Aurum PropTech Limited (AURUM) Earnings Call Transcript & Summary

Congratulations on a large transaction. So I have this 2-part question. One thing on the Housing side of it, of course, you have said a few things in terms of you would like to see how it plays out and you would be in a better situation to talk about. But as of now, the numbers that we could see, it clearly tells you that the current operation needs a significant amount of optimization before it could get streamlined into a more profitable thought process. So if you could highlight the first top 3 priority that you have set up in this integration that you could solve for to ensure that once it gets consolidated on an annual basis, we are not going to take a hit from the current operational costs, which are significantly higher than the revenues out there.

So Rahul, thanks for your question. You're right. We do also see this from an opportunity standpoint. Our first goal is to make sure that we increase the revenue pool and address a larger TAM where this stop of monetization and intent at Housing is converted into addressing the larger revenue pool available with the transaction model across all 3 developers, brokers and also DIY. So that's one. On the revenue side, the second lever for us is to ensure that how do we increase the existing product build and upsell within the housing SKUs. We do see that there's a good tech enablement in terms of the product SKUs that housing has built, but in terms of utilization, there has been minimal utilization of those product SKUs. The idea is to increase that revenue pool as a second instance. The third is that we see opportunities between ancillary businesses, which is a combination of housing and PropTiger, a combination of Housing and Sell.do, a combination of Housing and NestAway/HelloWorld, where we are able to do consumer cohorts and again increase the revenue pool. The second part is on the cost side, where we have a classic playbook of understanding internationally invested and corporately governed -- or sorry, corporately managed, not governed, corporately managed businesses to provide for efficiencies. Typically, these become management-heavy, top-heavy. We have some case studies on this from our existing execution playbooks. Second is we do realize that at times, businesses that are built by tech teams, by tech companies do lack that understanding on the real estate practice side, which our team comes in very handy. And because we understand the real estate side of this business also, we are able to plug in the gaps of what exactly the consumer needs. And are we over-providing there in terms of cost? For example, one piece that looks -- that we are looking at is, are the sales team heavy in terms of their build on the broker side and also on the developer side and are there opportunities to streamline that. We are also looking at opportunities in our distribution business, where between Analytica and Sell.do, which has got access to 1,000 developers and also has a very solid enterprise team is able to extend their learnings and also build some efficiency in the housing business. So that's on the cost side. One key thing that we have probably identified as an industry is that there seems to be some -- there seems to be a gap in integration of intent that is structured on the platform and the revenue monetization of that. We have close to 54 million users coming on the platform as traffic. And our goal is to ensure that we do provide monetization streams across this traffic. We also find opportunities on the cost side, again, on the marketing front, where probably with tactical levers with Meta and other social media platforms, if we can do a efficient performance, marketing expenditure, brand expenditure and also SEO expenditure on these platforms. So there are opportunities that present to us on the revenue and cost side, both which is why we -- the team feels confident from the opportunities we see and the execution playbook that we have demonstrated successfully to bring this quickly under control in the next 3, 4 quarters and then lead it back on to the growth at profitable metric.

Rahul, this is Ashish here. Just to add to what Onkar said, we bought PropTiger in last July, exactly 1 year ago. And since then, we have been looking at Housing. Housing is the largest -- one of the largest consumer brands in India and definitely the biggest consumer real estate brand, right? And you have, over a few years, tracked how we have done transaction business and how we have grown that. So now our challenge is not getting 1 plus 1, 2 and making that profitable. Our challenge really is how to make 1 plus 1, 3. And that is what we are working on. And in the last month, 1.5 months or 2, the teams have really worked on the integration plan. Now the question is how quickly and how relentlessly can we execute that. And that is something that we are here for. So I mean, it's the largest brand combining with another largest transaction platform and the synergies are supposed to kind of start unlocking immediately and definitely to become profitable at the earliest.

Yes. Thanks for the color. That's very assuring. And I think the right value add as identified by Onkar also is the consumer behavior understanding that we have from the actual real estate business that we bring into. That's a value add and also on the cost efficiency side. And we have seen most other transactions in the past that you have worked around 12 months have been a good time period for them to -- on the -- at least on the cost side of it, work around. So I think similar time line is what one should be expecting out here as well.

Yes, it's 4 quarters. We are -- our internal target is 3 to 4 quarters. We are today saying 4 to 6 quarters. Housing gets larger scale, a lot more synergy opportunities, larger brand. And we -- and it's The Marketplace. So that is why we are factoring in 1 or 2 extra quarters. Our internal target is like the other companies to kind of make it profitable within 3 to 4 quarters. But yes, from -- for this call, let's take it 4 to 6 quarters.

Next question is from Dipesh Mehta from Emkay Global.

Congrats for the steady execution as well as Housing transaction. A couple of questions. First, on the -- with Housing transaction, do you expect our overall offering portfolio is largely completed now, which we might have envisaged, let's say, when we started the journey? Or do you think still some gap exists, which you would like to fill in the next couple of years? So that is question one. Just to understand overall broad vision and where we are in terms of offering perspective. Second question is about the PropTiger. Now we completed a year. What are the learnings, let's say, where we find revenue cost synergies? And how some of those learning we can implement in Housing because this is a relatively larger transaction. If you can give a broad thought process around it.

So Dipesh, to your first point, we feel that we had -- the journey from lead to transactions was already there with Aurum PropTech ecosystem. Now we go to a much larger scale where we have the entire audience coming in, which is what Housing.com fulfills from audience to leads to management to transactions and also managed living then. We feel that we have the entire ecosystem from end-to-end journey. And I think Housing is going to be a pivotal -- Housing acquisition is going to be a pivotal stage of Aurum PropTech where we're going to become one platform, one operating system for Indian real estate as a whole. It's not going to be segmental going ahead in terms of different, different products or services together and which is what we're trying to do with post Housing acquisition that how do we streamline everything into one platform, one ecosystem and one operating system for Indian real estate. Coming on to the second point which you had with respect to PropTiger. See, the PropTiger and Housing both as businesses were HR-driven operational businesses, and we see a lot of drivers over there to ensure that there's efficiency into the system. Tech is being utilized at every stage to automate operations and ensure that overall, we call this out as the key metric that we keep on tracking across all our companies, which is revenue per team member. How do we get -- how do we increase that revenue per team member across the businesses is something that we have seen during this PropTiger transaction and getting to this last individual contributor in every team size and increasing their productivity is going to be something which will ensure that our learnings from PropTiger will be embedded into housing transaction as well.

Dipesh ji, just to add one more point to what Rihen already said is that if you look at the housing offerings from a revenue standpoint, from a product standpoint, we did have that capability in place by the way of Analytica, which does a much larger pool of revenue in the enterprise side of Housing. We also service the brokers between Sell.do and Analytica and some parts at NestAway. However, what we didn't have is the intent at the earlier stage of property discovery, which only 2 Internet, I would say, Internet platforms get. One is, of course, the likes of Google, who learn it first as and when is the consumer starting to buy to -- starting his purchase or rental journey or real estate consumption journey. And second is, of course, marketplace platforms like Housing, which get this signal. And the idea was -- what made it compelling is that this signal identification in a way jettisons us from an ecosystem to a marketplace enablement transaction that operates at a much larger TAM and has a larger stickiness in terms of our offerings to all the 5 stakeholders now from the developer to the broker to the buyer to the consumer and also banker. That was what -- that is what made housing extremely compelling. And with this, of course, we feel that now everything that has to be built around can be built internally and then offered in at the Housing.

Next question is from Neel Chhabra from Resight Ventures.

So like my question is largely on like we have been talking about building the complete ecosystem in the PropTech space. And if you look at our last acquisition in terms of PropTiger and Housing.com, while they make a strategic fit and strategic sense in completing the portfolio, but they have come at a serious cost of dilution. So as a management, how do you think about per share value creation? And another metric that we have been talking about is of ecosystem revenue. So like if a customer you acquire through NestAway or now from Housing.com, what percentage would go on to transact on PropTiger or take a loan through KuberX or generate data through Analytica. So how do you think the space moving forward in the next 2, 3 years, the ecosystem revenue part and how you think about the per share value creation?

Neel, this is Ashish here. I'm taking the first question, and then I'll request my colleagues to the second one. Look, on dilution, we think through this very, very strongly because from a long-term road map of the company, the dilution is very important. As a promoter of the company, the dilution affects us -- affects me personally the most. So we think about this very, very deeply every time that we have to do something. But both times that we have done the dilution, we have diluted to the largest PropTech group in the world, which is REA, right? And that is, in turn, owned by News Corp, right? So what we have effectively done, we have today on our cap table, 24.9% shareholder, which is probably the largest PropTech group in the world and one of the biggest media groups in the world. So what it does is it just opens up a lot more opportunities to learn from these companies, learn from their global experience, and that's one big intangible when we dilute. If it was just some -- any other investor, then we would have thought twice. And that is why in the earlier avatars, earlier acquisitions, we never diluted, but we diluted to REA. This is more to the credit of REA than to our sort of thought process. So that is one part. Second, both PropTiger and Housing was very, very valuable brands, are very, very valuable companies, right? I mean marketplaces are listed at 4.5x in India. That is the valuation that we have seen in some of the marketplaces. In another marketplace, we have seen the valuation to be 10x of their revenue. So -- and what we have done now is we have acquired at 1.5x of the revenue. And the reason behind that is because there is a long-term goal that we are aligned with REA Group. That is what our belief is. And that is why even for them, it is not an exit, which is only fetching them INR 458 crores or whatever value that has come out of the equity. They have now 24.9% in the largest PropTech company in the country. So it's a bit of both, right? You're getting the right valuation, you're getting the right partner and everything comes together. And only in those special scenarios are we looking at dilution. I hope that answers your question on the dilution.

Neel, I'll take your second question, which is with respect to ecosystem customer or cross-selling customers across the entire ecosystem. This is something that we've been trying to build at Aurum PropTech since last couple of quarters. However, when we understood the journey of a consumer, we understood that it starts at the top of the funnel where the consumer showcases the first intent, may it be a consumer who is going from co-living to rental or a consumer going from rental to buying an apartment. And that top layer or funnel was missing in our entire portfolio, which now gets pitched through Housing.com. So effectively, now with Housing, the opportunities to cross-sell/upsell at a B2B end to developers as well as partners as well as from a B2C point of view, increases exponentially, and we're able to ensure that every consumer who comes and leaves a footprint on the platform has something that we can offer to them and constantly ensure that he's having his entire real estate life cycle with Aurum PropTech as an entire platform.

And Ashish, like you have exactly alluded, like marketplace is a very high-quality business model. And if you look at even REA's core operations in the Australian business, they are making like 60%, 70% operating margin. If we look at Rightmove in U.K., they are also making 70% operating margins. If you look at Hemnet in Sweden, they're also operating at 15% operating margin. So directionally, what are the steady-state operating metrics that you envisage for Aurum like, let's say, in the next 3, 5 years?

You are benchmarking with the companies that we have been benchmarking and interacting very, very closely with. We look at every single product, every single feature, every single release that they come out with, whether it is on media, on social media or on product. We believe that -- the consolidation in Indian PropTech has started with Housing and Aurum coming together. And the reason we say that is because as my colleagues were talking earlier that there was no handholding between discovery/listing to the transaction. And if you are able to integrate that well, then you will see very healthy unit economics, you will see very healthy EBITDA numbers going forward. And the moment as an industry leader, we are able to demonstrate that, it will make sense for other companies also to collaborate or come together to do that. And the that you are -- the thesis that you are talking about, Neel, is exactly our thesis as well that nothing stops Indian proptech companies to be -- to have similar profitability metrics, what you have in Australia, what you have in U.K. or what you have in Brazil, right? They are smaller markets. In India, the real estate purchase is an emotional purchase. So it's even more important to have the right journey mapped. And I think we are on path to do that.

Next question is from Amit Chandra from HDFC Securities.

Am I audible?

Yes, Amit.

Sorry, actually, I joined a bit late. So maybe if I -- if this question is a repetition, please forgive me. But in terms of the acquisition, it appears to be very exciting and new journey. Sir, in terms of Housing.com, obviously, we have a revenue of around INR 300 crores. So in terms of profitability, like what is the loss as of now? And in terms of the journey to achieve breakeven, what are the time lines that we should see in terms of achieving the breakeven? And what are the low-hanging fruits in terms of achieving that breakeven? So -- and like what are the time lines also? And also, if you see in terms of the competition that is there in the market, like the largest competitor, which is 99acres, they have been trying since many years and spending a lot, but still they have achieved the breakeven level and they have been operating at a loss for many years. So how do we see the long-term profitability happening in Housing.com?

So Amit, thanks for your question. And you're right. There has been certain baggage in the industry where losses have been -- have shown up on listing business models. And that is where we feel the opportunity lies for us in converting this, I would say, stopping at intent monetization and taking it to transaction between the listings business model and the fulfillment of the transaction business model and which is where Housing and Aurum PropTech combination becomes very compelling for all stakeholders. Having said that, we can -- if you look at the FY '25 revenue from operations at Housing.com between the listing services and various other packages, INR 343 crores was the revenue as of FY '25. They have discontinued certain services. And of course, they have exited one business to us, which is PropTiger. On the expense side, between the employee benefits, other expenses and which is -- which comprises of advertising, payment gateways and software data, the expenditure at Housing as of FY '25 was INR 531 crores. That we understand as of FY '26 and these numbers are being audited presently, they follow June -- July to June calendar, the Australian ASX calendar. These are being audited presently, and they will be very soon public for our consumption and estimation in the next few quarters. On the expense side, we -- in the earlier question, we did iterate there are opportunities we see on the marketing segment where we can look at efficiencies on expenditure, where we do better utilization of credits on various social media platforms and also search and discovery platforms like Google using efficient working capital management to ensure that expenditures are managed within their limits. And the other one is, of course, the -- very -- an internationally invested corporately managed business does have some opportunities for efficiency because it typically becomes a little top-heavy, management-heavy, whereas we at Aurum have typically believed in a lean org structure with largely frontline empowerment towards the revenue side, which is where a larger opportunity also presents to us in terms of cost optimization. We also reiterated in the previous question that we are looking at optimistically getting this under control anywhere between 4 to 6 quarters as a trade-off our -- applying our playbook on restructuring and turning around business.

Next question is from Faisal Hawa from H.G. Hawa & Company.

What is the reason that our quarter-on-quarter revenue has gone down quite a bit? And secondly, can you give some figures as to how much Housing.com would have spent on marketing, advertising and branding alone on the last 7 to 8 years because they have been rather very, very visible in various media channels. And also, can you share that what was the highest valuation that Housing.com was diluted at -- during its various rounds? And what was the lowest valuation also before we acquired them? And they have had several mercurial founders and even entrepreneurs who have led them, but no one has been really able to control this company, and they have burned money a lot. So to change the culture would be very difficult as opposed to the many smaller acquisitions that we have done so far. So what are your comments on that?

Faisal, as always, you are reading our mind on with some of your -- some of the points that you are making. So first on how much money has been invested in Housing till date in various avatars, in various forms by various investors in past, right? So in last 14 to 15 years, we believe INR 2,200 crores has been invested, out of which it is safe to assume that INR 1,000 crores got spent on the brand, right? It is the #1 real estate brand, right? So that is one reason why it is a very, very attractive marketplace. We have already talked about the traffic numbers, 50-plus million traffic numbers, 5 crore people visit every month, might not be unique, but still 5 crore engagements every month on the platform. So which is, to our mind, very, very valuable. Many founders, yes, it was started by a founder. And then for last few years, it has been stabilized by REA Group. REA Group is a very stable and very highly governed Australian publicly traded company. So they have, in a way, whatever happened in the earlier -- you used the word mercurial founders, that is all in the past and last few years, it has been in very stable hands of REA. Our endeavor is to kind of bring profitability. As you know us, we have learned this in NestAway as well, where the losses were very high. In terms of revenue to losses, the proportionate proportion was even worse in NestAway, but we turned that around. We believe that we can turn around turnaround Housing as well. Because in Housing, we have an additional lever, which is to bring synergies to our own transaction platform. And that is something that will create a larger revenue base and create a larger profitability. So that is where we are taking this.

And what is the burn rate of Housing.com per month just now?

So as of right now, the business as is, it's doing INR 200 crores of burn annualized basis. This, of course, once we close and we start our operations, the idea is to streamline the cost and bring it to a breakeven point in 4 to 6 quarters.

And we are on record saying that the promoters will also subscribe to some shares. So what -- where exactly would that capital be deployed for -- or is it like an insurance so that if the burn is not controlled, then we have enough funds?

Yes, it is like a war chest for the company because we thought that it's just good to have funds in the company and promoters subscribing at these levels just kind of created more confidence with the Board and with the REA as well to say, okay, look, there is investment in the company more than what we already have currently. So yes, you'll have INR 200-odd crores of war chest for Housing, but I don't envisage to use this.

And we will be expanding equity to the tune of 25% with all the dilutions?

20%, right? Because around 5-odd percent was already with REA Group due to the PropTiger acquisition, which we had bought at 1x, if you recall. We had issued shares worth INR 84 crores and the business that we are doing now in PropTiger makes that at almost 0.5x of the dilution. So yes, they already own 5% -- REA already owned 5% and now another 20% by virtue of swapping Housing.com.

And sir, if you could just answer whether -- why our quarter-on-quarter revenue has gone down in this particular June quarter?

Yes. Faisal, particularly, there is one category of the revenue, which get crystallized based on the slabs, percentage slabs of achievements of the target. And that got crystallized in the last quarter of FY '26. Now in this quarter, the slabs, which will -- as and when we move further to the year, the slabs will get achieved and that revenue also will get crystallized probably at the last quarter of this financial year. So there was one particular revenue which got recognized in the last quarter, which is -- which will build for the year in this year. And that is a moment which...

So Faisal, just continuing on to Shrikant's point, this is specifically for the PropTiger business where we have annual operating plans signed with the developers, which is for the financial year. Even in this financial year, we have annual operating plans signed with all the developers that PropTiger works with. And it is based on the total amount of gross transactions that we do with the developers. As and when we hit those slabs, we unlock additional brokerage slabs, which PropTiger can then charge. As we start the year, we are at the first couple of slabs initially when the value unlocking generally happens in the second part of the financial year, which is why you see that drop. It's more seasonal rather than -- and it's not a onetime impact. It's the way the cycle works in PropTiger as such.

We'll take our last question from [ Yajat Shah ] from Family Office.

All my questions were answered. Just wanted to know one last thing. So we are currently at 10% EBITDA adjusted. So with the Housing.com integration, in 4 quarters, we plan to be profitable. But can we be profitable on a company basis by the next 2 or 3 quarters?

Thank you, Yajat, for your question. Yes, we do see the potential to be profitable at a company level because our existing businesses are already profitable, may it be in the Distribution segment, which always was profitable and now the Rental segment is also breakeven at an adjusted EBITDA basis. We do see that potential over there. We'll be able to give you better guidance on this once the Housing transaction has been closed and our quarter-on-quarter road map has been defined to scale Housing and control the expenses to reach Housing as well as on a stand-alone basis. As called out by Ashish sir and Onkar earlier, while our internal target is to reach breakeven in Housing itself within 3 to 4 quarters, we see -- for this call, we're saying that we'll, for sure, do it in the 4 to 6 quarter time frame.

Ladies and gentlemen, due to paucity of time, we'll take that as the last question for today. I now hand the conference over to Ms. Pranali Desale for closing comments. Over to you.

Thank you, [ Yashashri ], and thank you, everyone, for joining us today. FY '27 Q1 marks another significant step forward in Aurum PropTech's journey. Building on the momentum of the past few quarters, we have continued to strengthen our operating performance, deliver profitable growth and execute our strategic priorities with discipline across our businesses. We sincerely appreciate your continued support, trust and engagement as we work forward towards creating long-term value for all our stakeholders. Should you have any further questions, please feel free to reach out to our Investor Relations team, and we will be happy to address them offline. Thank you once again for your time and continued support. We look forward to engaging with you again next quarter. Have a wonderful day.

Thank you, members of the management. On behalf of Aurum PropTech Limited, that concludes this conference. Thank you all for joining us. You may now exit the meeting.