look at the cash collection. You know, cash collection, around 75% of the cash collection comes from our existing customers. We have, you know, we have one lakh 40,000 existing customers, and they keep renewing and they keep upgrading. So if you divide those one lakh 40,000 customers into twelve months, I mean, some of them are monthly and some of them are annual and some of them are more than two years, we get almost like 5,000 renewals coming up every month. So a large portion of the collection comes from the renewals and upgrades that happen at the time of renewal. The second part that you rightly said, there's acquisition of the new customer. In the month of April, May, June, July, the mix of new customer acquisition for monthly mode versus annual mode, actually, annual mode was around 40% as against the normal trend of about 20% only, twenty, twenty five Because at that point of time, based upon the payment option, the only payment option for many of the people possible was the annual option. However, as we scaled up in the month of October, September, October, it will go back to the similar principle of about 80% coming in the continue mode and 20% coming in the annual mode. And as and when they will upgrade, their collections will come. So this collection is a sum of parts of the new customer acquisition plus renewal plus upgrade into the existing customer. While the customer total number, total collection has declined on still at INR 60 crore, which is 20% lower than the pre COVID levels is one, neither our new customer acquisition has reached to the pre COVID levels and nor the people upgrading have reached to the pre COVID levels, where people are renewing, but people are still not upgrading for a longer period or upgrading to a platinum subscription. They are just in the wait and watch mode for the industries to open up. So I guess that as the markets open up, as I said, we see the economy opening up. And as industries will recover, the collections would also start to recover. Okay. And, sir, earlier in the q one call, we said that we are giving some discounts to the existing customers or at least deferring the payments. So is this the case now also or things are really been improving now? So let's let's separately, two questions separately. For the purpose of new acquisition as well as for the purpose of upgrades, we continue to offer creative payment plans so as to reduce the friction for people to sign up with our platform or for people to be able to test our platform or test our upgraded packages at a lower upfront cost. The second question is, are we still giving free extension to the people? So no. I think most of the extensions were given in the April, May, June and July. And from August onwards, we have started to ask for either renewal or turning out, though we are giving taking our normal time because in these four months, many of them were accumulated to be talked and to be so they are being done on a case to case basis. So we are only offering a relaxed payment terms, but no longer a discount on retention. Got it. Got it. And sir, just last question, if I may. Any guidance you can give for deferred revenues just to understand where are we seeing earlier, we were modeling a little bit decline in deferred revenues. But I think now after q two results, things are looking good, to be honest. You can can talk to our IR team, and they will help you with the modeling better because as, you know, collections flow into deferred revenue and deferred revenue flow into revenue. Right. So Okay. Okay. Okay. Thank you. Next question is from the line of Manan Shah, Manipi Investment Advisors. Please go ahead. Yes. Hi, am I audible? Yes. Yes, Manan, yes. Thanks for the opportunity. Sir, you mentioned in your opening remarks that the current increase in the paying subscriber is a one time increase. So is it that we have added the our lost subscribers back, or are there any new additional paying subscriber that we have added? So if you could clarify on that, or maybe provide a mix that how many were new subscribers that we added? So about 80% of them out of the 8,000 that we have become increased, about 80% of them are recovered from the previous one. And maybe about 2,000 of them are we added as a net new customers. But so I I already told you that. Okay. And currently, we are offering monthly plans in our silver package. So any plans of offering monthly or, say, quarterly in our other gold and platinum packages as well? The gold and platinum packages, we I think I told you last time also that earlier, we were only and only offering an annual plan and a multiyear plan. Last quarter, we had released a six monthly plan on the platinum packages, and that is doing well. So unlike entry cost of being full year in advance, now they can pay six months thing, and they can also pay that six months into maybe 50% advance and 50% next month kind of a thing. So we have offered a but I don't think we are planning any monthly or quarterly package as of now. In case we do anything, we'll let you know. Next question is from the line of Prahl Lin, Goldfish Capital. Yeah. Hi, Praveen. Please go ahead with your question. Yeah. Am I audible, sir? Yes. Yeah. Hi. Yeah. Hi. Sir, couple of questions from my end. One is that, again, coming back to your I mean, going back to your q one call, where you said our objective is to probably retain whatever the existing customer that we had at the March in some sense that is $147,000 as I can see on the slide, which is there. So any change in that kind of a guidance? Do you think that, again, the way things are improving, the way recovery is happening across the board, do you see that we can surpass that 147 number by the end of this year? Hopefully, yes, you know, know, our first and foremost target is to get to 5,000 at quarter addition because this whatever we had lost out of $147,000, most of it, either we have recovered in this quarter or maybe a little bit left here and there, and rest have churned because the people have churned on three counts. One, their own survival due to credit or due to general demand. The second is the their particular industries have gone out of favor, at least temporarily. So whether it is hospitality industry or whether it is handicraft apparel kind of industries. And third is they they have too much of biotraffic, and they don't need right now, like, in the amount kind of a support. So I guess from one forty seven to one thirty three to one forty one, we are more or less done with the biggest customer base. Whatever next quarter onwards, we will be able to do in this volatile environment is acquire new customer and churn whatever churn you had seen in the previous quarter was the monthly customer churn. Now, but there are two third more than two third of our customer base is annual customer who will come up for renewal as and when they will come up. So we can know their state of affair, how is their industry doing, how are they doing every month. So it is, you know, one part of the churn has been done away with the in the June and September. But I think next six months or next nine months are going to be volatile and to be able to predict anything. But given the indications that we have in the month of September, October, I'm saying that let us first target to get to 5,000 net debt for a reason, and then see where we where where we go. I got your point, sir. Second question is, sir, I remember again in the q one call, you had mentioned that some of the customers had moved to a digital mode of payment, if I'm not wrong, in terms of the collection. And related to that is also that, I mean, in general, in across industry, are seeing lot of digital adoption made be the use of credit card, may be the I mean, the way doctors are serviced in some of the pharma companies. So I was just wondering that can we not move to digital mode of also in terms of marketing or in terms of making the customer aware about the advantages of our platform and also in terms of collection. So are we running some sort of a pilot wherein rather than people going for collection, people going out to the custom sort of a site and educating him about the benefits of India Mart? Can that not happen digitally? So whatever this this quarter, $1.63 crores have come in, 95% of that has come in through digital mode only. It stick, sir? Would it stick? Would would it would is it I mean, is it one time, or can we assume a similar sort of a trend going ahead as well when things are normal? So if if you see the pre COVID levels, we used to do about fifty five, sixty percent digital collection, and rest 40% used to come when people go and meet customers. And currently, it is running like 85%, 95%. I would say that it will neither become 100%, because a lot of our customers, especially in the platinum and gold segment, they pay us it is not about the method of payment. Their deal sizes are INR 2 lakh, INR 3 lakh, 5 lakh. And you have to go and meet the management of the companies. You have to go and meet the CMOs of the companies and explain them the benefit of Internet and how the Internet Indiamart solution can work for you. And in those cases, you know, getting a phone phone based sale done would would be difficult. So I think on the high value transactions, it is not only advisable, it is, I think, completely do a field meetings, and it is not about collection. But on the lower hand side, for example, in the our monthly mode, 100% of the collection happens through through digital mode and tele mode only. And as I said in the last quarter, there is a greater adoption of the people and greater preference of the people now if they are to pay only 25,000 rupees or if they are to pay only 5,000 rupees a month, that they can pay based upon the brand value and based upon the telephone consultation. So 80% will definitely shift to the telephone and digital mode, but I would say the the large contracts and 20% of the customer would still need a face to face support and face to face sales and consulting. Got your point, sir. Last question from my end would be that I mean, we have talked about this features of logistics or credit, for example. Right? But are some of our customers asking some of the features that needs to be added? And do you think some of these features, it might not be logistic, it might not be credit? But some of these feature features are very important for us to retain customer, and there is a need from the customer's end that these features need to be added. Anything that sort of a thing that you are hearing from your customer base, especially after COVID times? Yeah. So I think the in these COVID times, people have realized the importance of their customer data and their prospective customer data. And we have seen a significant adoption in our uses of our CRM tools and usage of our buyer direct queue. So we are continuously working to make those features more useful and more easy to use by the buyers as well as suppliers. We are also deploying multiple technologies. So for example, now you can do almost like a real time chat. You can share your catalog with others. You can share your photos. We will also be able to there are some new innovations I have seen in the by these new new age Dukhan tech companies. They have also come up with some new innovations. We are also learning from them. So based upon whatever features, request or features we get to know from the survey of our customers, we are developing, and that is how our platform has been becoming stickier and stickier and becoming easier to use. Having said that, payment is one such platform where we continue to believe that there is an important part of the ecosystem. And maybe tomorrow, some kind of a logistics platform where people can find their logistics partner or people can find their, you know, software partners because a lot of people are now trying to find different kind of softwares to automate their businesses. So if you go on our seller.indiamart.com, you will find a specific section listing specific logistics providers, specific software providers that has also been launched. So I we could continue to work on those features, CRM related features and SaaS related features to make sure what our customers want and what we can provide at the minimum common denominator across various industries because we don't want to become an enterprise software company. And we have to serve the SMEs and micro and small and medium and large. So we have to operate at a minimum common denominator of a feature set, which is useful for them. Great, sir. Thanks a lot. That's it from my side. Thank you. Next question is from the line of Sanjay Ladha from Conceptive Invest Wealth. Please go ahead. Congratulations to the Indiama team for a good set of numbers in the tough environment, sir. Sir, my question to you is how we see the competition from the players like Google and Amazon. They they are making a various efforts to, you know, to eventually be into the market which we operate for. So what is our strategy and how we are looking them as a competition side or strategically related to that? The second question will be on in the past two two to three months, we are focusing on different cities on a, you know, different in a different way altogether. So are we seeing some of the, you know, inching of the advertisement cost as a percentage of revenue for two to 3%? Or what's your color on that side, sir? So I think the first part I have been explaining time and again. First of all, b two b and SME are a submission of many different business models for different different industries and for different different companies. We lie somewhere in the middle of a very unique platform, which has certain good deals of Google, certain good deals of Amazon, and certain good deals of a classified platform. And our strength is that 100% of our traffic is an organic traffic. Almost 60% of the buyers who come this particular month are also come in the last ninety months last ninety days. And many of our suppliers are also buyers. So there is a constant watch on what exactly we are doing and how they are doing. They are typically focusing mostly on the b to b wholesale, which is FMCG wholesale. So whether it is Iran, whether it is Amazon business or whether it is, you know, Pfizer, those kind of things. And then there are companies like Powertool SME or IndustryBind or MobiLeaks or Sugongo. They are specifically focusing on a particular vertical. The good part is that we are able to focus on horizontally on a particular yeah. Horizontally on a particular industry and a particular city. And if you see, most of the products that Amazon or likes of Amazon or not, they deal into standard product, official product, which can be dispatched and bought and sold. Whereas most of the products which are bought and sold on our discovered at India market are not standard products. They are custom products. They are custom designed because you want a bottle cover to be designed, a bottle label to be designed, a printing machine with the specifications to be done. So I think we are very different from that perspective. However, yes, everybody will innovate, and we will also learn from each others what areas to focus upon. The second part of your question, you said that we are doing differently certain city regions. I didn't really understand what exactly are you wanting to ask. So so on that side, we see on the on your twit Twitter handle that you are focusing on different cities and targeting different cities. So just wanted to understand how your or what what is the area or what is the strategy for the management on that side? Sir, we have started to experiment, you know, in the larger 35, 40 cities. We have our own presence. And our own presence means own physical presence. We have branches and all that. And then we have a telichere department which focuses on the rest of India. Sir, there are lot of there are three cities, a physical branch. So we are experimenting with the dealer distribution network for a DSA network. And I think we'll be able to give you some better outcomes of those or better numbers of those maybe next quarter as we experiment because these we have only done in the last couple of weeks only. So we'll we'll let you know in the next quarter, maybe. Sir, if I ask you one more question, we are focusing on export side. You mentioned that under previous control or you mentioned in the somewhere. So how things are creeping on that side? Export has not been doing great for the country for the last decade or so. You know, you if you know the history of India March for the first fourteen years, we were a 100% export import marketplace. It is only in 02/2010, then we saw that now domestic marketplace is going to be more important and export is not going to grow, and that turned out to be true. Since now that in the wake of supply chain diversification, that many people are looking at India as a supply chain diversification item. And our Prime Minister has also put a lot of focus on Latin America and the digital export mix in India. So we have relaunched our export services, They have been launched only in the month of September, and we have got some few 100 customers. But I think it will take about six months for me to be able to give you anything concrete in terms of number, if they are sustainable or if they are good enough contribution to our overall revenue and overall customer base. Thank you so much, sir. All the best. Thank you. Thank you. Thank you. Next question is from the line of Aditya Badami. Please go ahead. Good afternoon. Congrats on the great numbers. I just wanted to know, recently, one of your competitors has come out in a big way of launching their b to b business line. What are your views on it? And how do you look at costs going ahead? Because they are looking at heavy marketing costs from the month of December onwards. What do you have to say about that? Yeah. Thank you. I think we have also heard and seen that presentation that they have made uploaded on their website. So once I would say that this will definitely help in expanding the market, educate and training of education and training of the SMEs is very important aspect. JD historically has been a great company on the telephone based directory system. The the second part is that b two b marketplaces experience a strong network effect. As you can see on this slide, the there are more buyers and then more sellers and then more sellers display their more products and more specification. And we also start to gather a lot of seller data insights, which help us do a better matchmaking and save time for buyers and sellers. So I would say that this is not a like a one quarter or two quarter game. It it takes a decade to build a strong successful B2B organization. And at the end of the day, buyer sales sellers will use the platform where their ROI or the value proposition is the best, and they will allocate. Coming to your advertising cost side, I think we as our traffic has grown up by 30% this quarter, and it has been growing better in the last three, four, five years, We don't see any need of immediate advertising. In any case, we do not see advertising as a means to acquire traffic or to acquire customers. Help us build a brand recall and the overall trust into the platform, and which we did many years back. And if we need to do that again, we will do that. Our advertising budget continues to remain at twenty five, thirty crore rupees per year. So I don't think that would be a bigger challenge. But let them come out, and we'll we'll know what kind of services they offer and how can we best address or learn from their experiences also. And one thing is sure that it will definitely expand the market. Okay. Great. Thank you so much. Thank you. We will now take couple of questions from the written questions submitted by the participants. I'll read out the question. So the question is from Manik Panija. We have seen our EBITDA margins improve to 50% levels versus 27, 28% margins in FY '20. Some of the cost savings you have suggested are not sustainable and will come back as business recovers. But given that we expect growth to recover, edit the overall recovery and increase digital adoption, so what are the sustainable margins for us over the medium term? Sure. So as I mentioned in my opening comment, certainly, 50% EBITDA margins are not sustainable. If you look at our pre COVID quarter costs, the cost had been at around 120 odd crores. In this quarter, we are cost the total cost base had been around 82 odd crores. So there is a significant reduction in this quarter cost as compared to be what used to be a normalized cost. In the last six months, we have worked on certain cost optimization measures, you know, as well as there has been certain savings, you know, which have been explained by Dinesh also in one of the questions because of which we're seeing an $80.82 crores kind of in cost base. Going forward, we believe that these costs will certainly increase. Half of these will sustain and half of these will not sustain. So would be more like the $100,105 crores a quarter is a more normalized cost base that we should think about it till the time we start again ramping up hiring again. In the terms of the revenues, revenues have been coming out of the deferred revenue, so they are much more stable as compared to the collections. While the customer collections can see a bit of the volatility, we expect our revenues to stay stable for the next quarter. So basis this, I'm sure you can work out as to what would be the appropriate margins for next quarter. Thank you. One last question. Could you please explain us this distinction between the daily unique business inquiries and both the business inquiries delivered? So daily unique business inquiries is the sum of daily item daily buyers who have actually sent an inquiry, most of these buyers will end up sending an inquiry to multiple suppliers, and some of them will also end up submitting an RFQ, which will be consumed by the suppliers. So the inquiries delivered are the total number of inquiries received by the suppliers, calls and inquiries received by the supplier. And unique business buyers are the inquiries sent by the buyers. Okay. Thank you. I think this week come to an end of the q and a session, and I now hand over the call to the management for their closing remarks. Thank you very much, ladies and gentlemen, for joining our quarter two financial twenty twenty one earnings webinar. In case you have any further questions, please do reach out to our Investor Relations team, and we'll be more than happy to answer your question. Everyone, and stay safe during this environment. And have a happy Diwali to all of you.