Aurum PropTech Limited (AURUM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Aurum PropTech Limited Q1 FY 2024 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Vanessa Fernandes, Investor Relations, Aurum PropTech. Thank you, and over to you, ma'am.

Thank you, Dorvin. Good evening, everyone, and a warm welcome to the Q1 FY 2024 Earnings Conference Call of Aurum PropTech Limited. Joining us on the call today, we have Mr. Ashish Deora, the Founder and CEO of Aurum Ventures; Mr. Onkar Shetye, Executive Director, Aurum PropTech; Mr. Kunal Karan, CFO, Aurum PropTech; Mr. Hiren Ladva, EVP, Investments, Aurum PropTech; and Mr. Jitendra Jagadev, Founder and CEO of NestAway. Today, we shall go through our performance for the quarter gone by, our future outlook and a special segment on NestAway Technologies, the latest acquisition in our portfolio. Before we dive into the details, I would like to remind everyone that the forward-looking statements we may discuss are subject to risks and uncertainties that are detailed in our prospectus and the annual report. We encourage you to review these documents, which are available on our website to fully understand the risks associated with any future projections or statements. We shall now start the call with Mr. Ashish Deora, our Founder and CEO.

Thank you, Vanessa. Good evening, everyone. The first quarterly earnings call under Aurum management was hosted in July 2021. It is 2 years today as I participate in this 9th quarterly call of Aurum PropTech. Over the past 2 years, we had been committed to bringing technology to real estate sector, giving rise to what is now widely recognized as the proptech ecosystem. Our team's unwavering belief and focused execution has led us to exponential and consistent growth. At Aurum, we have always emphasized EBITDA as a key metric, ensuring that our growth is accompanied by profitability. We maintain a constant focus on unit economics. And as a result, we are EBITDA-positive for the third straight quarter. With a sharp focus on execution and unit economics, our teams are driving each product and each business towards hyper revenue growth. We are proud to announce that HelloWorld, our co-living business, has touched an ARR of INR 100 crores as compared to INR 38 crores 1 year ago. Further, we are also seeing great traction with Aurum Analytica. I would now like to speak about the special and significant milestone during this quarter. We have acquired NestAway, one of the largest proptech brands in India. Our growth journey began in July 2021. And since then, we have acquired 7 businesses in the past 24 months. Each acquisition has been strategically aligned with our goal of addressing the unmet needs of technology, capital and services within the real estate value chain. We believe that we now have all the essential products in our ecosystem to benefit consumers, developers and intermediaries. I would now like to share how we have already commenced NestAway's restructuring journey. In the past 2 weeks, our team, led by Jitendra and Ismail, have initiated the process of cultural transformation with an emphasis on unit economics and customer obsession. We have optimized operations by downsizing our presence from 14 cities to 6 cities. Consequently, we have streamlined the team, reducing its size from 350 to 195 and reducing the monthly salary expenses from INR 2.7 crores to INR 1.3 crores. We aim to transition NestAway to become a lean and flat organization similar to our other Aurum businesses. These steps have been taken with the objective of being profitable at NestAway by the year-end. As soon as we are profitable, we will take NestAway to hyper growth in 2024 and 2025. Later on in this call, Jitendra will provide further insights into the rental management business and NestAway's goal. I would like to state that integration of tech capital services and data enhanced by our entrepreneurial and strategic mindset is strengthening the Aurum PropTech ecosystem with each passing month. To conclude, I would like to share some of our internal targets for the fourth quarter, that is January, February and March 2024. First, we will achieve INR 100 crores of quarterly revenue, which will make Aurum PropTech a INR 400 crore run rate company, I repeat, a INR 400 crore run rate company. Second, we will restructure and make NestAway profitable. Third, needless to mention that we will be EBITDA positive. Thank you, everybody. Over to you, Onkar.

Thank you, Mr. Deora. Good afternoon all. The Aurum PropTech ecosystem is structured under technology, primarily encompassing enterprise tech, services, encompassing consumer debt and capital focusing on fintech applications for real estate, mapped across the real estate value chain of development, monetization and consumption. I would like to inform you that Aurum PropTech's integrated ecosystem now collectively boosts of 13-plus products and services, 80,000 home buyers, INR 2,000 crores plus GTV, 520 SaaS customers, 4,400 RaaS customers, 7,500 channel partners, 600-plus real estate developer relationships and a presence in 17 cities across the globe. During Q1 FY '24, Aurum's business focused on improving unit economics through cost optimization and efficiency drives. Some of the key highlights include: HelloWorld grew to an ARR of INR 83.3 crores with 11,195 live beds and 29 new properties it onboarded in Q1 2023. There was a 19% growth in quarter-on-quarter revenue numbers, while the occupancy stood at 74%. BeyondWalls stood at an INR 49.93 crores revenue. sell.do became the fourth top-ranked real estate CRM globally, and seventh ranked in the easiest-to-use category. Aurum Analytica serviced 115 projects and achieved an ARR of INR 24 crores per annum. Through its analytics platform, it identified 33,756 prospective residential buyers across the country. Integrow Asset Management successfully exited an opportunity with 30% IRR. We also went on to add 3 new products in our portfolio, Aurum WiseX, Yield WiseX and the OfficeMonk. Aurum WiseX is a digital distribution vertical for real estate investments, which leverages technology to offer risk-adjusted institutional grade investment products. Yield WiseX is a new reality investment platform that aims to democratize ownership of commercial real estate, structured debt opportunities. It is a transparent, reliable and technology driven approach, offering its investors end-to-end hassle-free investment management platform that provides expertise and convenience. Aurum WiseX generated a INR 70 lakh revenue this quarter with a GTV of INR 13 crores and engaged 75 investors on its platform. The investor reach has now widened to 50,000 identified investor data set. The platform clocks 7,000-plus website sessions per month. The OfficeMonk is a B2B SaaS product to digitize commercial real estate portfolio and enhance the experience of tenants offering 3 core modules both a solution for landlords and operators to track their lease vacancies, manage their property accounting and streamline tenant communication. Ops, a mobile solution for operations teams to streamline visitor management and digitize maintenance activities, and Circle an app for employees working in office buildings to better manage their relationship with office and people they share it well. Our target market is co-working spaces, offices and tech parks. For our new products, Aurum InstaHome and Aurum KuberX, we focused on getting the model right on low ops and high on scale, getting the tech right features for all stakeholders, and getting the experience right, improving turnaround times. Before I hand over to Mr. Jitendra Jagadev, founder of NestAway, I will briefly take you through the financial results of quarter 1 FY '24. Our revenue from operations for quarter has increased year-on-year by 202% to INR 44.16 crore as compared to INR 14.64 crores in the corresponding quarter of the previous year. The total income of the quarter was INR 47.71 crores as compared to INR 15.72 crores in the previous quarter, up by 203%. EBITDA for the quarter was INR 1.8 crores, 3.8% of the total income as compared to a negative EBITDA of INR 5.69 crores in the previous year. Loss for the quarter was INR 16.12 crores as compared to an INR 8.73 crores in the previous year. Our SaaS and RaaS revenue for the quarter were INR 5.72 crores and INR 38.44 crores, respectively, as compared to INR 5.11 crores and INR 9.53 crores, respectively, in the corresponding quarter of previous year. We will continue to work on increasing efficiency and enhancing consumer experience in our proptech businesses. With this, I will request Mr. Jitendra to take us through the NestAway plan.

Thank you, Onkar. Good evening, everyone. The rental market in India is a significant and lucrative sector with approximately INR 2.2 crores renters in the top 20 cities. The rent expenses typically account for around 30% of a renter's wallet share making it a substantial portion of their expenditure. At NestAway, we recognize the immense potential of this consumer market. In the next 2 quarters, our focus is on implementing initiatives to reduce costs and drive profitability. We are well positioned to capitalize on the tailwind effect as rental rates have experienced a substantial 25% jump across major cities due to factors such as increased interest rates and the surge in demand post the work-from-home era. Additionally, buying a home has become more challenging for the younger generation due to lifestyle preferences, saving habits, diminishing emotional attachment to properties and rising housing inflation. This trend indicates that our target market share will increase along with the size of the market itself. Our immediate priority is to stabilize the business and achieve profitability within the next 2 quarters. To achieve this, we are focused on improving operational efficiency across all aspects of our operations. We aim to simplify our customer offerings, ensure scalability and sustainability. Our team is committed to high performance output while adhering to our company values. One of our key initiatives involves optimizing salary structures as there is a significant gap between revenue and employee headcounts and their associated salaries across different geographies and verticals within central cost centers. Another area of focus is reducing direct costs, particularly the operational expenses related to property management and maintenance services. We believe that by transforming these services from cost centers to profit centers through simplified offerings, we can enhance overall profitability. Additionally, we aim to improve efficiency in performance marketing by leveraging low customer acquisition costs, cash channels and discontinuing high-cash channels. Optimizing our technology stack is also crucial to eliminate inflated technology infrastructure costs resulting from scale data or traffic. To achieve profitability, we must implement measures such as reducing unnecessary expenses, streamlining processes, automating tasks and renegotiating contracts more effectively with our vendors. As part of our cost optimizing strategy, we have decided to seize operations in Visakhapatnam, Kolkata, Ahmedabad, Kota, Jaipur, Mysore, Coimbatore and Indore. By aligning our focus and implementing these initiatives, we are confident in our ability to make the rental market in India more profitable for NestAway soon. With this, I will now pass on the call to Dorvin to open the floor for the Q&A session. Thank you.

[Operator Instructions] The first question is from the line of Faisal Hawa from H.G. Hawa & Company.

Sir, congratulations on a good set of numbers. Can you just refer to Page 18 of your slide where it says that HelloWorld is now a revenue of around INR 21 crores, but then there is a note saying that these businesses were not consolidated under Aurum PropTech. So does this mean that this has not been included in the revenue of Aurum PropTech?

This is Hiren here. Let me just take that question, and thank you, Faisal, for your query and interest in our company. Regarding to your question, if I refer to that chart, the Y-o-Y percentage is where we are referring to the consolidation part, right? Just to clarify, HelloWorld, we started consolidating from 15th of June of 2022, right? So if I were to compare Q1 of last year versus Q1 of this year is where we are trying to clarify that the Y-o-Y comparison is only at the consolidated level, right?

So this year, it has been consolidated?

Yes, yes. This quarter, in fact, 15th June last year itself onwards, we have been consolidating HelloWorld.

And then again, you say in the second this thing, not applicable because the composition of the portfolio varies across the 2 quarters. So what is the variation? This is as regards of Aurum Analytica.

Yes. So last year, as you recall, almost every quarter, we had one or the other acquisition getting consolidated into our books. And hence, when we do Y-o-Y comparisons, at the consolidated level, we are comparing the Aurum PropTech's reported numbers, which may not include, let's say, Aurum Analytica in Q1 last year because it was not consolidated, right? But when I do like-to-like business comparison of Aurum Analytica in this particular slide, let's say, INR 6 crores, which has gone to 4 -- 5.22x and 422%, that means compared to INR 6 crores of revenue in this quarter versus last year's quarter, irrespective of whether it was part of Aurum or not, the growth has been 422% on the like-to-like business, right, without consolidation. Idea is to give you a sense of how the intrinsic business itself has grown on a quarter-to-quarter basis.

Got it. And sir, what is our fixed cost across all the companies? And can you give a percentage of what would be our B2C business where there are actually consumers who come to the net and use our services?

So the fixed cost -- hello, this is Kunal. I'll take this question. The fixed cost for the quarter will be around INR 5.5 crores.

Across all the companies?

Yes.

But this would definitely not include NestAway then?

No, no, no, NestAway has not come into the results right now. So see our results -- in the segment results, we have given that corporate cost. So that number is INR 5.5 crores.

So that is our fixed cost every month or every quarter?

Quarter, yes.

Did you say every month or every quarter?

Every quarter.

Okay. And sir, what would be the improvement that we -- that NestAway could give our revenues in Q2?

Sir, you have given the number.

So as of now -- this is Hiren, again. For Q2, again, we'll come back with our forecast and the overall number, not just for Q2, but the entire year assets. NestAway specifically, if I can, without giving you the exact numbers, before acquisition itself was doing an average run rate of around INR 2.5 crores to INR 3 crores on a monthly basis, right? And based on that, we can do a projection. However, at the moment, as Jitendra has already called out, so has Mr. Deora called out, our focus for the next 6 months at least would be on to kind of focus on the unit economics of the business. And then we'll take up the growth focus from 2024 onwards.

And sir, we are on record saying that we will now be developing some proprietary products also of our own. So what is the progress on that? And any initial revenues coming from that? That's one. And secondly, you were also going to do something with the fractional ownership? And is there some kind of clarity there from SEBI or any other authority, which looks into this?

Mr. Hawa, this is Onkar here. I'll take these 2 questions and also add to the earlier question. As you rightly pointed out, what is the composition of our business with respect to B2C and B2B. We have 40% of our business coming in from B2C as of now. With the addition of NestAway, we expect this to go to a 60% to 70% in terms of revenue coming in from B2C businesses. We see large opportunities in the B2C space, and that is where we also are looking to pivot [indiscernible]. With respect to proprietary products, there are 2 products that we are engaged with presently, Aurum InstaHome and Aurum KuberX. Aurum InstaHome is focused on the largest opportunity area in the real estate space, which is secondary real estate. It works on a platform strategy of generating supply for the secondary real estate market, onboarding enough partners to facilitate the fulfillment of this secondary supply, and then finding enough buyers to make sure that we have a matchmaking happening between supply, demand and fulfillment. We have the automated valuation model launched for Aurum InstaHome. The automated valuation model triangulates data from 3 sources, registry data, market listings and local intelligence. And it goes on to predict an estimate for an apartment that the seller is wanting to sell. If he is aligned to the value of the apartment, he will further go on to give a mandate. That mandate will further be sent out to the channel partners who are subscribed to our partner app and who will go on to sort of help us sell these apartments. The AVM is live in 225 locations and the partner app has been launched in June. We have received 150-plus downloads and 66 active channel partners who are working on this presently. In addition to this, we also have Aurum KuberX, which is a loan origination software that is targeted on loan recommendation for home finance seekers and also further going on to fulfill this home loans for the loan finance seekers. We have -- between both the products, we have a revenue of INR 30 lakhs recorded in the first quarter of this year. These products are rolled out very recently in the market, and we will further go on to optimize its unit economics and then work on scales in a very Ops-like model. Coming on to your other question on the fractional ownership space. The fractional ownership space has gotten some clarity from SEBI. They have come in with a few papers and recommendations. Our strategy on the fractional ownership space was looking at how do we approach this? Do we approach this from a real estate point of view? Do we fractionalize real estate? Or we look at it from a fractionalization of financial instruments that are backed by underlying real estate? We have chosen the financial instruments [indiscernible]. And here are 2 cornerstones of the fraction ownership strategy are between the Integrow AMC, Integrow Asset Management Company, and Aurum WiseX where we will have fractional instruments created at Integrow AMC backed by real estate in the corporate real estate space and also in the residential real estate space. And Aurum WiseX will pivot to a tech-driven distribution network of high-value retail investors looking on to invest into this space. Hiren, would you like to add anything to the fractional space.

Thanks, Onkar. Just to elaborate on the regulation on fractional, yes, SEBI has, at the moment, only released a consultation paper which has enabled a very healthy weight in terms of what should be the approach towards fractional ownership in India. We are awaiting the final regulation to come in. Aryaman, who heads the business from our end, along with Mr. Ram Yadav from Integrow, both have contributed to our -- inputs from our side in terms of how we see or what request from our side in terms of what should be considered in the regulation. So we'll await till SEBI comes back with final regulation with respect to this matter. As Onkar mentioned, there are other opportunities in the capital play as we call it, within proptech, which Integrow and WiseX are pursuing at the moment. The opportunity is quite wide. And under WiseX, as Onkar mentioned, we have -- we are actually leveraging the tech platform that we have built for investor's outreach and distribution of such products. So they are actively distributing those products. On the other side, Integrow, along with its AIF and a few other developments that they are working in terms of building more products in this domain, they should be launched in the quarter 2 of this financial year.

[Operator Instructions] The next question is from the line of Darshil Jhaveri from Crown Capital.

So sir, we've had an ambitious target of getting to nearly INR 100 crore revenue by quarter 4. So I had 2 questions regarding that. Like what part will drive it the most? And what kind of profitability do we expect maybe not -- if not this year, maybe next year, would we be breaking even on our -- not on EBITDA level, but on PAT level? So those are my 2 of my questions.

This is Ashish here. So INR 100 crores is a bold ambitious target that we have set up for ourselves in next 3 quarters. I go back to quarter 1 of last year when our revenue was INR 14-odd crores, and we had set up a target of INR 50 crores for ourselves. And now with a revenue of around INR 50 crores, we have set up a target of INR 100 crores with the same confidence that we had delivered the earlier numbers. We believe that most of the businesses are in the process of delivering exceptional numbers. Most of the businesses, most of the products are looking at delivering 2x of their current numbers. As you know, there are always -- in business there can be some that goes a little bit up and down but we are expecting an all-round growth when we project INR 100 crore number. We have some details around that, which we will share with you in the coming quarters. As far as the profitability question of yours, our focus initially was to kind of have unit economics positive at all companies, at all products. We are slowly, but surely achieving that. And obviously, the next target after that is going to be become profitable and become -- at the gross profit level as well. So at this stage, with this INR 100 crore of the projection, it will be difficult for us to share anything more than that at this stage. Two of the 7 businesses I have been told now is also -- is even now PBT-positive. So while most of the businesses are positive at the EBITDA level, but 2 of our 7 businesses is PBT-positive even. So look, I think for last 8 or 9 quarters, we have been saying this that we want to be very sure about unit economics and be positive and profitable in all businesses. And we have demonstrated that, and we will continue to demonstrate that.

Okay. Sir, okay, that helps a lot. Sir, out of our 7 business, you said 2 are PBT-positive. So other businesses I, again, like don't want any range to something maybe because it's a very new space. What kind of a rough range do you think will they take like maybe based on your experience like they might take a year or maybe more? Like how we are seeing growth in different avenues just like a rough number that could help us, like not in terms of any specific revenue or profit target, just like how much time would they take to maybe to get to profitability? Nothing specific.

Well, our internal target is that all the businesses in next 6 quarters should be profitable. But again, sometimes you start putting a little bit of growth lever. And the moment you put growth then you might have the EBITDA-positive, and you might still defer the profitability by another quarter. We are very closely -- with every month, we very closely look at all the 10, 11 products and companies that we look at. And at times, we make a decision that, okay, this is something that is ready to grow for next 3 months because the -- because all the financial parameters are under complete control and some should be -- yet the growth should be slowed down. So that, to my mind, is a regular exercise, a monthly exercise that we do. But to give you a very ballpark, I think 6 quarters should be -- is our internal target and should be a fair target.

Okay. And one more last question. I just wanted to I understand a bit more about how would our -- how would our depreciation maybe flow over the coming years right now? Because it has been steadily increasing quarter-on-quarter. So maybe like it's going to keep on increasing because you've been acquiring businesses? Or how would that just grow? That's my last question.

So this is Kunal, I will take that question. Look, the decision mostly comes from one -- 90% of the decision comes from one entity that is HelloWorld Technologies. So that company as a business model, they have to onboard premises in long-term basis. That is where the depreciation cost comes in. And as in when we grow, the depreciation will -- and we onboard more properties to build our revenue, increase the number of beds so the depreciation will definitely go up. But for the existing assets that we hold right now, so they are mostly new and into the next 2.5 years, so if we take a 5 years period for each of these properties on an average, so maybe 2.5 years where the depreciation will go up and then come down.

[Operator Instructions] We have the next question from the line of Rahul Jain from Dolat Capital.

Yes, [indiscernible]. Firstly, congratulations on this transaction on [indiscernible]...

Sir, sorry to interrupt, but the line for you is not very clear. We request you to please use the handset while you're speaking.

Hello? Is it any better?

Yes, this is much better. Sir, please go ahead.

Yes. Sorry for that. So I was -- my question was regarding the NestAway business. We have shared some plan in terms of how we plan to bring down cost and all. But just to understand, since we have aspiration to grow this business in FY '25, how you see this shaping up? And do you see this is a much larger piece of the business, which can be scaled versus some of the other transactions that we have done in the past? So how you align this reduction in cost and eventual growth given the opportunity size is much larger in this space?

Rahul, this is Ashish here. NestAway definitely has one of the largest potential of all the businesses that we own and all the products that we run. We believe that it is set up at a very interesting juncture, where, first, we are reducing the operations -- streamlining the operations, changing the culture of the organization. And then once we are confident that we have the unit economics in place, we are going to grow, put it back in a hyper-growth mode, which the company has the capacity to get back to. For some specific details, I think, Jitu, NestAway, would you want to add a few things to the question of Mr. Rahul?

Yes, Mr. Rahul, Jitendra here. So actually, at NestAway, as I mentioned, in there in the call like I was telling like with some of the largest part of the business actually in terms of the wallet share of every person that deploys this money. Most of the money, 30% of this wallet share goes into rent. And we have almost 2.2 crores people who actually pay rent every month in this Indian market. So the potential wise, it's a huge opportunity for us. How we are trying to set it in the next term is like first 2 quarters, we are trying to build a minimalistic body where we are telling that it's profitable. We are breaking even and becoming profitable. And then focusing on optimal growth channels to make the business grow at a very significant pace, but not doing end of loss, like the loss is less, but it will be growing at a very significant pace because the opportunity is very high. So that is the plan for us like now the immediate 2 quarters is typically focusing only on profitability. But later on, it's a big scale game. So we are focusing on the scale post that.

Yes. Just 1 question. What is the current revenue and profit run rate that we expect in this business? And where it should reach by the time all these business corrections are done with?

Jitu, would you like to answer that?

Yes. So at this point, so during our acquisition process, what we have called [indiscernible] at this point, it is around INR 30 crores is the ARR, like INR 2.5 crores is the monthly revenue that we are seeing in the business because this is like the pure revenue that comes to them, like it is post taxes. So INR 2.5 crores is per month and INR 30 crores is annual revenue. So the losses we are trying to make it like 0, but at this point, it is around INR 2.5 crores. We're at minus INR 100 crores EBITDA, but it should be by this -- end of this 2 quarters, it should be 0. So that is the plan at this point. In the future, we have done some good plans. I think over the next few quarters, we'll share the grade, like the next 3 years, how we are planning to grow NestAway after that.

Right.

In addition to what Mr. Jitu said -- Jitendra said, your earlier question, we have of belief that there's a larger opportunity at Aurum PropTech that lies in with NestAway, when NestAway goes on to address the rental real estate problem or the opportunity in India, it provides us a good opportunity to address the secondary real estate of the resale market. NestAway will be able to give us intelligence on apartments or units, which are monetizable in form of rental yields in various locations across the country. And that sort of gives us good intelligence on supply available for resale and then match an appropriate demand for those apartments.

Right. Just 1 clarification on what Jitendra said. What I heard is INR 2.5 crores is the revenue monthly run rate? And I missed the loss number. I think somewhere you said INR 100 crores EBITDA loss run rate at this point. Was that the right number?

No. So it is -- it was like before acquisition it was INR 2.5 crores EBITDA loss per month. So it's 100% EBITDA is what we are talking about on the revenue side.

Okay. Okay. Understood. And this, you said, should become 0 by end of next quarter of the current quarter where we are?

Next 2 quarters, we're looking after -- yes. Yes.

Right. Okay. And next question was related to this SaaS business. I mean, given that you have -- we have a very large growing opportunity, some of this part of the business has not been scaling up for us. So what precisely you think how one should see about this business in terms of both potential as well as profitability?

Rahul, Hiren here. Let me take that up. So in SaaS business, we predominantly have 2 products. And both of them have grown quite well within the India market. Our next plan is to take these products outside India, which -- the action for which it has already happened, wherein GCC has been our first quote of calls in terms of the next growth frontier for both these companies. And we are taking these companies jointly in a combined and an efficient manner, right? So that's the immediate growth trajectory. So both of these products have a strong potential in the entire GCC market, we've spent a couple of quarters to assess the market, the potential, the need and where -- or what should be the sweet spots that we should focus on there. So that's the immediate growth potential that we are seeing.

And last bit on the outlook that we shared is achieving INR 100 crore kind of a quarterly run rate versus INR 44-odd crores we have right now. So are this baking in some more fresh transaction that could happen in the next 6 months? Or this is based on whatever we have in our hold right now?

So as Mr. Deora mentioned, one, we have some internal workings around this, but yes, we'll come back to you in a quarter or so on that. But at the moment, no specific number is allotted to any additional or a new venture coming into the ecosystem. I think we believe with our existing portfolio, which we are set to achieve the INR 100 crore mark on a quarterly basis by Q4.

[Operator Instructions] The next question is from the line of Gaurav Somani from Korman Capital.

I'm new to this company, so please pardon me if my questions are little basic. I wanted to know, from a 2-year horizon or something because we have a list of businesses, the top 2, 3 businesses, which probably will contribute say 60%, 70% of our revenue. If you can walk us through what is the revenue model or the revenue recognition model and return metrics for each of these businesses would be quite helpful to understand the business.

This is Hiren, here again, Gaurav. So much for the interest in our businesses. I think if I go on explaining the entire business model, it will take a lot of time. But in brief, I'll try to do the justice as much as possible. At the moment, HelloWorld has been the highest contributor of our business very simply put. It's a shared living, co-living business. Incidentally, Jitendra has been a co-founder of that business. He's running the business along with Ismail, and very successfully so, right? As Mr. Deora mentioned, from a INR 38 crore ARR that we had last year, we are now at INR 100 crores. The unit metric or you could say the unit of measurement here is either the number of beds of the rooms that we let out. As of today, we have around 10,000 -- 11,000 -- to stand corrected, 11,000 plus beds available in the business from a co-living point of view across around 15 cities. So we focus on a specific age bracket of consumers, which is students, mostly even including undergrad students who are away from their homes for the preparations of entrance exams to fresh professionals who come into metros, to work for -- to work in their first employment or first job, right? So we provide a hygienic and standardized accommodation for all of them.

Yes. Sir, I'm just looking for the -- how do you recognize revenue? And what is the return say ROE or which you can expect in this business for -- let's say top 2, 3 business in the next 2 years?

Okay. So for this business, it's a prepaid revenue that we have, right? So it's the rental revenue that we recognize it is a prepaid revenue. Is that the question that you are asking for?

Yes, sir, the rent paid by the students is directly shown as revenue, right?

Yes. Yes.

Okay. And what percentage of that revenue comes as the service charge for us, [ the student pays ]?

So there is a range. Obviously, there is not a 1 answer, but typically, it can vary from 20% to 30%.

20% to 30%. Okay. Fair enough. And when do you expect -- so essentially, my question was the top 2, 3 businesses, what is the ROE profile of these businesses in next 2 years, if you can help me with that?

You meant to say ROE, right?

Yes. Whichever metric ROE, ROCE, whichever you internally use. Basically I'm looking to understand what would be the ROE profile of the company. So basically, if you can help me with the top 2, 3 businesses will get a rough sense of it.

Yes, I would take that number close to 25%.

Okay. Okay, sir, and what is the current cash on our books?

Kunal?

INR 30 crores.

INR 30 crores.

INR 40 crores. And our monthly burn rate is roughly around INR 15 crores, right, cash burn rate, monthly cash burn rate, sir?

It will be around INR 3 crores.

INR 3 crores. Okay. Okay. And do we have any acquisitions -- do you intend to do an acquisition in the next 1, 2 years? Or do you think that portfolio is complete at the moment?

From a strategy point of view, we keep on meeting exciting ventures and startups that strategically fit into our ecosystem plans. At the moment, it's difficult to say yes or no to that. But yes, we keep on actively meeting exciting founders who can help us build the ecosystem. But as soon as we have an exciting prospect to add on to our portfolio, definitely, we'll come back to the market with relevant information on that.

And sir, 1 last question. When we go to the INR 100 crore quarterly run rate in Q4, will our fixed costs broadly remain the same as in Q1? Or how much you expect them to go up?

Just to understand your question correctly because there's some static in the noise. You are asking whether the fixed cost in our revenues will remain the same when we reach INR 100 crore mark. Is that the question?

Yes, sir.

Fixed cost will remain more or less the same, maybe similar like I said, this is INR 4.5 crores maybe it can go maximum to INR 5 crores. So it's not beyond that.

The next question is from the line of [ Utkarsh from Infinity Alternatives ].

Congratulations on the results. Just expanding on the last question as well. I basically wanted to understand what the unit economics look like today and what they would look like at a profitable scale, especially in your services verticals, the SaaS, RaaS?

Okay. Okay, so on SaaS point of view, we have, as I said, 2 products. One of them is already profitable, has got a double-digit profitability, not just at EBITDA level, but at PBT level. The other product is a fairly younger product in terms of its age in the market. There, we are focusing on growth and expansion at the moment. So that is still at a -- the tech costs are pretty high. We expect this business to turn EBITDA positive over the next 4 to 5 quarters, right? So that's the 2 SaaS products. In terms of RaaS, as I -- as we have mentioned, one of the business is already profitable as PBT level consistently has delivered profitability for 3 quarters, which is Aurum Analytica, right? HelloWorld, which is a co-living business, we stay very close to EBITDA profitability quarter-on-quarter with a conscious strategy of investing growth capital, keeping the profitability and the unit economics in mind. Having said that, at a unit level where a unit could be a property, each of our properties are actually profitable after 9 to 10 months of its -- of their launch, right? So that's typically the rate that we have -- and so -- which kind of goes on to say very simply that if we, today, pause or reduce or slow down on growth, we will immediately turn profitable in that business, right? So that's the major part of our RaaS business from a top line and profitability point of view.

Understood. And just a small follow-up as well on a bed level, just so I understand. For each bed, what is sort of the average revenue and average costs that you're incurring?

On what?

So I think [ Utkarsh ], I can take that question. So typically, for HelloWorld, the unit economy, if you consider it as a bed, then 60% of the bed, the cost goes to the owner, the rest 40% will remain, where the 10% will go as the variable costs like typically, which includes performance marketing and the field cost like typical people who are engaged for the field operations. So it's a hefty 30% contribution margin at unit economy, which could result if you remove the fixed cost -- if you add the fixed cost, we come to around 14% PBT kind of take.

The next question is from the line of Gunit Singh from CCIPL.

I'm sorry, I might be repeating this question because I joined a bit late. So I mean, we have seen a rapid growth over the last 1 year in terms of our top line. So I mean, what is your outlook for FY '24 in terms of top line and bottom line? And how do you see us in the next 2, 3 years? And when do you expect us to turn cash positive? That's all, I would like to understand.

So, yes, Gunit, Hiren here, the question has already been asked and answered. So since you are short in time, I'll quickly revise that. So we have announced that we are aiming for INR 100 crore quarterly revenue by Q4 of FY '24. EBITDA level, we are already positive, on profitability, we don't have a specific number that we can give. But internally, we are targeting, over next quarters, we should be PBT-positive, 6 quarters.

The next question is from the line of [ Devang Chokhani from Devang Management Private Limited ].

My question was with growth in the sector. Do we see any growth in competition, as currently, we do not see any competition the way the proptech ecosystem we are building because no other brand or company is building in proper ecosystem. There are individual companies, but do we see any major competition in what we are doing, so that the market share isn't divided?

Yes, [ Devang ], Hiren here. I mean, as you rightly pointed out, there is no like-to-like ecosystem in the proptech sector being developed by anybody of the scale or the vision that we are having. We are happy if somebody will also take up the mandate because then the network effect will help us our growth as well. But at the moment, yes, no specific like-to-like comparison. Yes, there are individual companies that we can relate to as competition where we see, not just kind of exciting interest from a market creation and market growth point of view, and that's where the rental business excites us a lot and that's what Jitu also -- Jitendra also kind of elaborated when we were speaking is the entire rental market is a big opportunity to be grabbed. So we are seeing, and I would encourage you to look at how the kind of interest that has been generated in this segment with likes of Stanza Living and Zolo and the kind of valuations they have been able to garner. So we expect the same level of interest, not just because of the growth prospects, but also given our performance with much lesser capacity, we are doing higher revenues and better occupancy compared to some of the top players in this segment, right? So -- and I took co-living as just one example. Similarly, we are highly competitive against specific businesses within the protect sector. But at the ecosystem level, we are not seeing a like-for-like competition yet.

The next question is from the line of Faisal Hawa from H.G. Hawa & Company.

Sir, is there any thought within the organization to make a unified app, which would incorporate all the services that we are giving within so many subsidiaries something like how Tata Neu has done?

So, Mr. Faisal, I think that's a very active topic also in terms of a unified app or a master app, various names you would kind of encounter for such a solution. Yes, there have been predominantly in India, except China, in most of the geographies, the super apps have not done so well. But to make them really do well when the entire ecosystem benefits to a relatively homogeneous set of users need to be created, right? So when we see that happening, we will definitely aim to build such kind of an app. But when, yes, if we focus on, let's say, B2C as a customer, there, yes, we are actually working on creating 1 single interface for all our partners or businesses that could be offered to a B2C customer. But it would not be fair to put all the products in 1 single app where you don't have a similar target audience using the same app. So we are approaching it from a very targeted go-to-market strategy point of view.

In addition to it, Mr. Hawa, what we also intend to do is that an app is an outside-in strategy where we are -- it's a pull strategy where you want to have an interactive platform for like Hiren rightly said, B2C customers. We understand that real estate is a very location-specific and an asset-specific business. And the solutions that we have are spread across various locations and also spread across various stakeholders. We presently are applying a rather inside-out strategy where data, which is 2 sets of data, one is asset data and the other is consumer data, is aggregated in the back end, and then we see how to turn that data for a better revenue unit across the entire ecosystem.

But in no part of the ecosystem, are we feeling the need to go off-line like Integrow is almost like an off-line business. So we don't see any kind of a push towards going off-line for any part of the business?

You rightly pointed out that real estate in India is -- has a large component of off-line operations, which requires a human interaction and human touch. So there are various parts of business where we have a pure tech and then there's other parts of businesses where we have tech enablement. So the off-line modes where there's human interaction required is tech enabled. For example, Integrow Asset Management is tech enabled where we are understanding consumer behavior in a particular micro market, understanding the competition from a development standpoint and then building via basis of that as to where is the best investment opportunity available in that particular micro market. So we have a path to take it to a completely tech-driven ecosystem. However, considering the limitations of the business we are in, it will not be purely tech business.

So just like demon was a big trigger for payment apps and UPI, et cetera, or pay a pickup, any kind of trigger that you feel that could be -- it could work for people to adopt proptech in a big way? Would it be like a very big move in real estate, which could lead to that or something which can really get it to an inflection point?

There's absolutely movements where we are seeing more adoption of tech, but that is not happening in a watershed moment like a demonetization. There have been stages -- and there have been phases of various tech adoption. So demonetization was definitely impacting tech adoption. COVID was another wave where tech adoption increased across all assets. Policies like RERA are also increasing tech adoption. And then we also have various initiatives like ONDC, which are going to move a lot of operations into -- on to tech adoption. So to answer your question, no watershed moment that we envisage, but there will be a stage-wise increase in tech adoption across the sector.

That was our last question. Ladies and gentlemen, I would now like to hand the conference over to Ms. Vanessa Fernandes for closing comments. Over to you, ma'am.

Thanks, Dorvin. Thank you, everyone for all -- each of you who've kind of participated today. We witnessed the highest participation over the past quarters. We truly appreciate your continued interest in Aurum PropTech, and we look forward to having you all in the next call again. Have a good evening ahead.

Thank you. On behalf of Aurum PropTech Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.