Aurum PropTech Limited (AURUM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Aurum PropTech Limited Q4 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Sonia Jain. Thank you, and over to you, ma'am.

Good evening, everyone, and welcome to the earnings call for Aurum PropTech Limited for Quarter 4 and Financial Year ended 2024. It's truly a pleasure to have you all online today with us. We appreciate your continued interest and support. Joining us today is Mr. Ashish Deora, the Founder and CEO of Aurum Ventures. We also have Mr. Onkar Shetye, Executive Director, who will share insights on our PropTech ecosystem; and Mr. Kunal Karan, our Chief Financial Officer, who will talk on the financial highlights of the company. 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 filed with them and subsequent 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 statement. We shall start with our call with Mr. Ashish Deora, our performance over the last year. Over to you, sir.

Thank you, Sonia. Good evening, everyone. It's my pleasure to welcome you to this 12th earnings call of Aurum PropTech, and I wish all our participants a very successful financial year of 2024, 2025. Entering our fourth year of commitment to building an integrated PropTech ecosystem, I am delighted to share with each of you the progress we have made on this journey so far, and the positive outlook we have for the next 3 years. The ecosystem we conceived has evolved, now featuring the right product fit, a balanced blend of professional expertise and entrepreneurial energy, a suitable capital structure and Aurum's DNA of profitable growth with unit economics in mind. We strive to continue a similar growth trajectory over the next 12 quarters. During today's call, as we review our progress for the entire year, I would like to draw your attention to how the year has unfolded for Aurum PropTech. I will take this opportunity to highlight 5 of our achievements from the previous year. First point, on the rental vertical, I would like to once again share that we have become the largest rental management platform in India. Our aim now is to double our capacities in terms of beds to cross 50,000 rental units. Second, in the capital vertical, we acquired and fractionalized a single asset worth INR 70 crores in Pune, paving the way to apply for becoming one of the first MSME REIT in India. We are excited and encouraged by this path breaking regulation by SEBI. SEBI chairperson recently stated and I quote, "investors should have a positive view of assets such as REITs, infrastructure investment trusts and municipal bonds, realizing their role for the nation's development." As Aurum, we aims to become one of the largest MSME REIT in India, along with our AIF, Integrow Asset Management, we are confident that our capital vertical within the PropTech ecosystem is positioned for exponential growth. Thirdly, in our distribution vertical, we have successfully on-boarded top developers last year across India, including Embassy, Tata, Tribeca, JB Infra and M3M. Our prestigious clientele now includes Birla Estates, Adani Realty, Chandak, Shriram Properties, Raymond, Sunteck, Rustomjee, Puraniks and many more. Fourth point, what also brings us satisfaction is that we work with each businesses and our teams across companies and define specific metrics such as lead sold, live beds, developer relationship, revenue per team member, value of apartments invoice, et cetera. This approach has enabled us to maintain a laser sharp focus on the right indicators for our diverse products across the real estate value chain. Last but not the least, as we have consistently believed and articulated, our focus remains on profitable growth and unit economics. As a result, we have been able to significantly increase our revenue and most importantly, improve our margin -- EBITDA margin considerably. Moving forward from the previous year to the current one, we will further sharpen our focus on harnessing data to enhance the value that Aurum PropTech brings to the various stakeholders, such as home buyers, developers, tenants, investors, and channel partners. Our focus remains on deepening our integrated ecosystem, maintaining sustained improvement on unit economics, and driving profitable growth across our 3 clusters. I will now like to hand over to Onkar to take this call further. Thank you very much.

Thank you, Mr. Deora. We continue to display robust growth across our distribution, rental, and capital domain. In India, it has estimated that more than 500 million individuals that is approximately 35% of the population lives in urban areas. Also, it is estimated that 28% of urban households stay in rental housing with this number being higher in megacities. Our technology suite in the rental cluster offers a complete set of solutions for renters, property owners and property managers. This year, our co-living business registered an 87% year-on-year growth. Additionally, we successfully acquired and turned around India's largest rental marketplace, NestAway. NestAway is now a leaner, efficient organization with better customer experience on its new platform. As we progress, our rental solutions will offer unparallel choice, enhanced security, and convenience for users, value for many cases, or having the experience of discovery, renting, moving in an elevated community leading experience for those seeking rental accommodation. As the real estate sector continues its march to USD 1 trillion size, structural demand for capital will increase and continue to increase. Since their introduction around 7, 8 years back, REITs and InvITs has gained traction in India market, with 23 registered InvITs and 5 REITs, collectively managing assets worth over INR 30,000 crores. In 2023, REITS and InvITs witnessed a significant surge in fund raising, collectively raised INR 11,450 crores. This year, SEBI's introduction of micro and small finance REIT is being built as a game-changing move that will transform India's real estate financing landscape. MSM REIT can be set up as a trust with an asset size of INR 50 crores, as against INR 50 crores in REIT. Investors can invest in units of SMB with minimum subscription of 10 lakhs. Regulatory guidelines that require listings of units on designated stock exchanges and requirements to make investments only in revenue generating assets will ensure guardrails for investor protection and transparency. Our capital solutions are best placed to tap this unlocked sector and use their tech platforms to create scalable solutions for property owners and investors alike. Aurum WiseX has launched a INR 70 crore revenue generating Grade A commercial real estate property on its platform last quarter. As we move forward, Aurum will pave the way to make real estate investments more accessible to a wider set of investors and foster a value creation within the regulatory framework. In the past 5 years, India registered more than 13 lakh home sales in primary market at a CAGR of 20%. With an intensely cooperative market, tech-enabled institutionalization of discovery, sales and servicing of real estate has taken prominence like never before. This financial year, our distribution solutions, which includes analytics, CRM, and broker aggregation, were able to demonstrate a robust growth. Our analytics business displayed a 247% year-on-year revenue growth. And in the broker aggregation business, we witnessed a 19% year-on-year growth in the units booked. Our CRM product sell.do was ranked #1 as the easiest to use CRM across the globe by G2. I will now hand over to Mr. Kunal Karan to take us through the financials.

Thank you, Onkar. Thank you, everyone, for taking out time to join us on this call today. Yesterday, the Board of Directors approved the audited results for the year ended 31st March 2024. I will take you through the summary results of the company. To start with the quarter numbers. Revenue from the operations for the quarter was INR 59.81 crores as compared to INR 57.31 crores in the previous quarter, up by 4.36%. The total income for the quarter was INR 65.73 crores as compared to INR 62.09 crores in the previous quarter, up by 5.86%. Revenue from operations for the year ended 31st March 2024 was INR 214.05 crores as compared to INR 126 crores in the previous year, up by 69%. The income for the year was INR 233 crores as compared to INR 139 crores in the previous year, up by 68%. Total loss for the year was INR 65 crores as compared to INR 40 crores in the prior year. EBITDA for the year was INR 22 crores as compared to a loss of INR 3 crores in the previous year. Now the balance sheet. Total assets of the company as on 31st March 2024, INR 644 crores as compared to INR 392 crores at the end of March '23. Liabilities were INR 456.47 crores as compared to INR 157 crores at the end of March '23. Equity attributable to the equity shareholders, INR 180.38 crores at the end of March 31, 2024. The cash flow that was generated from operating and financing activities was INR 20 crores and INR 122 crores, respectively. Cash used in the -- cash used from the investing activity was INR 166 crores. A net decrease of cash and cash equivalents for the year was INR 23 crores. Now with this, I will pass on the call to Riya to open the floor for the question-and-answers session. Over to you.

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

Congratulations on having the legend numbers for this quarter. Sir, 2 questions. How far are we from -- actually now taking mandates for entire real estate projects, where we are almost the sole sellers or we kind of have guarantee to sell most new properties. That's one. And secondly, can you give some color on how our student living and co-living projects are going? And are we booking a lot of properties beforehand and then renting out, and that's where our major margins come from? And third is, sir, what is the kind of changes we are making at NestAway further to now get into good profitability. And are we holding 100% stake in NestAway, or there's a provision to make it 100% going forward? And if you can give, sir, can you give some guidance for '24, '25 revenue figures for the entire Aurum PropTech universe?

Thank you, Mr. Hawa, for your question. I will split this into 2 parts. The first part, which is on the distribution side, with respect to sole selling and the revenue guidance, I will take. And the balance on the rental cluster will be taken by Mr. Hiren Ladva, my colleague. In the distribution piece, we have 3 key offerings, lead generation by the way of data analytics, customer engagement with AI-based CRM and third being the broker aggregation piece. We have done a successful GTM of the broker aggregation piece, where the objective is to get velocity for real estate developers by the way of them launching their projects on the platform. We commenced with the mandate model, where we took a mandate to sell the inventory with our aggregated piece of brokers on the platform. However, we are slowly evolving that model to a more tech-enabled AOP model, wherein we get contracts across multiple cities with real estate developers. And on an annual operating model, we sell inventory for these developers through our broker aggregation platform. This is primarily done to ensure that we are able to scale our offering across multiple geographies and location, something that is a little challenging in the mandate or the exclusive mandate model, where there is also demand for strategy and more people enablement on sites and projects. On the analytics piece, we are now being seen as more of technology partners when it comes to real estate project launches, where our analytics platform provides insights on what kind of configuration, project mix, supply mix is to be offered to consumers before project launches. Post that, consumer profiling and GTM strategies are then enabled with analytics reports that are sent in by the analytics platform. The third piece, which is CRM continues to operate in the same scalable model of enterprise SaaS across multiple geographies in the country. On the second question with respect to revenue growth, this is the third year of our operation. This year, we have established a 68% revenue growth year-on-year. We'll continue to demonstrate a robust revenue growth in the next coming few years. We are looking at a range of 45% to 50% of revenue growth in this year and subsequent years going forward. I will now hand over to Mr. Hiren Ladva to take the rental industry -- or rental cluster.

Thank you, Onkar, and thank you, Mr. Hawa, for your continued interest in the company and your wishes, as always. There are two questions from your set of questions, which I will address. One is you had asked about how are we adding supply for student and co-living. So here, our supply acquisition strategy more or less remains the same in the sense that we go for the entire building, which are generally build-to-suit. Last year, when in the first half of the financial year, we were on a supply acquisition spree and we were able to get ready to move in properties. And this year, in this financial year, we will have a mix of both, where slightly higher tilt is towards build-to-suit. I'll take a moment to -- I'll take this opportunity to share with you that we have close to 5,000 beds of student and shared living. Supply has already signed up, which will be delivered to us over the next few quarters, right? So that sets us for a good financial year '25 already before we even start. To add more color to it in terms of cities focus, we will continue to go deeper into cities like Bangalore, Kota, Hyderabad, Pune which are typically the catchment areas for, not just students but also white-collar staff with less than 3 or 4 years work experience, right? So that's going to be our key focus. Moving on to NestAway. I think you had asked about our stake. So we are nearly 100% there. And we intend to not pursue any opportunities at the moment, but we are open to discussions at the corporate level at every point of time. Specifically for NestAway, our business focus right now, right from last year when we had on-boarded NestAway was in, first, turning around the business, which we have successfully demonstrated doing that for Q3 as well as Q4. In this financial year, we are -- since we have tested the breakeven, we have tested the unit economics, we will now go for expansion with a focus on the top 6 cities. So that's what we have planned. As far as FY '25 guidance is concerned, we definitely cannot give specific numbers. But having said that, 3 years -- on a 3-year road map, we intend to deliver more than 50% year-on-year growth on an annual basis or on a CAGR basis at the minimum that we intend. However, as I said, every year, we'll review the plans more -- minutely more in detail, and we'll be demonstrating the numbers as we perform for the year.

Sir, if we really execute well on a 3-year CAGR of 50%. What will be your EBITDA level at that time? Will it be around 30%?

So broadly, if you look at this financial year, we have roughly 1,150 basis points improvement in our profitability margins. Across the next 3 years, we intend to have anywhere between 700 to 1,000 basis points improvement in margin that we will attempt to achieve across -- on a every year basis.

Okay. And sir, after the promoter -- the rights issue as our balance is put up, what will be then our equity?

Our equity remains the same at 51%. If that was your question.

The part of the equity is not just paid up now the rights issue?

So you are asking equity of...

When announced and concluded, they are basically in two tranches, right? One is for the rights and the second is the call money. If you can elaborate the question a little bit more, we'll be able to answer it...

What I meant is once the balance of right issue is put in, what will be your final equity of Aurum PropTech.

So the call money, we have already received. So we have already received 90% of the call money. So total was [ 1 28 ]. So out of which, we have received [ 1 22 ]. And there are some share owners who are following up [indiscernible], if they can put it, so we are working on that.

Next question is from the line of [ Bhavik Mehta ], an individual investor.

So since the presentation does not have much details about the quarter 4 in particular, I wanted to understand that versus our initial growth targets for Q4 or in terms of our ARR growth. So have we let go up that growth to get into a profitability mode given the EBITDA of INR 20 crores in this quarter? And as a follow-up to that, is this a normalized rate of EBITDA going forward?

So we'll ask your question again in two parts. One is post-acquisition of NestAway that goes in Q2 FY '24. We took a conscious call on making sure that unit economics are in control. However, having said that, if you look at the rental cluster, we have continued to grow at a total pace of 88% Y-o-Y. In Q3 to Q4, we have also established a robust growth in the distribution business, and that comes by way of our analytics and broker aggregation piece. In both we've been able to demonstrate a 30% growth. Combined at distribution cluster, we have been able to establish a 30% Q-o-Q growth. Going forward, we will have to also accelerate growth. However, we will not go completely offhand with our EBITDA margins. Like Hiren has stated earlier on the call, this year, Y-o-Y, we have increased or we have bettered our EBITDA by 1,150 basis points. In the next 3 years, we'll continue to increase our EBITDA margin in the range of 750 to 800 basis points.

So given this INR 20 crore number, it actually is 30% for this quarter. So is this primarily due to some employee benefit reduction or into less ESOPs? Or how exactly do we read this? So given if you are aiming for a 50% CAGR, does that mean that we can see EBITDA levels of INR 100 crores plus in the coming year?

So it's -- not as straightforward with respect to attributing that to one single criteria of increasing efficiency in the -- against employees on payroll, right? Yes, we have demonstrated a better performance when it comes to revenue per employee year-on-year. This year, our revenue per employee stand at INR 29 lakhs per employee. Whereas, the earlier year, we were at a INR 25 lakhs per year. But there are other factors such as supply acquisition, product development that require capital infusion and investment. That also come in -- come into play when it comes to our EBITDA margin.

Sure. And the second question that I had was that most product or SaaS companies have, say, gross margins to the extent of 80%, 90%. But given we showcased 0 cost of goods sold, does that mean our gross margins are around close to 100%?

For the SaaS products, yes, it would be in that range, 90% to 95%.

Okay. And obviously, rental cannot be counted in that. But the real estate as a service and SaaS product, the margins would be in that category, right?

Yes. For the SaaS products, yes, it's 90% to 95%.

Sure. And on the balance sheet, I had 2 questions. The first one was that given the current cash infusion, what would be your net debt level post this 100% receipt of the call money?

Definitely by the end of the next financial year, we'll try to bring it down to 0. So that by that time again, maybe is on our decision from the Board, we can go for the balance call. But definitely, the debt will get totally reduced.

Sure. And the profit that you...

Just to add what Kunal said -- sorry Bhavik, this is Ashish. We can bring the debt down to 0 very quickly. And -- but having said that, this is a lease rental discounting that is against the hard assets. As you know, typically, a tech company would not have these assets. But these assets were there right from the Majesco time. And what we have done is, with our capabilities, we have able to lease all these assets now. And that debt is practically the lease rental discounting, which is not only at a very attractive rate, but is also self-liquidated. So in a way, we have -- we deferred the rights call by taking this LRD. And we can always prepone the rights and make this 0 or continue this. As it's a self-liquidating debt, we are not too concerned about these patterns.

Sure. So going forward, I think it was mentioned in the previous call that you might look at divesting these properties for growth as and when the need arises. So that still holds true, right?

Yes, that still holds true.

That holds true. We considered that earlier in the year as well. Since we were able to lease out these properties and it gives a good equity income to the company. We thought that we can carry that on for some more time. And now some of these leases will come before an escalation in next year or two. And then the value of the asset is going up substantially because of these escalations. Since we already have the results from the call -- from the second call that we can do over time, we don't feel the rush to sell these assets at the earliest. Having said that, the idea is to sell at some point of time because this is not our core business.

Sure. And my last question is related to the balance sheet is, the property, plant, and equipment were INR 100 crores plus. So is this attributable to any specific business? And would this grow in line with the revenue growth? Or this is more or less what we would have in the near future in terms of property, plant, and equipment?

So this property -- the growth in this PPE for this year is mainly to that asset that Ashish mentioned at the beginning of the call that we have taken it in Pune for the fractional ownership. So otherwise, the balance sheet will remain light in that sense. And when this fraction thing happens in the next financial year, this will go down.

So isn't it more about current asset, than to -- so I'm just trying to understand the nature of this fractional transaction?

We cannot classify it as a current asset as on day or as on 31st March because that time it was -- we are totally holding that and we couldn't demonstrate on that day that it is a property that is up for sale or like that. Because, unfortunately, that time the regulations were not in that -- in place as it is today. So in that sense, we have to keep it -- and we wanted to keep it actually outside the balance sheet, but unfortunately, we couldn't do it. But that is what will happen maybe in the next quarter or when you will see the numbers again in the balance sheet on 31st September and that time basis will go up.

So eventually, this entire cash will come back to the company and we would earn revenue over annual maintenance and other related charges, right?

Yes, absolutely.

Next question is from the line of [ Utkarsh Somaiya ], an individual investor.

I wanted to ask, was there any one-offs in this quarter?

Will you please come back on your question.

Am I audible?

Yes, you are now.

Yes. Were there any one-offs in the current quarter? Any one-off line item in the P&L in the fourth quarter? Was there any?

So there was no one-offs in -- as a practice in the present quarter. But we have continued our product development efforts like we have done last time -- last year. So potentially product development for us is across multiple stages. It starts typically with the research activities, which goes into a POC. And once we have demonstrated a quick POC for that feature, we take that into development, staging, and then production. Typically, these were developed -- because research comes in upfront, we do not attribute that in the product capitalization. Whenever it comes on through feature development and staging, we take it up.

So Utkarsh, I think there is a little bit more of capitalization in this quarter if you want to connect that with the one-off...

Okay. So as compared to the previous quarter...

I think, that is why we are trying to kind of, in our own minds, connected with last financial year to this financial year because then it's comparable. And the 1,150 basis points of the improvement of EBITDA margin is -- in that there are no one-offs. And that is what we are trying to focus on.

So what I'm trying to understand is, earlier, these expenses were expensed in the P&L and now they are capitalized on the balance sheet. Is that what you mean?

No, not exactly like that. So what has happened in the current quarter is that a part of the product development team that has been gone into development has been capitalized. And for the rest of the year, mostly it has gone to the P&L when it was at the research stage. So when -- so what has happened mostly for the past 6 months, it was totally R&D. Only maybe for the third quarter, we could demonstrate that we are into development stage. So that is why it has started from the third quarter, that capitalization.

So can we expect this to continue going forward?

Look, as we have proposed to the Board yesterday, around INR 30 crores of expenditure, we want to do in the -- for the development of the products that we are having on hand. And -- so that is what has been approved.

But the idea will be to kind of constantly be with the same practice rather than changing it. As we get mature with our own products and offerings, our idea is to kind of standardize this.

Okay, understood. And just one more last question. I'm actually new to your company. So if you don't mind, can you please spend a few minutes explaining your business model? Just to simplify it for us, it would be very helpful.

Sure, Utkarsh, this is Hiren here. So our journey starts around 2, 2.5 years back, where -- looking at the lack of tech penetration in the real estate sector, we began on a journey where we dreamt of digitalization of the entire property landscape in India. And through that, we believe firmly in an ecosystem model of developing a PropTech enterprise, right? So -- and since we have to focus on -- we wanted to focus on tech, we wanted to focus on disruptive ideas that could transform the property sector. We started with one -- on one hand, building a certain set of products which were in-house and a certain set of businesses that we've invested in. And so our first investment was into a real estate CRM, which is sell.do. And it was owned by a company called K2V2 . We have 51% stake there. That was the first acquisition in May '21. And post that acquisition, they have developed another product, which is called BeyondWalls, which enables distribution of residential real estate. It focuses on Pune as a geography and has expanded over to Mumbai and Bangalore as well. And so these two products focus on the distribution side of the real estate. We added one more product in the distribution side which -- or a one more business in the distribution side, which is a completely data science-enabled business called Aurum Analytica, which use AI/ML algorithms to deliver highly curated set of prospective buyers in the form of leads to marquee developers across the country, some of the names, which Mr. Deora has already called out during his initial address. So if you look at the distribution side of the property sector, we have these 3 core businesses. The other...

Sorry to interrupt you. So when you say distribution, you mean you kind of tie up, you bring together the builder and the buyer, and that's what you mean by distribution?

In the property sector, we refer to distribution as the process wherein the developer is trying to offload their inventory into the market. This could happen through direct sales. It could happen through channel partners. It could happen through digital channels and the digital transaction models. So it could happen in not just any of this three but could be other ways also. So this is the area that we are talking about.

And you would charge a certain commission in between?

Depending on the business model and what we deliver to the developer. As I said, there are 3 services that we have. One is the CRM, which is a completely SaaS product. It is charged on a prepaid basis, on license basis, license/subscription basis. The second model, which is BeyondWalls, it's a digital platform wherein we have both a limited license fees, but predominantly we have a success-based commission model. The third model, which is the lead generation services, which is the AI/ML-based services. There it is on a per -- it is a packet of leads that we sell. So it's based on those packages. Again, in a form it's -- in a way, it's in the license based sale that we do.

Right. Okay.

So this is the distribution side. The other larger business that we started focusing on after we started the journey was the rental space, where we believe there's a tremendous growth opportunity available in the Indian market, which is the formalization and standardization of shared accommodation as well as family living. So we started with the shared accommodation in the form of HelloWorld. We are -- from a capacity point of view, we are probably the third or fourth largest. But from a revenue point of view, we are the second largest shared accommodation player. Together with NestAway, which adds the family living business into it, we are the largest rental -- residential rental company in the country right now. So together, we have close to 27,000 units of rental beds -- or rental units available in the country right now. So that -- again, there are two models here. One is purely rental in the shared living, as I said. And secondly, is the family rental side. So these are two main business that we have. And the third set of businesses in the FinTech/ -- FinTech cross PropTech or the capital space that we call it. So there, we have, one, the fractional ownership as a business, which is in the name of Aurum WiseX. And the second business is Integrow Asset Management Company, which has AIF license of both in the residential and commercial space separately. So they already have 3 projects in the first AIF, which is the residential -- which is in the residential space. And the second AIF in the commercial space was launched last year in the previous quarter, and will get actioned out in this financial year. So that's the third set of business that we have. So broadly, what we have done is, we have looked at the PropTech landscape in India, cut it into several segments, made our choices to start with in these 3 spaces, which is rental, distribution and capital. And then we aim to build our leadership into these 3 segments to start with, and then we'll -- and our aim to your question, our business model, our eyesight is completely focused on 2030 from a long-term vision point of view, where we believe that PropTech in itself will be a $100 billion opportunity. And we aim to establish a leadership across a select set of verticals within the PropTech sector.

Right. And just one last question on which other players are kind of present in this sector? And how is the competitive intensity?

So if you look at an ecosystem model point of view, there is hardly anybody you will find with an ecosystem model in the PropTech. From an individual PropTech company's point of view and when you start to look at the subsegments. For example, if you look at distribution, then you can further segment it also. There are listing Internet-based companies like 99acres, Makaan.com, et cetera. There are very few with the data science type of capabilities that Aurum Analytica has. So practically, there's hardly competition to Aurum Analytica per se. CRM point of view, there are many industry-agnostic CRMs available in the market, which also compete with our sell.do CRM. But there are very few real estate focused CRMs. By the way, sell.do is the market leader in the real estate CRM space in the country as of today, with more than 500 developers, as our clientele at this point in time. And similarly, if you look at rental, so it's a fairly well -- the co-living spaces are fairly well tracked sectors in the media. So you would have heard of our competition there in the form of Stanza, Zolo, et cetera. And NestAway, per se, doesn't have a very direct competition to it in the family rental space as of now. So it is practically uncontested player there. In terms of fractional, I mean, there are roughly 10-odd startups, which are there in the space as of now. From an asset under management point of view, I can confidently say we are in the top 5. And the real estate specific AIF or asset management companies with a PropTech focus or with a tech focus are again very limited. So I would say Integrow stands more or less alone in this space. There are traditional asset management companies, which are asset heavy. So that's a different class. We wouldn't compete with them. But from a PropTech kind of an AMC point of view, Integrow is also fairly alone.

Next question is from the line of Tushar Vasuja from Yogya Capital.

I would like to ask regarding the structure of our company. Right now, it's heavily subsidiarized. So do we have any plan to change it? Or will it stay like this?

We missed some segment of your question. Could you please repeat the question, please?

Yes, no problem. Right now, our company is heavily subsidiarized. So do we have any plans to change it? Or will it stay like this?

You mean the company has multiple subsidiaries. Are we getting that correct?

Yes.

So idea is to keep it the same for now because it helps us to bring focus in each business, in each subsidiary. Also, every business has its own AOP. Every business has its own ESOP that are issued to team members in that company. So they are directly impacted and directly aligned with the benefits of the growth of that particular business. We can always merge some of these companies amongst themselves or within Aurum because we own substantial equity, including 100% in the company. But I think from a focus point of view, it just makes sense to keep this structure for some more time.

Okay, sir. Understood. And my next question is regarding your profitability. So I know it's a bit of a question, but like what are your thoughts on it? Like when do you think you would be able to turn profitable?

As of today, we are sort of feeling confident considering that we have been able to improve the EBITDA margin considerably over last year, right? But still, we believe that it's a long way to go. And in the -- as you kind of get closer to profitability, every single percentage, every 100 bps becomes more and more difficult. But we have put our own internal target to improve the EBITDA margin ever year by -- as Hiren and Onkar said earlier, by 4%, by 400 bps. And I think that if we don't have to compromise on growth because we also want to remain on a hyper growth. If we don't want to compromise on growth, we stay on a high growth stage and constantly improve our EBITDA margin, I think we would be doing a great justice to our businesses.

Next question is from the line of Yatee Agarwal from SuperProcure.

So my first question is, how large do you think is the opportunity for institutionalization of rental real estate in India? So what do you think, how great is the opportunity for that?

Thanks, Yatee, for that question. We are a little short in time, but I'll try to elaborate. And I would encourage you to refer to the transcript of the previous call where we have already elaborated on the opportunities. Having said that, there is roughly around 2 crores of rental units demand in the country as of now. And this is across all different types of rental, which is highly unorganized. There have been attempts to, at least from a listing point of view, to list the available units and match it with the demand, et cetera. What we are trying to do is to formalize a lot of early-stage rental space, which has been a laggard in terms of its quality of residences, the kind of living needs that the younger generation has, so which is not just the student living, but also right-out-of-campus and people move out of their small towns and into larger cities. And then they need good, standardized community-based living in the current theme of things, the way -- the kind of lifestyle they have, how close knit they are, both digitally with their peers which is not just their colleagues, but also their fellow batchmates. So that kind of community living is something which is transforming the rental space. So to give them that comfortable, standardized and a very tech-enabled living, is one large opportunity that we are seeing in the rental space. That's an opportunity we're head on targeting, but at the same time, there are 2, 3 other opportunities also, which we are keeping a close eye on, which is on the other end of the age profile, which is on, let's say, the senior living. And before we actually go to the senior living through our NestAway offering, we are also addressing the family living. So there, if you look at how the entire rental or a tenant-landlord transition happens, both the parties go through a lot of pain in kind of one, right from discovering with -- discovering each other to transacting with each other, get the agreements in place, et cetera. And bulk of the pain, which a lot of other start-ups have addressed, is only on this part. There is further pain, which is there during the -- after the transition has happened. So when the tenant is living inside their property and the landlord wants to not just receive the rents on time, but also wants to ensure that their property is well cared. Tenant also needs various support services, et cetera, during the life cycle. And that's where platforms like NestAway which standardize this accommodation, minimize this interaction, minimize this pain. So that's what we are addressing right now. So just to go back to the overall opportunity, if the demand today is roughly 2 crore houses in terms of rental, the formulized or the organized capacity is somewhere around 2 lakh units only. And we are able to do even 10% of the Pan-India demand, I think that itself is a multifold opportunity, which could deliver exponential growth rates for us.

Got it. And my other question is, so do you see further adoption in analytics and CRM business in India real estate?

So this -- let me take it up in 2 parts. One is the analytics and the second, I'll come to the CRM. Analytics is definitely getting new avatars with AI and ML technology coming in. So the capabilities of what data can do for you is just exponentially growing. Now for the last decade or so, more so with proptech, where a tech infusion or tech penetration had lagged various different industries. The data has just started coming into play. So there's much more actionable data available, much better insights available. And we have the talent, which is building various businesses, various tools, various products, which are AI/ML based, which will help address some of the pain points prevalent in what I call as the distribution model. And what are those pain points? The biggest point you would ask anybody in the property sector is the trust factor. This is where data-based matchmaking, data enabled, transaction enabling platforms, et cetera, those are various products and businesses, which will help address this particular aspect of -- or this particular pain point of the property sector. And then the other pain point in the sector is the long transition time that both the developer and the buyer has to go through. With data-based, analytics-based models in place, one is able to do a much better matchmaking between the buyer and the seller, which is what our business Aurum Analytica is actually doing and It's actually commanding a 30%, 40% premium compared to a non-AI-based service that is prevalent in the same space. So I mean, the scope of analytics in this space is just left to anybody's imagination. So in fact, we are ourselves -- not just with Analytica, but we are also internally working on data as a strategy for our -- not just for one business, but across the entire ecosystem, how we are able to deploy this to improve not just the growth, but also customer experience across the all different businesses. Second point on CRM. It is a highly -- yes, I would say, it's a highly competitive market. There are many industry-agnostic CRMs in place. But real estate sector in itself is a very peculiar case, as I said, the transaction -- typical length of a transition is around 6 months after the buyer has visited the product, which is in this case, the site. And there is a lead time after that. Now to manage that entire process, you need specific CRMs with the developers as well as channel partners, are able to utilize to kind of improve the customer experience, improve their own lead closure and win rates to better understand what are the clients' needs, et cetera. So specific -- real estate specific CRMs will stand a good chance to grow in this market given that yes, the data penetration, tech penetration in the property sector is increasing. Having said that, yes, in generic, CRMs are also entering into this space. But yes, there is an entry barrier to them because they need to develop the property-specific features.

Next question is from the line of [ Sanika from Sapphire Capital ].

Can you hear me?

Your voice is a little feeble, if you could speak a little louder.

Am I audible now?

Yes. This is better.

Yes. So we have guided for 45% to 50% kind of a growth, right, on a consol basis?

Yes.

So what are the drivers for that? Like how we are going to get this growth?

So I think the guidance of 45% to 50% of revenue growth is essentially going to come from one large sector that we have seen attraction in, which is the rental marketplace. A combination of family rentals and co-living continues to drive substantial amount of growth at Aurum PropTech's ecosystem.

Okay. And one more question on the EBITDA side. So you've said that every year, we are looking for a 400-basis-point increase in EBITDA on a consol basis. So how are we looking at that?

So see, very conventional answer is, there is a fixed cost, which is in the form of -- and very little that in the form of leadership team. But the product and engineering team, which have developed some of the products, we've talked about their capitalization. But beyond the capitalization part, as these products are getting ready, they are getting deployed. We are now going to be able to address or rather grow this business in a wider net, which will reduce the fixed cost, right? So that's one part. Unit economics at various businesses. We have specifically at NestAway, which is a very visible example. But beyond NestAway, across all other products, which is all services, including the SaaS products, we have undertaken over the last couple of quarters a lot of optimization initiatives, which is on rationalization of not just the team structures, but also on what kind of tech platforms we are working on, what kind of tech products we have deployed. To give you an example, NestAway in itself, through its tech reorganization, has been able to deliver a savings of roughly INR 14 lakhs a month. This is just by looking at what are the alternate product tools available. There are certain products, since we have an in-house product team, they keep on building more features, which are part of the same product. So for example, we have a mini-CRM of our own developed by HelloWorld in itself. That kind of negates the entire cost of an outsourced CRM in itself. And this is a very rental-specific CRM that we need, which is typically not available in the market. So these are some of the levers to which both on tech side, on people side, we have been able to and we would continue to improve on the profitability margins.

Okay, okay. And just one last question. What kind of risks are we looking at which can hamper our growth?

Yes. I think macro risks are continuing to remain in the sector. We are also, I would say, cautious about certain policy changes that come in, in the rental space within the distribution space. The way we have tried to mitigate it, is that we have been able to quickly adopt to these policy changes and get them institutionalizing our business processes. In the -- at the business level, risks that are typically, I would say, taking strong your dependency on people, dependency on relationships that we see primarily in the distribution side of the business. And that is where we are fundamentally making some changes in the business model, where, for example, we are moving the mandate model to a more AOP-driven model, so that we are doing more of a tech play and lesser of a relationship management play when it comes to contracts with businesses.

Next question is from the line of Reuben Mathew from Equity Intelligence India Pvt. Ltd. As there is no response, we'll move ahead to the next question. As there are no further questions, I would now like to hand the conference over to Ms. Sonia Jain for closing comments.

Thank you, Riya. We thank all the participants who have joined us today, and you have kept on continuously trusting us. We thank you for your continued interest, and we look forward to seeing you again in the next call. Thank you very much.

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